Wednesday, March 05, 2014

Landlords – the stakes have been raised.

This week the highly anticipated new Residential Tenancies Act came into play. From March 1 all residential investors, whether self managed or using an agent, are operating under a new legislative framework, and the stakes for non-compliance with these laws are much higher than before.

The new Act has more rigid guidelines and timeframes in place for landlords and is stricter on penalties and expiation fees when the Act is not followed. Going forward, both the landlord and managing agent have increased responsibilities under these new reforms.

Key Changes: Some key changes relate to appliance instructions, changes to rent review guidelines, a fixed window to invoice tenants for water, greater ability to receive landlord compensation, changes to notice periods for entry and disclosure requirements when selling a tenanted property.

Long time coming: Toop&Toop have been preparing for the changes since late last year. Our Property Management team were trained by REISA's Compliance Officer in November last year and last Thursday we held a compulsory session for our team to ensure the reforms are front of mind. We have also adopted significant system and operational changes to stay ahead of the game for our landlords. 

So many are asking the question; With all the changes, should I still invest?

The short answer is; The business of being a landlord is simply becoming more professional. The winners will be those who embrace a more business like approach to property investing.

Looking at the pure investment side with no emotion, the latest RP Data statistics show home values in Australia have increased over 11 of the past 12 months (on a rolling quarterly basis) so property in Australia is performing well. We have all heard about the record sales set in Sydney and Melbourne recently but we would argue that there are even better investment opportunities right here in our own state.

Adelaide is still one of the most affordable, least volatile capital cities in Australia. With home values recording a modest 2.5% growth since January last year, we don't experience the highs and lows like Sydney and Melbourne. Looking at the current real estate cycle, Adelaide's home values are down 2.3% since our previous peak that shows positive signs to investors, as there is room for growth. 

We believe that Adelaide is just entering the upward trend in the cycle. Investors can achieve long term, sustainable growth and there are some great investment opportunities in the market right now.

If you are looking to invest, or have existing properties, now more than ever, professionalism is paramount. With over $1 billion in rental properties under our care, we are serious about investing in Adelaide property. Give us a call if you would like a chat about this new legislation or any of your property issues. 

Being informed is being aware and now is a great time to be reviewing your investment strategies. 

Suzannah Toop

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