ISSUE 134 - AUGUST 2016
IN THIS ISSUE...
MAINTAIN THE VALUE OF YOUR INVESTMENT
Like most investments, property assets will provide maximum long term and short term returns if they are actively managed and maintained.
In particular, it’s important for property investors to ensure that the fabric of the property is kept in good order. This will not only attract and keep better quality tenants and achieve higher rents, but will also avoid major problems that could cause deterioration of the property and impact its long term capital growth potential.
Regular Check-Ups Avoid Long Term Problems
Regular checks by a builder or handyman can ensure that small problems such as leaking gutters or cracked roof tiles don’t turn into major problems like damp, crumbling brickwork and rotting joists. A professional Property Manager will take note of any obvious problems or warning signs during their regular inspections, such as mould growth or damp patches on walls or ceilings, and tenant complaints will also provide a warning that something is amiss. However, we also recommend that freestanding houses should be given a “once over” by a licensed tradesperson every year to identify any issues that need to be fixed before they cause major deterioration to the property. In apartments, issues with the common property elements of the building such as balconies, walls, floors and ceilings, should be identified and brought to the attention of the Building Manager or Owners Corporation, who are responsible for organising repairs and covering the costs. Your Property Manager will be able to advise on appropriate action for strata apartments to initiate repairs or remediation work.
Don’t Let Pests Get A Hold
Termite infestation and damage is a major problem in Australia, with estimations that 1 in 4 Australian homes have some level of termite damage, causing around $700 million of damage every year. Unfortunately, by the time there are visible signs of termite damage, termites are usually well established, have often eaten a large amount of the available timber, and can have damaged the structure of the house. Early detection of termite infestations reduces the level of damage and the cost of repairs. In addition, other pests such as cockroaches, rats and mice, can carry disease – and make it an unpleasant and unhygienic home for your tenants. Cockroach infestations are particularly common in apartment buildings, and may require a co-ordinated effort by property owners to eradicate them. We recommend that properties are inspected for termites and pests on an annual basis and treated if necessary.
Good Safety Reduces Risks and Costs
Under Tenancy Law, rental properties must provide tenants with a reasonably safe and secure environment. This includes a number of aspects of the property, such as security for windows and doors, ensuring decks and balconies are safe and pool fencing. In addition, it is the law in NSW that every residential property must have a working smoke alarm. Not only does this protect the lives and possessions of your tenants, and your property, it’s important for your own risk management and insurance requirements. In a rented property, the maintenance of the smoke alarms is the responsibility of the owner – not the tenant – and that includes checking they are working properly, changing the batteries and replacing expired alarms. We recommend using a service which provides regular maintenance checks and replacement for a fixed annual fee. If your rental property does not adhere to legal safety requirements, your insurance could be invalid and you could be responsible and liable for any injury, loss of property or even the death of a tenant.
Maintain for Maximum Returns
Keeping your investment property in good order also makes good business sense in terms of the rent you can charge, as well as maintaining and increasing its capital value over the long term. With vacancy rates starting to creep up from a record low point, tenants will have more choice of where to live and how much to pay. In order to keep your rental returns at the level you want, and be able to increase rents in line with market values, it’s vital that you offer competitive quality. It’s often the case that you can pick which properties are owner-occupied and which are tenanted, and it’s not always the fault of the tenant. Many “set and forget” landlords don’t carry out the general maintenance tasks that they would consider essential for their own home, and are then surprised when tenants don’t stay or major work is required to get the property up to standard to lease or sell. Keep your property at a standard you’d be happy to live in, and you’ll find your tenants are happy to live there too. And a final financial reason to keep your house in good order: all repair and maintenance tasks, smoke alarm servicing and pest inspections are deductible against income.
- Maintain your property to maintain your income and attract and retain quality tenants
Ensure your property meets safety and security requirements and minimise your risks:
- Talk to your property manager or employ a builder to organise regular building maintenance inspections.