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Nov 7, 2023
Preparing your property for professional photos
As a landlord, you understand how important it is to present your rental property in it's best possible light. One way to do this is by investing in professional photography. By showcasing high-quality images, you stand a better chance of attracting prospective tenants. But how can you prepare your rental property for professional photography? Here are some tips and tricks: 1. Tidy up and declutter Make the space you are photographing look as clean and tidy as possible. Remove any clutter that might look distracting in photos. Clear countertops, shelves, tables, and floors as much as possible. Following the philosophy of "less is more" can make the space feel bigger and more inviting. 2. Use natural light Optimal lighting is always the preferred approach when capturing photographs. Opening blinds and curtains to let natural light in is an effective way to show space. If natural light is not available, consider bringing additional lighting to properly illuminate areas that may be dim. 3. Dress up the space Style your property as you would for a open home showing. Add items such as fresh flowers, pillows, or additional props to help enhance the décor. Cute dining settings, staged seating areas in the living room and so on. This is to show prospective tenants how they can utilise the space and helps them visualise their future home. 4. Take exterior shots The exterior of your rental property is the first thing prospective tenants will see. Ensure the front is trimmed, weeded, mowed and organised before photographing. Aerial photographs and photographs that focus on your property’s standout features such as a pool, outdoor fire pit or BBQ area, can provide great selling points to your property. A well-designed and thought-out photoshoot of your rental property is an investment. It can attract the right people to your property and increase your rental yield. You only get one chance to make a first impression, so make sure you take the time to showcase the rental property in the best possible way.
May 4, 2023
Are you tax compliant as a property investor?
With tax time fast approaching, it’s essential to know what investment property expenses and income you will need to declare on your tax return in relation to your investment property. Investment property tax can work in your favour to reduce your overall tax bill and offset the cost of owning an investment property, but there are potential pitfalls to avoid. Take a look at what you can claim and why you need to be careful before you submit investment property expenses in your tax return this year. Investment property tax benefits There are plenty of costs your investment property allows you to deduct at tax time. Here are a few of them, according to the ATO website: advertising for tenants body corporate fees and charges council rates water charges land tax cleaning gardening and lawn mowing pest control insurance (building, contents, public liability, loss of rent) interest expenses prepaid expenses property manager fees and commission repairs and maintenance legal expenses depreciation on goods at the property Being able to claim these expenses on tax will reduce your overall holding costs and can push you further towards being cash flow positive. A reliable property manager will help you keep a record of each expense, and a good tax accountant will help ensure they are included in your tax return. Take note: your Perth property must be tenanted or at least actively available for rent if you wish to claim any deductions when you process your tax return. You also can only claim rebates for expenses that relate to the income production of the property and not to your personal use. See the ATO website for more information. You also need to declare the income you earn from your investment property. This includes rent paid to you as well as AirBnb fees, money earned from leasing a room, or leasing your place to family and friends at less than commercial rates. It also includes income relating to capital gains. Again, you’ll find information on the ATO website. 2023 ATO landlord crackdown This year, the Australian Taxation Office (ATO) is set to take a close look at investment property expense claims and income declarations. Reports say the ATO is expected to scrutinise 1.7 million Australian property investors, including those in Perth, using a new data-matching program. Agents from the ATO will be able to access account information from seven of the major banks, including ANZ, NAB, Westpac and St George, to confirm investors’ income and expense claims. This has come about after estimates showed there was a net tax gap of $9 billion in the 2019-2020 financial year, of which up to $1.3 billion may be related to landlord expense claims and failure to declare income. The data matching program will be able to collect personal information including loan account and transaction details. Having access to this information will allow the ATO to independently cross-check people’s claims and find out if investors are leasing properties without declaring their earnings. It is also possible that the ATO will be retroactively assessing 2021/2022 tax returns, so now is the time to contact your accountant and property manager to make sure your return correctly reflects your income and expenses. How to stay compliant The last thing you want as a property investor is to be investigated by the ATO because your tax return claims don’t match the transactions in your bank account. As mentioned, you need to work with an experienced property manager who will help you track and record expenses. If you incur expenses without looping in your property manager, keep them on file to share with your accountant. Be honest and upfront with your tax accountant. There are so many things you can claim and this should help you to offset the income you generate from your investment property. If you’re concerned that your tax return may not have been correct in previous years, you can always talk to your accountant about updating it. Do you need help to understand or report your investment property income and deductions? Get in touch today.
