RE/MAX Profile Landlords Newsletter July 2012

In this edition: How New Landlords End Up Losing Out… Feeling the Squeeze… Vacancy Rates Tighten Fix it or Fight… How Ignored Repairs Can Become Tenancy Disputes Investors Eyeing QLD as Vacancy Rates Dry Up…

July 2012

Feeling the Heat: How to Avoid Burns and Scalds in Tenancy Homes… Save $$$ with a Tax Depreciation Report! A Selection of Properties Leased This Month Quote Calendar of Events

Ways to Save $$$ for the End of Financial Year!

Wow another (financial) year has

flown by! With the new levels of

attention the ATO is focusing on

trust distributions, we are well and

truly on top of our year's financials

and hope the end of year financial

statement we are providing to you

following today's disbursement will

allow you to be also.

You should have received an email

from me earlier this month high-

lighting the importance of deter-

mining the distributions to mem-

bers of your trust prior to June 30.

In the past we worried about it

much later in the year but the land-

scape has changed now and we

are told it must be done in accord-

ance with the trust documents and

prior to end of financial year. If this

isn't something you have done yet

I would recommend addressing it

with your accountant today!

There have been changes from a

real estate sales perspective too

that you may wish to be aware of:

1. The removal of the sustainability

declaration, this is simply a saving

of time and most importantly the

trees! (It was considered a waste

of energy by most involved with it).

2. The changes in stamp duty

which will save home buyers

around $7000 from 1 July. If this

sounds tempting to you please let

us know as we would love to help

you with your next purchase. And

while we are talking of expanding

your property investment portfolio,

I think it important to mention we

manage properties across Bris-

bane, so no matter where you are

looking or if you have another

property already - we would love to

help you!

Grant and I will transfer your funds

today from the Sunshine coast

where we are enjoying a break

with Grant’s father who is out from

New Zealand. We celebrated his

80th birthday last week and are

looking forward to a week's relaxa-

tion with him and the boys and are

all hoping Jade will make it up here

also.

WE hope your financial year has

finished well and we would like to

sincerely thank you for your contin-

ued loyalty and support.

Wishing you health wealth and

happiness

Christina

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants

New data from SQM Research

shows the national average

fell to 1.7 per cent in February,

down from 1.8 per cent in Jan-

uary.

Hobart is breaking the trend as

vacancies increase, with rates

rising from 1.0 per cent to 2.3

per cent over the past 12

months.

Melbourne still has the highest

vacancy rate at three per cent,

yet also witnessed the biggest

monthly drop after falling 0.5

per cent. However, the Victori-

an capital has been oversup-

plied for several months. The

report reads, “This may come

as good news for landlords,

with the city’s vacancy rate

How New Landlords End

Up Losing Out…

Not treating property in-

vesting as a business

Forming a direct relation-

ship with Tenants

Thinking of the property

as your own home

Not conducting repairs

quickly

No depreciation schedule

Not increasing rents reg-

ularly

Losing focus on the big-

ger picture

Paying down tax-

deductible debt before

non-deductible

Not using a good ac-

countant

If your investment property is

not managed by our Agency,

we can look after your needs.

Contact us, for an obligation

free conversation about our

quality property management

services.

Feeling the Squeeze…

Vacancy Rates Tighten.

Residential vacancy rates in

most capital cities slipped for

the second month in a row in

February, with Hobart the only

capital recording an increase

in available rental properties of

0.2 per cent.

coming down to three per

cent, a figure seen by SQM

Research to be at equilibrium.”

Perth vacancies remained

steady at a national low of 0.6

per cent. However, listings that

have been advertised for three

weeks or more, when com-

pared to the total number of

established rental properties,

dropped by more than a hun-

dred, from 1,084 in January to

973 in February.

However, according to the Re-

al Estate Institute of Western

Australia (REIWA), the vacan-

cy rate of Perth was higher, at

1.6 per cent. Yet the REIWA

report acknowledged this was

the lowest vacancy rate expe-

rienced in Perth for more than

four years.

“We particularly note condi-

tions in Perth have now swung

heavily in favour towards land-

lords and we are now expect-

ing rents to rise in Perth by at

least five per cent for this

year,” said Louis Christopher,


month, while Darwin (0.7 per

cent) and Brisbane (1.6 per

cent) both slipped by 0.2 per

cent.

