Friday, February 27, 2015

Mad March... Does it impact the property market?!

Sunday marks the start of what we 'Adelaidians' commonly refer to as 'Mad March'. With so much going on around the city, it sparks the question for vendors and landlords... is it mad to think about selling or renting a property in March?!

The short answer is: no, not at all. It can actually be a very clever strategy, and here's why...

Mad March is the time when Adelaide comes to life! The weather is great, the Fringe is in full swing, 'The Garden' is open and Clipsal is in town. There are also a number of festivals and pop up bars around the city, creating hype about town and bringing some serious crowds into Adelaide.  

Looking at our city transform over the last few weeks, it appears we are starting to follow the same trend as Edinburgh... their Fringe festival doubles the size of the city! In Adelaide, the Fringe alone attracts over 95,000 visitors. With so many people flocking to Adelaide in arguably the best time of the year, it could be the perfect opportunity to sell your property.

Interstate investors are already seeing the value of the Adelaide property market – the stable returns and consistent moderate growth make Adelaide an attractive market to be in for those who want to minimise risk. Property experts are tipping Adelaide as one of the best buys right now. With the Sydney and Melbourne markets inflated, we believe this will be the case this year. The buzz of Mad March can often be the catalyst for many to take action and start, or add, to their investment portfolio.

4,000 artists from around the country and the world call Adelaide home for over a month during the Fringe. So this is where investors who have a portfolio of short term lease investments in the city start to see very good opportunities.

The more cautious sellers may see Mad March as a bad time to hit the market because of the volume of activities, events and things to do on weekends. The school of thought being, that with so much to do around the city, buyer interest may drop off. We have found that this is not the case at all. While buyer demand remains consistent, we expect to see inspection numbers slightly decrease due to neighbours and passersby heading to events rather than inspections. However, the opening of the Fringe, coupled with the hot weather only saw a decrease of 83 groups through our inspections last weekend. This backed up what we anticipated.

If you are selling, or thinking of selling, particularly during the Mad March period, it is very important that your agent has worked with you on a powerful open inspection strategy. If buyers have limited time over this period, you want to make sure they prioritise your property over others on the market. It is important to make sure you talk this through with your agent so you maximise your campaign impact and cut through any Mad March distractions.

Toop&Toop looks as though we're in for a Mad March of our own, especially with the low interest rates and Adelaide's good value buying. This week we have 93 opens scheduled and 31 auctions booked for March so far. That's already an auction for every day of the month!

So if you're a buyer, seller or investor working out if you should make your next move in the market... with conditions so good, the market running hot,  and with so much that our beautiful city has to offer, we think you'd be mad not too!

Friday, February 20, 2015

Breakthrough Technology for Property Investors

This week's launch of  My Maintenance... Toop&Toop set to increase returns for Landlords!

Uncontrolled maintenance is the biggest industry issue that has never been resolved until now. Toop&Toop have developed a breakthrough solution for this age old issue faced by property investors. 

On Wednesday night, 18 February 2015 a new benchmark in the management of investors' properties was launched in South Australia. It was an exciting date for Toop&Toop as we unveiled an Australian first online maintenance system to our Landlord... introducing My Maintenance! 

So what exactly is My Maintenance?
My Maintenance is a centralised communication hub  between Toop&Toop, landlords, tenants and our tradespeople. It oversees the three key maintenance areas; Compliance, Preventative and General Maintenance. Through streamlining these processes, My Maintenance will significantly reduce costs to our landlords.
My Maintenance completely changes things... The smarts that are built into the system educate tenants and step them through maintenance issues which reduce costs and unnecessary call out charges for our landlords. It also allows our landlords to receive instant communication and updates on the maintenance of their properties from the initial request right through to the suppliers notes, to the completion of the issue. My Maintenance provides greater control and increased checks and balances to keep suppliers accountable. Landlords, tenants, suppliers and our team can log on onto My Maintenance anytime, anywhere.

My Maintenance General
This maintenance is usually requested by the tenant or discovered at a routine inspection by Toop&Toop, but is the source of the most concern for investors. Through the My Maintenance system, Toop&Toop, landlords and tenants receive live updates provided by tradespeople in the field... and this information can be accessed anytime, anywhere by  all parties providing more comfort to our clients.

Compliance & Preventative Maintenance
My Maintenance also houses our Compliance & Preventative Maintenance Packages. We have negotiated with suppliers an annual maintenance program. Our landlords can browse My Maintenance and create their own tailored package suited to their property needs. This is cost efficient and we have the commitment from suppliers that works will be completed prior to June 30 each year, preparing for seasonal issues and in preparation for winter. First rains and changing temperatures see appliances fail and being prepared with preventative maintenance is money well invested. Optimising cash flow and tax deductions is all part 
of managing our client's best investment returns.