Mar 29, 2023
How to minimise the holding costs of your investment property
While there is the potential for long-term growth in the value of a Perth investment property, there are costs involved with owning this kind of asset. To maximise profits, it’s important to minimise expenses strategically. As property managers, we aim to help our clients reduce expenses as much as possible. Take a look at some information and tips from our team. What are investment property holding costs? Holding costs are all the things that add up to put you out of pocket when you own an investment property in Perth. The costs include outgoing expenses that you need to pay on a regular basis. For example: Council rates Strata fees Management fees (which we will discuss in more detail shortly) Upgrades to the home Repairs and maintenance The cost of the mortgage How to minimise holding costs As interest rates rise and mortgage repayments increase, minimising the expenses related to your investment property is crucial to generating more profit. Here are some strategies to reduce your holding costs: Stay on top of maintenance: Maintenance costs can put a serious dent in your pocket. By ensuring maintenance is dealt with swiftly, you can stop issues, and therefore costs, from escalating out of control. If you’re looking to buy an investment property, it is also smart to be highly aware of the condition it is in, so you know what costs you might incur. Ask for strata or building reports so you can be aware of any hidden issues. Get insured: Unfortunately, there’s always the potential for damage to the investment property due to a range of reasons. Insurance may seem like another bill to pay, but it will save you from paying a large amount if something goes wrong. We always advise our clients to take out insurance as part of the cost of owning a rental property. Monitor rental prices: It’s always best if your rental income covers as many of your out-of-pocket expenses as possible. If your tenants’ contract has expired and you are dealing with rising interest rates, consider increasing the amount you charge so you’re not losing out. With Perth rental vacancies being so low at the moment, you may have the ability to impose a change of costs. Speak to us to find out more. Tax deductions Many of the expenses involved with owning an investment property are tax deductible. Work with your accountant to find out what you can claim as a landlord in Perth as a way to minimise your holding fees. Investment property tax deductions include: Advertising for tenants Bank charges Cleaning Gardening and lawn mowing Insurance Land tax Pest control expenses Property manager fees and commissions (including prior to the property being available to rent) Secretarial and bookkeeping fees Servicing costs, for example, servicing a water heater Stationery and postage related to the management of the property Telephone calls related to the property You can also claim deductions on the interest on your home loan and costs associated with renovating the property. Keep a record of every expense and share them with your accountant. Depreciating assets Another thing to be aware of is depreciation. This means you can claim tax deductions based on the decline in value of the building’s structure, items permanently fixed to the property and even some of the appliances. Work with a specialist provider to request a depreciation certificate (the cost is usually a few hundred dollars). Share this with your accountant and they will use it to claim deductions on depreciable assets within the property on your behalf. Check out the ATO website to learn more about how this works. Use a property manager While some people see self-managing their investment property as a way to minimise the holding costs of an investment property, this approach is usually false economy. Firstly, if you don’t use a property manager, you lose valuable time. Depending on what your time is worth, it’s not often worth it. A property manager also understands the legal requirements of leasing a property to tenants. This has the potential to save you thousands of dollars as you can avoid a costly trip to the tribunal in the event of a dispute. Your property manager can also provide guidance about insurance and ensure the home is maintained in the most cost-effective way possible. He or she will help you find reliable, long-term tenants who will save you from the stress and expense of constantly marketing the place to new people. Looking for the best property managers in Perth? Get in touch today.
