SELLING A TENANTED PROPERTY

While many investors still own every investment property they ever bought as part of a self-funded retirement portfolio, there are others who want or need to sell a property because their circumstances – personal or financial - have changed. Is it better to give the tenant notice to quit before putting the property on the market or should they sell it while the tenants are still in place?

The obvious answer is to keep the tenants in residence. This incurs the least loss of income and unless the house is really dirty and untidy, a house usually presents better with furniture and household items making it look lived in.

However, there are times when a tenant in residence could be a financially less rewarding scenario. Tenants who do not want to move can put a lot of obstacles in the way of a sale. They can limit and postpone inspection access almost at whim in spite of legally having to provide ‘reasonable access’ (what is ‘reasonable’ to one person may not be ‘reasonable’ to another). By the time this sort of obstacle is sorted out, valuable time has been lost and many purchasers have moved on. If the market is not trending up, this can result in a lower sale price as the market drops before the property can be sold. Furthermore, if the seller is using the money for another financial project, delays in having the money available could cost them the project or render it more expensive if bridging loans are required. 

Disgruntled tenants can also highlight the property’s faults in order to put off prospective purchasers and while many owners are happy to absent themselves from the property to allow the agent to show the purchasers around at their leisure and improve their selling prospects, tenants have no such motivation to leave the property and many reasons to stay watchfully present.

Sometimes property owners have no inkling that tenants will behave badly in the event of a sale, but there is a bit of basic research investors can do to try and determine whether their tenants will play ball. Ask your agent how easy it has been for the agent to get access for periodic maintenance inspections or for tradespeople who have been contracted to carry out work on the property. Tenants who have been slow to concede access for activities such as repairs that will benefit them are highly unlikely to come to the party when they think they will ultimately lose their home to a successful purchaser.

Source: Courtesy of www.localpropertynews.net

Recruitment Career Night

CONGRATULATIONS to Adrian Dickinson of Bray Park!!

CONGRATULATIONS to Adrian Dickinson of Bray Park! Adrian and his band RVLR were selected from 100 entries to perform at SPLENDOUR IN THE GRASS later this month! 

This is a huge opportunity for Adrian and his band to be seen and move up in the music industry! Congrats again Adrian and band! We wish you all the best!  

Adrian and his partner Tanya recently purchased a property in Bray Park through David Deane Real Estate.

Morton Bay Rate Payers Action Group

Finally we are seeing the people rise up and challenge the excesses of governments on all levels, and we salute their efforts.
'Working families' are hurting from the never ending parade of governmental tax and basic charge increases. Pretty much all essential utilities are in freefall. Water is just one, but aligned to power, petrol, gas and rates it has gone too far. Its time for all governments to cut their endless wastage and imposts on the orderly flow of our community. If they cannot account for the waste its time to handover to someone else. Its not just charges and taxes its the provision of essential services which has deterioted to to such a poor level given the record taxes we paying.
We have a great country which is being driven back into the dark ages by bad government and self serving politicians, who focus only on re-election, with little or no leadership accumen.
We encourage all stakeholders to join the revolt and lend real support to the residents action group. Make no mistake these incompetents are not wasting millions they have graduated to billions. A billion is an awful big number?

TIP: Negotiating Tenancy Terms

When letting rental properties most associate the term period to a six or 12-month tenancy.

There is no law that states that you can only enter into a six or 12-month tenancy.

It can often be prudent to negotiate an eight-month or 11-month tenancy to maximise your income.

If your property has a pool and you are renting the property in January you would not want to enter into a six-month tenancy as the property may become vacant in winter, making it more difficult to secure a tenant.

It is also financially beneficial to try and have the tenancy agreement expire during a high tenant-demand period (such as January or February) to reduce vacancy periods and obtain the highest possible rent.

When negotiating tenancy terms our office will take into consideration all of the market conditions to ensure that we are entering into an agreement that will maximise your income. ■

HOW TO SUSS OUT A GOOD LOCATION

What do most experienced investors say about where to buy? Are a ‘good’ suburb and a ‘good’ location interchangeable terms? Real estate investors need to distinguish between ‘good’ in terms of ‘classy, expensive, elite’ and ‘good’ as in ‘llikely to go up in value’. While ‘good’ suburbs in the classy sense are also ‘good’ in the sense that they are likely to go up in value, there are many not-so-classy suburbs where the prices are more accessible for starting investors that will experience capital growth (on a percentage basis) just as fast as their more elegant cousins. So what exactly do estate agents, investors and experienced home buyers mean when they agree that a location is a ‘good’ one for capital gain? Experienced investors usually look for proximity to services or potential services such as transport, schools and other amenities, as well as areas of employment. Those who want even more support for their choice often analyse demographic trends so they can pinpoint areas of future housing need. For example it is possible to work out how many people in any given year are reaching what statisticians call the formation age. Those born twenty five years ago are now statistically ready to enter the housing market, either to rent or to buy - obviously creating demand. Investors should look at the history of the cycle of supply and demand for their chosen area and understand how this pattern relates to housing cycles generally. http://www.localpropertynews.net/

Experienced investors who understand the housing supply and demand cycle buy when the market is low. Yet this is the very time when many novice investors decide to sell their one and only property and invest somewhere else.Successful investors not only hold on to their property long term thereby maximising gain and income/cost ratio, they buy more properties whenever their accountant or financial adviser gives them the go-ahead. Another location investment indicator is rental vacancy rates. Areas where vacancies are low are not only likely to provide secure rental income but should also deliver good capital gain; prices increase because of demand from investors attracted to the rents and renters who are motivated to buy. In fact, no single indicator tells the whole story. As in any other field of human endeavour the luck factor can be minimised if people know that there are several indicators to consider. It also pays to seek advice from a wide range of sources: accountants, real estate agents, financial planners and other investors.