Source : Real Estate Business Bulle-

tin (21 March 2012)

The oven broke down com-

pletely. Siobhan phoned the

Agent, and a few weeks later

sent him a written mainte-

nance request.

The following month an electri-

cian came and said the ther-

mostat had to be replaced. Six

weeks after that, the over was

repaired, but the face plate

overhead and risked burning

anyone who accidentally

touched it.

Siobhan immediately notified

the Agent. The electrician re-

turned 2 weeks later and de-

termined the over needed a

new face plate.

At this point, Siobhan lodged a

Dispute Resolution Request

(Form 16) with the RTA and

an RTA conciliator facilitated

discussion between the Ten-

ant and Agent.

Siobhan sought $55 per week

rent reduction, dated from her

written notification to the Agent

and continuing until the oven

managing director of SQM Re-

search.

Perth real estate agencies

have been reporting strong

demand for rental properties,

with one agent in the city's

south reporting 82 separate

groups of people looking at

one property which was rent-

ing for $390 a week. The

agent who handled the trans-

action, Phil Davies, sales di-

rector at Century 21 Rocking-

ham, told Real Estate Busi-

ness he now has just four

properties available from a

rent roll of around 700.

This follows a report from

Perth-based real estate group

ACTON of a rental property

attracting more than 20 inter-

ested parties, with the property

renting for $20 above its origi-

nal asking price.

According to SQM Research,

Sydney (1.5 per cent), Ade-

laide (1.3 per cent) and Can-

berra (0.7 per cent) all

dropped by 0.1 per cent on-

Fix it or Fight… How Ig-

nored Repairs Can Be-

come Tenancy Disputes.

Poorly completed repairs have

sparked an increase in dispute

resolution requests between

Tenants and Lessors.

A Brisbane Tenant, Siobhan,

spent weeks trying to resolve

a problem with an oven before

asking the RTA for help.

Shortly after moving into her

apartment, Tenant Siobhan

noticed that the dial on the ov-

en was worn. As she could not

be sure of the oven’s tempera-

ture or setting, she wasn’t able

to use the oven.

Siobhan told her Agent about

the problem, and it took 6

months for the oven dial to be

replaced.

was fixed or the Tenancy

Agreement ended.

After negotiations in which of-

fers were put forward by both

sides, the Owner said he was

willing to allow a rent reduction

of $38 per week for the agreed

period.

Siobhan accepted the offer

and the conciliator drew up a

Conciliation Agreement, which

became legally binding once it

had been signed by Siobhan,

the Agent and the Owner.

RTA Senior Conciliator Mandi

Lewis said this case was part

of a growing number of dis-

putes prompted by general re-

pairs and maintenance.

“It is the Lessor or Agent’s re-

sponsibility to maintain the

Property in good condition,

while the Tenant must keep

the Property clean and un-

damaged,” Ms Lewis said.

“If repairs are needed, most

Agents require the Tenant to

log a maintenance request.”


sidelines while our market and

economy recovered from the

natural disasters last year,

which has put pressure on our

rental market,” Real Estate In-

stitute of Queensland (REIQ)

CEO, Anton Kardash, said.

“However, this pent-up de-

mand is now starting to dissi-

pate with the latest Australian

Bureau of Statistics (ABS) da-

ta showing increasing num-

bers of investors and first-

timers coming back into the

market.”

According to the REIQ, ABS

lending finance figures for

February showed the number

of Queensland investors was

up significantly compared to

the same period last year. The

data also showed that demand

from first-home buyers and

owner-occupiers was also

starting to increase.

“This more robust level of in-

vestor demand is good news

for our rental market given

more investors means more

investment stock for renters to

She said that if the problem

wasn’t fixed the Tenant could

issue the Lessor/Agent a No-

tice to Remedy Breach (Form

11).

If no agreement is reached

during the RTA’s free disputer

resolution process, an applica-

tion could be lodged to have

the matter heard by the

Queensland Civil and Adminis-

trative Tribunal (the Tribunal)

where an adjudicator would

determine the outcome.

