Thursday, May 28, 2015

'Top Suburbs': Investors, you need to dig a little deeper.

Australia's 296 hottest rental suburb results are in! The Australian Property Investor magazine has collected significant amounts of data from across Australia to provide their lead story to investors this month.

At a glance, the data shows that across Australia five suburbs achieved yields over 7%, 46 suburbs' median value were under $250,000 and 63 suburbs achieved yields over 6%. There was a lot of informative data for investors to absorb, and it was a great read for those who love their numbers!

Upon digesting all of this information for our landlords, what became very clear to me was how important it is to dig a little deeper and understand the metrics being used in any of the 'Top Suburb' articles you read.

Let me explain.

In South Australia the top suburbs were Mount Gambier, Paralowie, Murray Bridge, Craigmore and Blakeview. These areas all came in with an expected yield between 5.58% and 5.91% per annum.

Looking at the results, it is top heavy with regional South Australian suburbs and it was not at all what I expected to see.


The leader board in this article was solely based on rental yields across the country. A rental yield is a benchmark used in our industry to provide a measure of the annual rental income you expect to receive verses the purchase price.

What the data did not show was the measure of expected capital growth. So suburbs such as Thebarton, West Hindmarsh or Nailsworth, which we see as real growth areas in the coming years, did not get a mention. 

As a rule of thumb, the risk profile increases as you move further out from the CBD or coastal waterfront areas. So the danger here for investors is knowing the metrics being used in these Top Suburb articles, otherwise you could be embarking on completely the wrong path.

So here's my two cents on the data.

With median house values below $234,000 in Mount Gambier and Murray Bridge and average rents at around $250 per week, it shows from a cash flow point of view, and at a snap shot in time, these suburbs are performing well and are affordable.

If you want a long term approach to your property investments, looking at the yields is not enough. It is important to consider broader factors that will affect the value of your property over time. Examples include proximity to the CBD, new infrastructure or current activity hubs such as popular beaches, shopping centres or cinema complexes. If there are properties available in these areas that are still affordable this is a good sign that activity and demand is expected to rise.

So, determine what investment outcome you want to achieve upfront. Is this cash flow or long term growth?

Know your strategy and beware of buying blindly off the Top Suburb lists... dig below the surface.

Suzannah Toop

Thursday, May 21, 2015

Teamwork… the master key to success.

This week has been a unique week for Team Toop; one that has enabled us to see our strength as a team and just how important teamwork is in a real estate business. This first week of our 31st year in business has proven to us just how much more is achieved when you have a true team culture.

On Monday Toop&Toop took its 2014 Annual Awards winners on a four day conference to Seminyak in Bali. With many husband and wife teams in the mix, a total of 18 Team Toop staff hopped on a plane to our inaugural Toop&Toop Award winner's conference.

It is not every day that you have many of your key team members leave the country at the exact same time. Traditionally, a business would plan to stagger staff leave... so for us to actually organise this deliberately, on the surface, could seem quite crazy.

We can now look with the benefit of hindsight on 
this idea of all heading off as one team for training activities and time together. The 2015 Toop Conference in Bali has to go down in our history 
as one of the best things we have ever done!

The conference gave us a chance to bring some of our best minds in every area of real estate together to workshop some important aims... What are we doing now that is great? How does our team become even better at what we do? What ideas and innovations can we provide our team and bring to our industry so we can continue to provide an unmatchable service and experience to our clients?

Amongst the group, were our top performers in every area: Sales, Property Management, Marketing, IT, Admin and Customer Service - we had every area of the business represented. The topics we discussed and the ideas we came up with were phenomenal, with the outcomes being immediately implemented.

Teamwork is a word that can be easy to throw around, yet can be very rare to see in action. It can be hard to spot the performing team because they are seamless, and true teamwork always appears to stem from the deepest part of a business culture.

This year marks our 30th year in business. Anthony and Sylvia have been one of the strongest types of teams for over 35 years - husband and wife. They both started and grew Toop&Toop on what I consider to be the strongest example of teamwork I have ever seen, and this week we were able to see Toop&Toop's DNA of teamwork in action.

The power of teamwork in real estate is so important and cannot be overlooked as it ultimately impacts our customers' experience. In an industry that appears 
to be built on the success of individuals, if a strong team structure does not sit behind it, the client ultimately loses out. With 18 of us 'on location' including Anthony, Sylvia, Suzannah and I, the true testament is to how seamlessly our team back on the ground at home ran things.

This week Team Toop was able to achieve more than we ever thought possible. At our conference, 
we collaborated our knowledge and experience to tackle industry-wide challenges, and have worked out strategies and implementation plans to increase customers' experience with real estate.

Back home, our team has been continuing to focus on pooling information and commutating to Adelaide's active buyers (currently sitting at 4,657) on the latest listings, opens and auction times. Toop&Toop provide instant feedback to our vendors immediately after inspections with all the details on who came through their property and what they thought of it - even down to the detail of how many times they have been to the home.

Collaborating our entire teams' knowledge and intel to provide our clients with this type of information, plus much more, can only be unlocked when you have a true team culture.

So to the entire Team Toop, congratulations guys on a very productive and exciting week!

