Scary drug house story – why you should work with your agent!

Below is an abbreviated version of a story published on domain.com.au in relation to an agency who seemed to care more about getting the money to the landlords whatever the cost, more so than doing the job properly to ensure the right tenant is found.

A recent VCAT case and consumer affairs investigation has recently found a south east Melbourne agency guilty of breaching the agents code of conduct.  It has been found that said agency leased 21 properties to a local sports bar manager.

6 Signs to look for in a good property manager!

Smart investors know that you can not have successful long term investments without said investments being looked after and used at their full potential. 

I hate to say it though, but I see far too many investors not putting enough thought or even effort into who is the best person to professionally manage their rental properties (And don’t get me started on those who try to save $100 per month on self managing).

Those who win the most from their hard earned investments understand that like most things involving money, that property investing should be treated like a business.  Emotion need to be removed from the equation and the best professional real estate agent, local to their investment property, should be chosen to look after their property.

It should come as no surpise, but not all property managers offer the same service and not every property manager has the same qualifications, policies and procedures to ensure that you are well looked after.  So, what signs do you need to look for to ensure you’re picking the best??

The following six indicators show what to look for (and what to steer clear of).

1. Job Satisfaction

If your property manager does not enjoy their work or receive any form of satisfaction from what they do, their care factor for your investment will be minimal.  It’s a stressful and difficult position to fill that never gets enough credit.  So if your property manager can not handle the rough and tumble that comes with the industry, chances are they won’t be there long term.  High staff turn over is one of the biggest problems in the industry that mean lost information, lack of communication and problems for your investment.  So find someone that genuinely enjoys what they do!

2. Communication

At the very minimum, you should hear from your property manager every week when your property is vacant, before you don’t receive the rent if there’s a payment issue, you also should be contacted for your routine inspections (invited to them) at 3 months into a lease and every 6 months after that (in Vic), receive the routine inspection reports and rent reviews (3 months prior to a lease end or every 6 months if they’re not on a lease).  Beyond that, you should be able to get a hold of your agent during business hours.  If you call and call your agent and don’t get a return call in 24 hours, then somethings wrong there.

3. Strong reporting

Following on from regular rent reviews and routine inspections.  These are the simplest items to diarise, report on and ensure that you receive within the time frames stipulated by the legislation.  If you are not receiving detailed routine inspection reports and rent reviews at a minimum, then you’re not getting the service you’re paying for.  When choosing an agent, ask for these- they should be able to provide you with an example to help your decision making process in choosing the right PM for you.

4. Poor or no maintenance

In a perfect world, nothing would ever break and things would last 50 years or more.  But, that is not the case.  If you have tenants living in your property, there is always something to fix or be looked at.  Preventative maintenance saves you money in the long run.A good example is noticing a wet patch in a ceiling or wall near the bathroom, or cracks in the grout of a shower – having this noted and investigated (a clear sign of a leak) is much cheaper than waiting until the problem becomes an obvious mold issue which can require full internal wall replacement.  Getting maintenance done in a timely manner also keeps happy tenants – regardless of the hard conversations that property managers have with owners (no one likes to part with money unnecessarily) they need to be telling you about maintenance and in some cases, convincing you for your own good to get it done!

5. Legislation and compliance knowledge

The legislation in relation to residential tenancies is quite complex and with the rise of the tenants union and knowledge being readily available to everyone with a smart phone, landlords are finding themselves in hot water more often as they inadvertently breach the act and are taken to VCAT for this.  A good example from one of my very own landlords this week was where he advised that he would only complete the maintenance if the tenant signed a new 12 month lease!  (for those of you in the know, you can’t do that.  The tenant has every right to take this landlord to VCAT in order to get the maintenance done via VCAT order as well as seek compensation for the time the maintenance was not done!  If your agent cares about you and your property, they’ll tell you this even though you might not want to hear it!

6. Follow up

A good example of this is when your property is vacant.  It can be a most stressful time especially if you depend on the rent to pay the mortgage.  So you would expect your agent to follow up every potential lead and every good application until it’s leased, keeping you informed along the way.  When you’re kept in the dark, either the property manager is too busy to get in touch with you (just take a moment to think about how that reflects on your vacancy / loss of income), or, it’s not part of their process which also indicates a bigger problem.

I know it’s a long post, but I think it’s an important one, and if you’ve made it to this far, then you’re likely to be a good caring landlord that I would love the opportunity to work with. If you have any questions on our processes and how we can help you with your investment, get in touch! Those who do not think these items are important when looking after their investment, often don’t realize the actual loss they suffer when things go wrong and how preventable that could have been.