Source : RTA Newsletter (April –

May 2012)

Investors Eyeing QLD

as Vacancy Rates Dry

Up…

Investors are edging back into

the Queensland market as va-

cancy rates continue to fall

across the state, new data

shows.

“Until very recently, we had

many potential first home buy-

ers and investors sitting on the

choose from,” Mr Kardash

said.

The latest REIQ March resi-

dential vacancy rates show the

majority of the state is enjoy-

ing strong demand from ten-

ants, with vacancy rates in

many areas now below three

per cent.

“A vacancy rate of three per

cent is generally considered to

be the equilibrium point of sup-

ply and demand,” the REIQ

said.

In Brisbane, the vacancy rate

has reduced to 1.7 per cent,

from 2.3 per cent in December

last year. Brisbane’s inner-city

recorded a vacancy rate of 1.4

per cent, down from 1.9 per

cent in December.

Agents from REIQ inner Bris-

bane accredited agencies re-

port supply levels remaining

limited as tenants stay put,

students are settled for the

year, and potential first home

buyers still opt for a wait-and-

see approach. Investment


properties currently up

for sale are largely being

bought by owner-occupiers

which is also contributing to

less rental stock overall.

The Gold Coast rental market

continues to improve with its

vacancy rate falling from 5.2

per cent in June last year to

3.9 per cent in March. Like-

wise, the Sunshine Coast has

improved from 4.9 per cent to

3.1 per cent over the same pe-

riod.

According to the REIQ, Gold

Coast agents are reporting in-

creased demand for houses

over units, which are still in

oversupply. Well-priced rentals

are also reportedly moving

faster. Agents also report a

recovery in investor activity - a

sign that confidence levels are

returning to the Gold Coast

property market.

The REIQ said demand for

property in Mackay remains

strong, at 1.7 per cent, howev-

er there was an easing com-

pared to December when its

vacancy rate was just 0.7 per

cent. Agents from REIQ ac-

credited agencies say this

easing level is due to a num-

ber of leases expiring as well

as the upper end of the rental

market moving more slowly.

Tenant demand remains

strong with some agencies re-

porting more than 10 appli-

cants per listing and less than

a week to let. Investor activity

is also reportedly on the in-

crease in the region.

Rockhampton recorded a va-

cancy rate of one per cent in

March, making it the tightest

rental market for major regions

across the state, according to

the REIQ. With tenancies re-

portedly taking less than a

week to fill, local agents are

welcoming the increased in-

vestor activity in the region.

The Cairns rental market has

also improved markedly, the

REIQ said, with it recording a

vacancy rate of 2.5 per cent as

at the end of March compared

to 3.8 per cent at the same pe-

riod last year. Agents from

REIQ accredited agencies re-

port a recovery in the tourism

industry which is improving

employment opportunities and

therefore demand for rental

property.

Source : Real Estate Business Bulle-

tin (1 May 2012)


stall tempering devices to re-

duce the post-storage hot wa-

ter temperature.

Source : RTA Newsletter (December

2011/January 2012)

seconds for a scald to cause

full thickness burns.”

Dr Barker said at 55 degrees it

makes more than 10 seconds

to sustain a full thickness burn,

yet at 50 degrees it takes a full

five minutes to sustain a simi-

lar burn.

For this reason, Queensland

law requires new and renovat-

ed buildings to have water out-

lets used for personal hygiene,

such as bathroom taps and

showers, regulated to 50 de-

grees.

New instant hot water systems

are factory pre-set to 50 de-

grees.

Existing instant hot water units

can be turned down to 50 de-

grees, saving money and, po-

tentially, lives.

Storage hot water systems are

required to operate at 60 de-

grees Celsius due to the risk

of Legionnaire’s disease, how-

ever property Owners can in-

Feeling the Heat: How to

Avoid Burns and Scalds

in Tenancy Homes…

Hot water burns is a potential

risk to be managed in all

homes including rental proper-

ties.

A medical practitioner, Dr

Barker gives this example:

“An 18-month-old child in the

bath of a rental property

grabbed the hot water tap and

turned it on before her mother

had a chance to react,” Dr

Barker said.