My Maintenance... The key benefits
1. Reduced costs. Our landlords achieve reduced maintenance costs thanks to increased accountability and awareness of tenants. Tenants are being educated to check items before lodging a maintenance issue (such as the safety switch), reducing and minimising call out charges. The My Maintenance smarts provide hints and tips pointing tenants in the right direction. They love it too; it makes their life easy while saving our landlords money in unnecessary call out fees.

2. More control. Our landlords can browse My Maintenance 
to assess, approve or reject job requests, choose their supplier, apply a maintenance limit and manage quotes at a time that's convenient to them. Our landlords can also browse compliance and legislative information for their properties and customise Compliance & Preventative Maintenance Packages to suit their needs.

3. Increased checks and balances. My Maintenance has inbuilt smarts to ensure the tradespeople are accountable to Toop&Toop and therefore our landlords. There are timeframes and alerts hardwired and inbuilt into the system to track the jobs. Should maintenance not be met in a timely manner the job becomes 'overdue' and must be attended to.

4. Tenant rating and audit reports. Our tenants are asked to confirm their job has been completed and that they are happy with it. We have incorporated a rating system to ensure all parties are on the ball, and held accountable. My Maintenance has technology smarts which constantly monitor costs and checks for discrepancies, providing an audit trail at every step along the way. This, combined with the contractual obligations we have in place with our Preferred & Approved Suppliers, protects our landlords from paying too much or receiving substandard work.

5. Attract quality tenants. One of the best ways to protect your asset and to retain great tenants is to be proactive in dealing with common maintenance issues. My Maintenance is quick and easy for our tenants to use and ensures they receive quicker turn around times.

Why Toop&Toop are doing things differently
We have seen the difficulties first hand with tenants trying to report important maintenance, particularly when they work full time. Toop&Toop received a staggering 3,300 emails per day, 950 of which were attributable to maintenance. This would be typical for the entire industry. It cannot realistically be dealt with profitably and cost effectively with old technology and systems.

We are in a new world of instant communication – expectations have increased and we understand consumers want information to be at their fingertips. We are investing heavily into Property Management innovation as we want to reinvent this space and make our landlords and tenants lives easier, starting with My Maintenance. 

My Maintenance is a major paradigm shift, and with four full time IT programmers in our team, it is just the beginning of an entirely new era for our industry... very exciting! 

Thursday, February 12, 2015

Investing in real estate – let's do coffee

I've just returned from Bangkok, Hong Kong and China...what a property market... but what about Australia and more importantly South Australia? These are the current issues that stand out to me as a veteran real estate agent.

An era has begun where inexperienced investors and agents are diving head first into investing into property, and into businesses that manage these investments. Revved up by Spruikers with promise of financial utopia, it's not just the public, my concern is it's also happening to ambitious, inexperienced real estate agents. The responsibilities associated with managing property investment businesses in today's litigious and consumer-focussed environment mixed with high debt levels is a potent cocktail. Recent drops in interest rates have simply fuelled risk. Why? Let me explain.

Firstly ambitious young real estate agents have been buying up big. As a new era begins, 'baby boomer' agents' rent rolls, built up over decades, are being sought out by the young entrepreneur looking for instant businesses. They are selling for big bucks. Buying these established rent rolls is easy and they seem like such simple businesses to the inexperienced, just like investing in property seems so easy.

We are in an era where instant gratification has become the norm. Creating overnight businesses on a scale never contemplated as multiple established rent rolls change hands to create mega-sized business. Now add the wave of new property investors into the mix... this is exciting but could end up in tears if not done properly.

So with all the hype around investing at the moment, let me explain what you should you expect as an investor, from a professional property management agent.

Firstly, understand that each investor, even if it is with a single property, is actually running a small business. You are 'in the business of landlord'. Being a Landlord is being a Business Owner.

Businesses have risk, as they have returns and statistically not all small businesses survive. As with all businesses, you need a good management team. Ideally experienced, and time proven. Funding is critical. Beware of over committing with massive debt, this applies to both individual owners and agencies buying up rent rolls.

Here are some elements to consider in YOUR business.

Asset Preservation. Being proactive in the maintenance of your property is so critical to securing rental returns as it will help ensure you are not lumped with unexpected capital outlay all at the one time, affecting your cash flow.

Income Preservation. Daily rental arrears management is property management 101. With new privacy laws, the 'best practice' procedures that existed 12-18 months ago have changed but being proactive is key. Understanding what legal channels can be explored, and when is essential.

Legislative compliance. The new legislation, introduced in March 2014, has provided a minefield of reforms to grasp and not understanding the implications of these could prove extremely costly. Legislative compliance is now a core component of being an investor.