Mar 2, 2023
How to be a great landlord (and still make great returns)
Owning an investment property in Perth is a smart strategy to secure your financial future. However, it is a give-and-take arrangement with your tenants. If you’re a ‘great’ landlord, the people who live in the home will stay for longer and treat your property with respect. Meaning you will save money and maintain the value of the home. Here’s what you need to do to be a great landlord in Perth: Price fairly and raise the rent selectively Pricing your investment home or apartment can be tricky, especially when the market is tight for renters. To be a good landlord, the amount you charge needs to be reasonable and in line with similar properties in the area. When it comes to increasing the rent, try not to push things up too drastically in one go. Ensure your tenant has plenty of notice and stay within the rules (for example you can’t raise the rent every couple of months). If you do want to achieve above-average rates (and it can definitely be done), find ways to make the home more appealing, for example consider upgrading the kitchen to be more functional and modern. Be open to reasonable requests Perth is a family-friendly city that is hot in summer and can be cold in winter. If your tenants request an air conditioner, remember the saying about a bird in the hand being worth two in the bush. Your property manager can explain the long-term value of adding an air conditioner and help you figure out if it is worth the investment. Similarly, be open to conversations about having pets on the premises. It can be very difficult to find a place to rent with an animal in tow but if you allow your tenants to have a dog (under certain conditions), they are likely to stick around. Maintain the property Keeping the property in good condition is essential to being a great landlord and the bonus of doing so is that it will help protect your investment. Book tradespeople to visit regularly for maintenance and be responsive when repairs are needed. As a tenant, there is nothing worse than having your requests for things to be fixed going ignored, so have tradespeople who you can call on (or make it easy for everyone by having a fantastic property manager who will do this for you). Regular maintenance and professional repairs will stop small problems from becoming large/expensive ones, while giving your tenants reason to stay for longer. Be clear about responsibilities Communication is key when it comes to avoiding misunderstandings and conflicts with your tenants. Be clear about expectations for maintenance and repairs, and have conversations about who is specifically responsible for what. This can be in regards to mowing the lawns, clearing the gutters etc. If they agree upfront to take on these jobs, they will be less likely to complain if you ask why they are not done. Get conversations and expectations in writing to avoid confusion. Open communication makes the relationship better for everyone. Be accessible (or find someone who can be) Great landlords ensure someone is available to respond to calls almost 24/7. If you don’t like the idea of having your day interrupted, bring a property manager on board to take care of this job for you. Be respectful Above all, treat your tenants with respect and they will be more likely to treat your property with respect in return. Don’t drop by unannounced, but do listen to any concerns or feedback that your tenants may have. If your tenants feel comfortable and secure in their home, they will be more likely to be loyal to you. Understand and follow the law As a landlord, it’s important to understand and follow the rules. Some of the key legal requirements for landlords in Western Australia include providing a written tenancy agreement, giving notice before entering the property, and returning the tenant’s bond at the end of the lease. Make sure you understand your responsibilities as a landlord and follow the law to avoid any legal issues. Work with a quality property manager in Perth The absolute best way to be a great landlord is to outsource the day-to-day management of your property to a professional. Working with a quality property manager can be a game-changer for landlords because everything will be handled for you. The price is small in return for the peace of mind that your investment and the people who live in it are being taken care of. It also means you’re able to focus on the things you enjoy and love. Tenants appreciate being able to work with a responsive, respectful and knowledgeable industry expert, so if you want to be a good landlord, one of the best things you can do is get the right help. The best property managers in Perth have the goal of increasing the value of their clients’ investments as well as taking care of day-to-day requirements. To find out more about the proactive services D Residential offers property investors in Perth, get in touch today.
Feb 9, 2023
Where to invest in Perth if you want steady occupancy
One of the most important things to consider as an investor is occupancy. When you don’t have someone paying rent, it will be up to you to cover the mortgage and other holding costs in full, which will put pressure on your finances. The good news for Perth investors right now is that rental vacancy is at a 40-year low. However, if you’re looking to invest or expand your portfolio, you need to think with the long-term in mind. When the pendulum swings and vacancies rise again (you never know when this will happen), your property needs to appeal to renters and stand out from the competition. Here are some of the factors to keep in mind when selecting an investment property in Perth. Student-friendly properties While a freestanding house is always a good investment, if you are buying an apartment, townhouse or unit, there is a higher chance that you will have student tenants. Because of this, a suburb close to one of Perth’s universities is a wise choice. If you are buying a smaller place, consider: ‘Golden triangle’ suburbs close to UWA: Subiaco, Claremont, Shenton Park, Nedlands and Dalkeith Mount Lawley/Mount Hawthorn/Inglewood/Bedford or Joondalup/Heathridge/Edgewater for Edith Cowan students Bentley for Curtin University. Don’t forget the TAFE locations, either. Basically, any suburb that provides an easy ride on public transport to a major tertiary institution is suitable for an investment apartment. Keep in mind you may have a gap between tenants every few years as they graduate and move elsewhere. Close to hospitals or larger aged care facilities Healthcare workers often have a smaller