Fraud on the rise!

Phishing scams and internet fraud is nothing new. We’ve probably all seen the reports on the news about the more vulnerable members of our society being duped out of their hard earned money by international gangsters who have used the old lottery win line or have catfished poor lonely people only to get them to transfer away their life savings.

But, what you might not have realised is how clever these thieves are becoming, how this can turn into Real Estate Fraud and how you need to be aware on how to protect yourself.

One of our related offices recently avoided a significant financial loss due to a simple email fraud set up. How did it work?

1. the sales agent received a genuine looking inquiry on one of the properties he was selling that had a pdf file to some offer documents.
2. Sales agent opened the documents thinking nothing of it, and noticed nothing at the time when the document failed to work, contacted the owner of the email to resend but never got a response, not realizing the hacker was already in.
3. The hacker had gained access to the computer and the sales agents emails. Going through them, they found the information of a recent sale and proceeded to email the purchaser to change the bank details for the transfer of the remaining house deposit.

The sales agent, following strict office procedure, had contacted the purchaser as a matter of course to confirm the deposit prior to it being due and it was through this action, that the transfer to the hackers account was avoided!  But had the sales agent not been providing the high contact service to the purchaser (As some do once the property is sold and contract unconditional), then the purchaser would have transferred the funds and they would have been lost!

Working in the world of property management, this is a little less common on our side of the real estate game but it’s not unheard of.  There have been cases in the industry where owner’s emails have been hacked (like your home hotmail account) and emails have been sent to real estate agents requesting bank account changes for the rent to be paid into.  That one is easily preventable by ensuring that such requests are double checked by direct contact with owners, but it just goes to show that you have to be careful at home as well as in business.

Ways to prevent potential fraud (direct from one of our awesome IT Boffins in the Eview group);

  1. Never open an email that is not authentic and if you do or are told it was infected and you opened it, immediately change all your security passwords from another clean device.

PC/MAC Security.

  1. Anti-virus

Use a reputable paid anti-virus solution to protect your system (Norton, Bitdefender, Kaspersky…). After all it is the lifeline of your business and you should not compromise on security.

  1. Anti-Malware

Use a dedicated paid malware solution. I personal use Malwarebytes and find it to be the most successful in protecting against malware and cryptolocker

  1. Backup

Backup! Backup! Backup!. The Cryptolocker attack will damage your cloud backup so it is importantr that you use a removable device to backup your most important data. Eg. USB flash drive or USB external Hard Disk drive. Not just one drive use multiple devices just in case it gets damaged or attacked if you leave it plugged in your computer during an attack. Don’t rely on cloud backup.

Remember you can have the best security in place, all the right backup procedures but the biggest risk of security is yourself, the user. Most attacks are because a user clicked on the wrong link, email, or went to a dodgy web site. So be vigilant and notify your IT support staff (or if it’s your personal email, contact a reputable it consultant in your area – if you need one, let me know and I can try to help) ASAP if you have clicked on something you shouldn’t have.

 

Free Safety Cord Kit from Consumer Affairs – Vic

Understanding the potential danger of blind cords, in particular for landlords, is quite important.

Young children can strangle themselves with looped curtain and blind cords. At least 12 young children have died as a result in Australia since the year 2000, including two in Victoria in August and September 2009.

Why are loose cords dangerous?

A child can place the loop over their head and/or get tangled in loose cords when they are:

  • in a cot or bed where cords are hanging
  • playing near cords, or
  • standing on a chair, sofa or bed to look out of a window.

To assist in preventing this, anyone can order a free safety kit to make looped curtain and blind cords safer in your home. Order through our online order form or call 1300 55 81 81. Stocks are limited though so if you do miss out on the free kit, we would still recommend arranging them to be installed yourself (it’s not complicated and all the equipment is available easy and cheaply from Bunnings or any hardware store). Or, get in touch with your property manager as our handymen can complete the job at a reasonable price- remember, there is no price on piece of mind!

Landlord to maintain premises – Supreme Court Ruling

A recent landmark supreme court ruling has sent ripples through the real estate world and has ramifications for properties that are not kept in good order.  Section 68 of the residential tenancy act states that it is the landlords obligation to maintain the premises in good repair.