“The girl sustained deep burns

to her chest. At 60 degrees

Celsius it takes just one to five

Save $$$ with a Tax

Depreciation Report!

Order a tax depreciation re-port before June 30! Many Property Investors are unaware of the tax deductions available to them through de-preciation. Director of BMT Tax Depreciation Bradley Beer says “research shows that 80% of Property Investors are failing to take advantage of property depreciation and are missing out on thousands of dollars in their pockets.” De-preciation is missed because it is a non-cash deduction – In-vestors do not need to spend money to claim it. What is depreciation? As a building gets older, items wear out – they depreciate. The Australian Taxation Office (ATO) allows property owners to claim this deprecia-tion as a deduction. Deprecia-tion can be obtained by any


property owner who obtains income from their property. Claiming building structure as a deduction. Capital works allowance deductions are based on the historical cost of the building excluding the cost of all ‘plant’ and non-eligible items. As a general rule any residential building which com-menced construction after 18th July 1985 and any com-mercial property which com-menced construction after 20th July 1982 are eligible for the capital works allowance. Common depreciable items in an investment property. Plant and equipment items, commonly known as remova-ble assets, are also eligible for depreciation deductions. Each plant and equipment item has an effective life set by the ATO. The depreciation deduc-tion available on each item is calculated using the effective life. Some plant and equip-ment depreciable items com-monly found within a property include hot water systems, carpet and blinds. Claiming depreciation dur-ing a renovation. To ensure property owners are making the most of the tax deductions available, they should consider

a pre-renovation depreciation report. Old assets within a property can be worth thou-sands of dollars. When these old assets are replaced during a renovation, the owners may be entitled to claim them as a tax deduction. A Quantity Sur-veyor can ensure the owners are not throwing dollars away! The ATO has announced that they will be closely examining the returns of Property Inves-tors this year. Rather than self-assessing the value of assets in an investment property, In-vestors should enlist a Quanti-ty Surveyor to calculate the deductions available for a property. A Quantity Surveyor is a quali-fied professional who special-ises in building measurement and estimating the value of construction costs. Quantity Surveyors get involved at vari-ous stages of the construction process; prior to construction, during construction and post construction. They use their skills to ascertain the cost of building works on any project ranging from a residential property through to the con-struction value of a large com-mercial development. Quantity Surveyors are one of the few professionals recog-

nised by the ATO to have the appropriate construction cost-ing skills to calculate the cost of items for the purposes of depreciation. In the event that an Investor is audited by the ATO, a reputable Quantity Surveying firm will justify the deductions they calculated for a property. To maximise cash flow, Inves-tors should engage a special-ised Quantity Surveyor to complete a tax depreciation report. The fee for a tax depre-ciation report is 100% tax de-ductible. If the report is or-dered by June 30, the fee can be claimed straight back! Ra-ther than waiting 12 months to claim, include the fee in this financial year’s deductions.

BMT Tax Depreciation special-ise in maximising depreciation deductionsfor Property Inves-tors. Call 1300 728 726 today to order a report! Article Provided by BMT Tax Depre-ciation. Bradley Beer (B. Con. Mgt, AAIQS, MRICS) is a Director of BMT Tax Depreciation. Please contact 1300 728 726 or visit www.bmtqs.com.au for an Australia wide service.

16 July Mid Month Accounting 01 August End of Month Accounting

A Selection of Properties Leased This Month

Toowong House $570p.w.

3 bed, 2 bath, 1 car accommodation

Quote

“Nobody can prevent you from choosing to

be exceptional.”

- - Mark Sanborn, The

Fred Factor

Herston Unit $330 p.w.


RE/MAX Profile Real Estate 141 Boundary Road TEL 07 3510 5221 FAX 07 3876 5544

www.profilerealestate.com.au Bardon QLD 4065 TEL 07 3510 5227 Nikki [email protected]

www.propertyrentalsbrisbane.com PO Box 388, Paddington, 4064 Helen [email protected]

Marcia [email protected]

Errors & Omissions: These details have been prepared by us on information we have obtained and while we trust it to be correct, is not guaranteed by us and you should rely on your own enquiries.

Bardon House $995 p.w.


Calendar of Events

Documents

RE/MAX Profile Landlords Newsletter July 2012