budget and want to live close to their workplace. If you purchase a quality apartment or unit near one of Perth’s hospitals, you should be able to find a tenant who has a steady job and appreciates having a cost-effective place to live in. Places to consider could include: Subiaco for St John of God Hospital Subiaco Mount Lawley for St John of God Hospital Mount Lawley Mount Claremont for Graylands Hospital Nedlands for Perth Children’s Hospital, Sir Charles Gairdner Hospital and Hollywood Private Hospital West Leederville for West Leederville Private Hospital Perth CBD for Royal Perth Hospital Nurses and other healthcare workers often make excellent, reliable and long-term tenants. Close to public transport Being close to public transport is important for tenants who can’t walk to work or university. Consider properties near bus and train lines. While the property doesn’t have to be adjacent to a bus stop or across the road from a train station, there should be at least one option within walking distance. The next best option is to be a few minutes’ drive from a train station or bus interchange with plenty of parking. If you’re not from Perth and you want to invest, keep in mind that Perth is a very train-focused city. The train lines make life simple and convenient so always look for properties near to stations. Think about schools Just as you look for apartments close to university and TAFE campuses when buying an apartment, if you have the budget to invest in a family home, it makes sense to think about schools. Before you invest in Perth, speak to a property manager about who the tenants are likely to be. If it is a family with young children, aim for something walking distance from the local primary school. High school-aged children should be able to ride a bike or catch the train/bus without too much effort. Proximity to other amenities like parks and playgrounds will also be a bonus. A rental property that is a stone’s throw from a playground is always appealing to a family with young children. Think about lifestyle When people think about Perth, beaches come to mind. Coastal suburbs such as Wembley, Floreat, Scarborough, Cottesloe and Swanbourne are especially popular with young families who enjoy an active, beachside lifestyle. Perth is known for its coastline, so homes that are closer to the beach and have easy access to public transportation are highly sought after and are likely to attract long-term tenants. A little further from the coast, suburbs with a trendy village lifestyle are always popular. Leederville, Mount Lawley and Mouth Hawthorn are examples. When you’re deciding where to invest in Perth, keep the local cafe, pub and restaurant scene in mind if you think your tenants will be young professionals. The most sought-after properties are conveniently located, and these are the places that will maintain steady occupancy, even when the market changes. Property features Location and proximity to the things that make life easy are important factors but don’t forget to think about the property itself. Features that appeal to tenants include: Off-street parking/garage Air conditioning A courtyard or garden Up to date kitchen and bathroom Plenty of storage How to maximise occupancy when you invest in Perth Finally, and perhaps most importantly, if you want your property to be tenanted long-term with high-quality tenants, you need the support of a professional property manager. When you have a long-term relationship with a property manager who is caring, responsive and reliable, you’re more likely to have long-term tenants. This will go a long way to safeguard your finances and help you get more from your Perth investment property. Are you ready to find the perfect Perth investment property? Contact D Residential today.
Jan 24, 2023
Should I stay or should I go? To lease or to sell your investment property
At D Residential Group, most of our clients are investors who want to increase their long-term property investment portfolio, however we also work with clients in situations where selling the investment property might be the better option. The best time to evaluate whether to sell or continue managing a property is when you’re approaching the end of the current lease or if you’ve recently inherited a property. We’re constantly tracking trends, particularly across Mount Hawthorn property investment circles, and have come up with five factors to consider before selling. Speak with your local property manager Make the decision so much easier by speaking to a local expert who understands the property market, the potential profit and the costs involved. Our director Diana Patrascu is an expert in the Perth property market with years of experience and loves the opportunity to discuss investment potential (with a side of honesty if there is no potential!). Track the investment’s performance The most important consideration in property investment is always finances. If you’ve owned the property for a while, reflect on the income it provides versus the outgoings. If you’re not making money (or worse, losing it), and the home is depreciating, it’s a good sign it’s time to sell. If you’ve just inherited the property, research the rental income for the location and size, and whether demand is high. If this is all too much, refer to the above point and contact us. Consider immediate income versus long-term income There are times in life when money talks – your child’s school fees, retirement, reducing work hours or another investment might catch your eye. In which case, liquidating your investment property makes sense. However, if your property is in good condition and low maintenance, it is likely to earn you a good monthly income. The reason ‘safe as houses’ is a commonly used phrase is because most properties do increase in value over time. Also, if you’ve only had the property a short period, capital gains tax is a cost worth considering. Consider the tax benefits of retaining the property Property investment never has a ‘get rich quick’ slogan attached due to the big outlay to purchase the property – however, there are many tax benefits that significantly offset your tax. Renting your investment means you can claim deductions ‘for most of the expenses you incur’ according to the Australian Tax Office. These include interest on your loan, rental expenses (from council rates to property management fees) and building depreciation. The tax breaks for our clients are key to building their long-term wealth. Still unsure? There’s plenty more to consider, please contact us for an honest conversation about your options.