In the past, there has been a consensus that if a tenant has viewed the property prior to moving in, that it is what it is and that’s how they accepted it.  This is no longer the case.  The supreme court ruling which can be found here but the gist of the ruling is as follows;

Tenant viewed a property and lived in the rental from 2008 –  2013, near the end of the tenancy, the tenant applied to VCAT for $50pw in comp (over $14,000) because throughout the tenancy, and prior to moving in, there were holes in walls, holes in the ceiling and floor, mould, rats and flooding issues…  The original hearing was awarded in favour of the owner as the tenant had not filed the appropriate maintenance requests or breaches – however, this was appealed  and as heard in the Supreme Court – it has now been interpreted that a landlord must maintain the premises in good repair – regardless of how it was when a tenant inspected it and, they are obligated to ensure it is in good repair more so than simply waiting for the appropriate maintenance notice from the tenant.

How does this affect a good landlord?  It doesn’t.  Good landlords look after their investments and ensure that everything is in good working order.  Good real estate agents inspect the property every 6 months (first one at 3 months into the tenancy) and with those inspections general maintenance is identified and acted upon accordingly.

For those that are the stereotypical slum lord, this is where the legislation interpretation will affect potential outcomes.  Here are some of the excuses I’ve heard over the years that certainly will no longer fly;

  • They inspected it like that so I don’t have to fix it.
  • I’m going to make that hole a feature of the wall (Rather than fix it)
  • They have a split system, I don’t need to fix the wall heater.
  • I lived in the property like that, so I don’t need to fix it

For those of you in the industry, have you got any good excuses?  Let me know in the comments section so we can all have a laugh.

 

Buyers Advocate – yes or no

There is a bit of a trend for savvy investors to source their next investor through a Buyers Advocate.  For those of you who don’t know;

Buyer’s agents (also known as ‘buyer’s advocates‘) are licensed professionals that specialise in searching, evaluating and negotiating the purchase of property on behalf of the buyer. They do not sell real estate.

They charge a fee (Ranging from $1000 up to 2% of the total sales price) to arrange purchase a property for their client. But when you think about that – if you’re buying even a cheap investment at $300,000 – that’s up to $6,000 in fees.

So if you’re not prepared to pay that to get the professional advice on your next investment, where do you turn – Sales agent?  I hate to say it, but sales agent’s tend to have a vested interest in selling you the property so there’s the opportunity there for them to provide data in its best light to sell you a property that gets them the commission!

Here’s a thought though – why not ask a property manager or business developer (for property management?).  They don’t charge a fee to provide information on how much they think a property would lease for and, property managers and bdm’s do not get commission when you buy a house.

Here at Eview Werribee, we offer all potential investors free market appraisals with current comparable data on what’s available to lease as well as what recently leased in the area relevant to the house you’re interested in buying.  If you’re thinking of buying an investment and you want to make sure it’s going to achieve the rent you’re hoping to get, why not get some free advice?  Contact me today so I can help you understand the local market – all for free.

Choosing the right agent

If you have ever had to buy, sell or rent a property, you’ll know that there is a wide range of agents to choose from.  When it comes to finding an agent to manage your investment property, who do you pick? Do you go for a franchise agent?  A boutique agency?  The cheapest one you can find on local agent finder?

As the landlord, the world is your oyster, but here are some things to consider when looking around.

The cost of your investment – this is something you worked hard for so it’s important you take the time to really investigate who you want to look after your property.  Cheap rates might be enticing, but how can an agency offer you cheap rates and provide top service for less money?  Do you really want to risk your property that is worth hundreds of thousands of dollars with someone cutting costs?

Reputation – with the internet, it’s so easy to google an agent.  If there’s something bad to be found, you can bet your bottom dollar it will be on line.  If there’s something good, even better!  They say only 1/10 who have a great experience share this with others so testimonials / good reviews are hard to come by so if your agent has them, you’re on the right track!

Skillyou might have to read between the lines here.  Think of a typical car salesman – don’t fall for the smooth talk, look for the data.  If you have an agent trying to tell you how much your house will rent for, they should have examples to back up their price.

Your point of contactthe person you’re dealing with to sign over your property.  Will they be the one actually managing your property, or, are they just the company business developer who will sign you up and hand you over to an unknown.

Communicationpretty simple this one.  When looking for a manager for my investment, I actually enquired about some properties on line to see what kind of service tenants were getting when looking for a rental.  To my surprise, only one agent emailed me back out of 5.  How will they lease a rental if they don’t respond to enquiries?

Those are the points I tend to look out for (even though I’m an agent myself, I chose an agent to manage my investment property).  Let me know if you have any other points that you look out for when choosing a real estate agent?