We can't wait to demonstrate what our team has come up with at the inaugural Toop&Toop Award winner's conference!  

Thursday, May 14, 2015

Dropping, dropping, dropped... Property investors, now is your turn to make some money.

It's historic times in the property market with the Reserve Bank of Australia dropping rates by 25 basis points to 2.0% two weeks ago. This is unprecedented. Borrowing is unbelievably cheap when compared to historic norms and largely driven by non real estate factors. So how do we think this will pan out across South Australia?

Across the board we are witnessing buyers making the most of the low rates, and are expecting the latest rate drop to continue to spur on activity.

For new entrants to the market, it's high fives all round as market funding is just so cheap, and South Australian prices are now disproportionately low compared to Melbourne and Sydney markets. 

So let's talk about money.

What about those who 'locked in' on their higher interest rates? Some of the more conservative investors in the market have been caught with a fixed rate, as at the time, the rates were considered market leading. Now with the benefit of hindsight many can see they should have gone variable.

There are plenty of war stories to go around, however the good news is, there may be some relief for investors being faced with this. 

Our Property Management team work very closely with Funding Options, a mortgage broking business headed up by Dom Cassisi, and together we are helping to increase our clients' returns substantially by reducing their funding costs.

A great example of this was last week. One of our landlords, a young family with a child, achieved a saving of $150 per week, $7,800 per annum on a loan amount of $544,000 over their two properties! They fixed two years ago at 5.75% (a cheap and market leading rate at the time) and now Dom and the team have put them on a three year fixed rate of 3.99%. It's huge, and they are over the moon!

A second example involves a landlord who has a substantial amount of equity in their investment property. They had a small debt over the property of $170,000 at an interest rate of 6.0%. They also had a personal loan and car repayments at a much higher interest rate. Dom and the team were able to refinance their investment property and increase the lending to pay out their debts at a variable rate of 4.4% (prior to the recent rate cut). This saved them $200 per week!

To put it in perspective, imagine your Property Management team calling you out of the blue to let you know your tenant is offering $200 extra in rent per week, without any additional work or expenses, just because.

In my view, it's money for jam.

Funding Options are supporting our landlords to navigate through this space and we are hearing good news stories appear from everywhere. 

If you are a landlord, irrespective of which company you are with (or which AFL team you support), make sure you give Dom a call on 0407 797 249 and have a chat.

Remember, when you are a landlord, you are in business and just like any business there are a number of factors to consider to maximise your profit, and maintain it. By taking a holistic approach to your investment you can add huge dollars to your bottom line every week. Dom and I would love to talk through how we can help with your investment properties so give us a call. I'm really enjoying working with our landlords (and Dom) and helping our investors in far more ways than just collecting the rent.

Suzannah Toop

Thursday, May 07, 2015

All things change... 30 years on and still as true as ever!

Team Toop celebrated a very special milestone yesterday - 30 Years in Business! As most do when they reach any of the big birthday milestones, this week has been one of reflection for us at Toop&Toop. Taking the time to look back on how far we have come as a company, it really is amazing to see how many incredible things Mum, Dad and the whole team have achieved!

When Toop&Toop first opened the doors on 8th May 1985, the business world was a very different place. It was a world without the internet, mobile phones and even pagers. While I grew up through the online transition, and do remember life before the worldwide web, from a business sense, it is still so hard for me to comprehend just how businesses ran back when information and communication seemed so limited.  

This week Dad showed us the very first Toop&Toop Business Plan and marketing material. The Business Plan was written up with a top of the range typewriter, which was apparently very high tech back in 1985. What was remarkable to see right there in black and white, was that even after 30 years our company purpose and values are still exactly the same, word for word, embedded into our team as it has grown from two to 132 people.

With the dramatic changes we have witnessed in business operations over 30 years, it becomes really interesting to look to our Toop&Toop traditions and see which ones are still in place, standing the test of time and change.

Ever since I can remember, Tuesday was my favourite time to visit the office. Tuesday was sales meeting day, and straight after this, our team jumped into cars together and visited every new listing we had that week.

Teamwork has always been important at Toop&Toop - its power and benefits to sell our clients' homes is something we have always recognised and seen value in. Technology today has just enabled us to work as a team even more efficiently. This is a tradition we still have 30 years on; our whole team still meets every week on a Tuesday, we still view every new listing and listen to the sales partners give background... the only difference is now we don't need to get into cars and physically visit each property. Technology and innovation has enabled us to achieve the same result in a fraction of the time without leaving the meeting room through the internet, photography and videos.

Looking back at some of the biggest brands over the last 30 years (Apple, Nike and McDonalds to name a few) it's very obvious that these brands are still successful today because they have understood the importance of innovation and moving with the changing consumer.

Embracing technology and innovation is at the core of our culture; it is what we are passionate about, and Suzannah and I are proud to be a part of such an incredible, forward thinking team. We are in a fortunate position to learn from the experience and knowledge of the past 30 years in business as well as from some of the most experienced real estate agents in South Australia. We have some exciting innovations in the pipeline and we're so pumped up and excited to show you what we have in store this year... and the next 30!!  

Happy Birthday Team Toop!