Jan 11, 2023
Should you increase the rent for your tenants in 2023?
Perth experienced excellent rental value growth in 2022 of around 9.1 per cent. This was thanks to vacancy rates sitting at record lows. If you are a landlord/investor and you have had tenants in your property for some time, you may be wondering if it’s possible to increase the rent you charge your tenants in 2023. A few factors will influence your decision and there are some things to keep in mind before you go ahead with a rent increase. Answer the following questions then contact your property manager for some more specific information: Has your tenants’ rental agreement expired? In Western Australia, rent can only be increased during the fixed term of a rental agreement if the fine print stipulates the amount of the increase or the method of calculating the increase. It won’t be possible to increase the rent if your tenants are still under an agreement with you and there is no clause about changing the price they pay. However, once the contract has expired, you will be able to review and increase the rent. Speak to your property manager about the status of your rental agreement/s so you can start planning a change. When did you last raise the rent? As shared by commercewa.com.au, “Where a tenancy is periodic (no predetermined finish date) rent increases can occur at six-monthly intervals (but no sooner).” If your tenants started paying more rent less than six months ago, you will have to wait before you can make another adjustment. Have you given the tenant notice in writing? Collaborate with your property manager to share a Notice to Tenant of Rent Increase (Form 10) and give your tenant 60 days’ notice about the change. The form should include details of the amount of the increase and the day it will take effect. Is the increase ‘reasonable’? Your tenant may have grounds to claim the rent increase is unreasonable if the change is drastic. Work with your property manager to define what is reasonable before you try to raise the rent. How much are other investors charging for properties in your area? Knowing current market conditions will help you decide how much you can raise the rent by. Again, your property manager is the best source of information. They can tell you what homes of a similar size and condition are leasing for in the streets around your investment property. What kind of relationship do you have with your tenants? Sometimes a bird in the hand is better than two in the bush. If your tenants have been reliable and have cared for the property like it is their own, don’t raise the rent in a way that could result in them moving out. When you raise the rent, you do risk losing your tenant. As a result, you will need to cover the cost of finding new ones, which may offset any financial gains. If a change is unavoidable, it all comes down to communication and reasonable increases, which your property manager can help with. On the other hand, if you don’t feel your tenants are holding up their side of the ‘bargain’, raising the rent can be a strategy to encourage them to move on. As mentioned above, tread carefully so you don’t get pushback and claims of unreasonable behaviour. At the end of the day, your investment property is a strategy to grow your wealth. If it has been a while since you last increased the rent and your mortgage has increased due to higher interest rates, a rent increase may be the right move for you. It is not always an easy decision to make so contact D Residential for personalised advice today.
Dec 1, 2022
Five top tips on preparing your investment for a new tenant
Whether you have a new investment property or a lease coming to an end, preparing your property to look fresh and enticing for your new tenant is critical for setting up a positive tenant/owner relationship. At D Residential Property Management, we manage the below updates for our clients and their investment properties in Perth, and often these updates increase the value of their rental properties. We also make the transition from one tenant to the next completely seamless. Check the basics Go through the property with a fine-tooth comb and ensure everything works. Check every light fitting (fresh globes are a nice touch), turn on and off each tap, test any appliances and flush the toilets. As we come into Perth’s summer with record temperatures and heat waves promised (see you at the beach!), check the air-conditioning and overhead fans function perfectly. Safe and sound Next check is the doors and windows because your new tenant should feel secure in their home. Ensure each lock works, windows both open and shut with ease, and security systems still function well. Quick refresh If your previous tenant lived in your investment property for a long time, consider refreshing its appearance in some simple ways. A neutral coat of paint for the walls, polishing floorboards, and new light fixtures or curtains/blinds can brighten an older home beautifully. If anything looks tired, now is the perfect time to update your investment. Invest in a professional clean It’s a lot more expensive than a regular clean, but good property managers recommend investing in a deep clean in between tenants. It goes beyond a vacuum and mop – these cleans are an all-day affair, including ovens, range hoods, kitchen cupboards (including above them where grease collects), sugar soap scrub for the walls, where the fridge was… and that’s just the kitchen. Providing this for your client will ideally encourage them to keep it to this high standard, too. Choose a good property manager Make your property investment experience infinitely easier with the help of a good property management company like D Residential Group in Perth. All the above tasks can be handled by us, plus tenant screening and future tasks such as maintenance, inspections, and administration. Contact us to discuss how we can help you further.