Marketing. Providing suggestions on the best way to present and style property to tenants is a new and emerging trend. Exploring marketing options, such as professional photography, can go a huge way to attracting tenants to your property, and making it stand out. Just like buyers looking to purchase, tenants are driven by emotion and creating the right marketing plan will help drive interest to your property.

Finance. Considering or reconsidering your funding options and what tax benefits may exist, such as depreciation schedules can add a significant amount to your bottom line.

Market Intel & Negotiation. Tenant negotiation is a fundamental component of securing your rental returns.  Being educated on the current market and where your property fits in the picture against comparable data is a must.

So when looking at the full picture of investing, there are things you need to look out for. What few would realise without thinking it through, is that real estate agencies are running two totally different beasts if they are in sales and property management. Experience in sales has no benefit to investors once the properties have been purchased. It is an entirely different skill set to effectively manage investment properties at a professional level.

Fortunately Toop&Toop has been in the business for 30 years this year, and rather than sell out, we have second generation family now running the show... with me right by their side every step of the way.

Suzannah, with way more qualifications than I ever contemplated, in law and commerce and with her connections... runs our Property Management team with the advantage of experience and without the limitations that come from financial pressures.

Optimising your investment returns goes so much further than the initial purchase; it extends over the life of your investment.

So if you want to be serious about getting into property, let's do coffee.

Suzannah is someone you simply must meet.

Give us a call.

Anthony Toop

Friday, February 06, 2015

New records have been set!

On Tuesday the Reserve Bank of Australia's decision to cut rates by 0.25% spread like wildfire. This was the first rate movement from the RBA since August 2013, which has taken the official cash rate to a new, all time low of 2.25%.

The Bank of Queensland immediately dropped their variable rate by 25 points leading the way for other institutions to follow suit. At time of print, the cat and mice game for the major banks was starting to get serious with Westpac announcing a 0.28% reduction to their standard variable rate. 

There has been a lot of talk this week on this decision, but what does this all mean for the property market right now?

This decision is sure to impact all areas of residential property; from renting, to investing, sellers and those looking to buy. Below are my thoughts on how we will see things start to change in each of these spaces.

Buyers: There are some definite tangible benefits that buyers will start seeing. I mentioned in my last article on the Australia Day weekend that I had just settled on my new home. As a new owner this decision could now save me an extra $100 a month in repayments which over a year, you can really start to see add up and help out.

Then on the flip side, with all the media attention around this decision and with conditions now even better, we are likely to see more people come into the market. The market is already very strong – last weekend we saw 749 groups through our inspections, a record for the first week of February. Now with this rate drop, we expect the numbers of buyers and investors in the market to rise again.

Buyers may also start to find that with the increase in competition, properties may achieve premium prices, and it could take longer to secure a new home. It's in this type of market where becoming a ToopVIP is so beneficial, as you can see our properties before they are publicly released. You also have the chance to view them and even submit an offer to the vendor before general buyers are aware it is coming up. (If you would like to join our VIP group, will give you all the information on how to sign up).

Vendors: These rate cuts could bring a whole new wave of buyers and investors into the market. The rate decrease may spur prospective buyers to bring forward their purchase decision to beat any perceived rush and could also allow buyers to revise their budget upwards given the lower rates on offer.

In certain areas of the market this increased buyer demand will be very obvious, but regardless, across the board we expect the level of buyers to increase. With this increase in competition, it is not just the prices that we believe will strengthen; it will be the contract conditions as well. In a competitive market with multiple offers it means that vendors may be able to not just drive their decision by price, but also by the most attractive conditions.

Landlords: These rate cuts provide a great opportunity to review your property portfolio to make sure you are leveraging the market as best you can. With first home buyers and investors likely to be increasing in the market, you may want to look at your personal investment strategy. If you have these types of properties that are in high demand in your portfolio, it could be a good chance to capitalise on this and perhaps think about selling and upgrading. It could allow you to then look at investments in a good value pocket of the market that may suit your investment strategy better.

We may also see pockets of the market where this rate reduction has acted as a catalyst for tenants to take advantage of the lower borrowing costs to get into the market themselves and break their lease early. If this starts to happen, it's important to make sure you are with an agency who understands this trend, and who knows exactly what the obligation and legislation is on this and who can manage your vacancy downtime so your returns are optimised.

Tenants: For some tenants this rate announcement could be very exciting! This could be the catalyst you need to take the leap of faith into becoming a home owner!  

No matter where you find yourself in the property life cycle there is no denying that these rate announcements are creating some exciting opportunities! We are lucky to live in Adelaide, one of the most stable property markets in Australia, and with the best market conditions we have ever seen, it is a fantastic time to make your next move in property!