What to Look for When Buying an Investment Property

 A good investment property is one that leases quickly and for a good rental return. To ensure that your property is leased quickly, it needs to match what tenants are looking for. Some of these things include:

 · Heating and cooling options - things like ceiling fans, gas wall heaters, split systems, ducted reverse cycle air-conditioning. Ideally you should look for at least ducted cooling in your potential investment property.

· Storage - particularly built-in robes are a key point that tenants are looking for. If they are coming from a property with built in robes to one without, then buying wardrobes is a major expense that most don’t want to consider. Also a good-sized linen cupboard is highly desirable.

· Four bedrooms - depending of course on the area that you’re looking to buy your investment in, but in family oriented areas, four bedroom homes are in huge demand and achieve a much higher rental return. If it is in your budget, then we highly recommend looking at this option. Of course, closer to the city, your demographic is generally young singles so the four bedroom option is not so crucial.

· Safe, quiet neighbourhood - when you’re looking to buy your next investment, take a good look at the neighbouring houses - maybe do a drive-by at night time and/or on the weekends and see how much activity there is. If you want a high quality, long-term tenant, then a nice neighbourhood is crucial. You will still get tenants at the property, but they will all be short-term as they don’t want to stay too long.

What else should I consider?

It is extremely rare to find an investment property where the rental income covers the mortgage repayments 100% and even then, there will always be other expenses like maintenance and repairs. From our experience, the way to profit from an investment property is to hold onto it long-term to make profit from the eventual sale of the property. But the property needs to be well-maintained during its lifetime too - meaning you can’t allow the property to become run down.

Becoming an investor is a long-term strategy, not a “get rich quick” scheme. Always speak to your financial advisor to check your unique circumstances.

 “Smith Partners Real Estate is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how this information relates to your unique circumstances.”

For further advice contact our friendly property management team:

Tim Hines 

Property Manager

M: 0412 754 117

Emma Irving 

Accounts & Leasing Manager

M: 0488 226 624

Email: rentals@spartners.com.au

Web: smithpartnersrealestate.com.au

SPRING HOME MAINTENANCE CHECKLIST

Home cleaning and springtime go hand in hand! This is the season when countless homeowners turn their houses upside down to get rid of junk and deep clean the interiors and exteriors of their home. However, during this cleaning haul, the home maintenance aspect is completely overlooked. Hence, spring cleaning should always be combined with spring home maintenance! Here are some things to consider maintaining in preparation for the warmer months:

•  Touch up chipped paint

Whether it’s your walls or furniture, as you start cleaning up and moving things around, you’ll notice a few chips in some paint jobs. As small and unnoticeable as they may be, this will only lead to more peeling and eventually leave you with a tougher job of covering it up.

• Clean and service your air conditioner

Over the winter season, your AC will have collected dust which can clog your filters and vents. Worst of all, this dust and debris become airborne when you switch the unit on, causing allergies and the likes. Therefore, you should clean and service all your air conditioners when spring begins or have a professional do it for you.

•  Clean your dishwasher

This task is often overlooked when spring cleaning the rest of your home, yet it is very much necessary for proper functioning of the appliance. Moreover, a dirty dishwasher is unsanitary to say the least! Deep cleaning of your dishwasher can be done in 4, easy steps: 1) remove chunks or debris from around the drain; 2) place a bowl of 1 cup of white distilled vinegar inside and run an entire cycle; 3) remove the cup, sprinkle half a cup of baking soda at the bottom and run a short, hot cycle; 4) when the interiors cool down, wipe the inside with a clean, damp cloth.

• Maintain your yard/garden

Spring is a time where you can find both, dried up leaves and unwanted weeds growing in your garden. Use this time to maintain your yard by trimming hedges and bushes, mowing the lawn and fertilising your plants.

• Clean and check fly screens

Spring is the perfect time to let plenty of fresh air into your home. Make sure your screens are clean to limit the dirt and dust coming inside. Also make sure that there is no damage to the screens which will allow the dreaded flies and mozzies in!

Home Loan Pre-Approval

 When you decide that you would like to buy a property, it’s difficult to know where to start. While looking at property online can be exciting and daydreaming about what you can afford can be a bit of fun, it’s only a daydream until you take the first step of getting a pre-approval for the home loan.

Pre-approval is when a mortgage broker or your bank give you conditional approval on how much you could possibly borrow for a home loan. To assess this, you don’t need to have a property in mind, you will only need to answer some basic questions on your current income and expenses.

Make sure that you have your numbers as accurate as possible as you will need to prove it later down the track to get your home loan formally approved. Don’t try to hide anything because the truth will come out and cause issues if you want to go ahead with the home loan.

Once you have provided the relevant information, your home loan pre-approval provides a clear amount that you can afford to spend on your future property. This information means you know what price range to start looking at online and not get your heart set on a property that is beyond your budget.

Having a pre-approval also gives a real estate agent and the vendor of any property you’re interested in more confidence that the sale will go through. Without a pre-approval, your offer is viewed as a riskier option than one with it.

Keep in mind with your pre-approval that any changes with your financial circumstances will affect the chances of a formal approval once you find a property you wish to purchase. Major life-changing events like job changes, reduction in hours or going out and starting your own business will all mean getting a home loan will be more difficult and your pre-approval is no longer valid.

Once you find a property to buy and put your offer in, you will have to go through the process of getting your home loan formally approved which will include providing documentation to support your claims of income and expenses.

Getting a pre-approval shouldn’t cost anything and from our experience, we advise going to a highly recommended mortgage broker rather than just going to the bank you’ve always banked with. Unfortunately, the days of banks rewarding their customers for their loyalty are long gone. To get the best deal and to find the lender that will accommodate your particular financial situation, a mortgage broker is the way to go.

Having said that, you need a good mortgage broker to get the deal done. We have seen clients using a mortgage broker who have had finance declined but then when they use a mortgage broker we recommend; the same clients have their finance approved. If you would like to speak to one of our recommended mortgage brokers, please do not hesitate to contact us.

P: (08) 8251 3249

E: info@spartners.com.au

AIR CONDITIONER SERVICING

A question frequently asked by our landlords and clients – “Do I need to get my evaporative air conditioner shut down for Winter?”

There are a few factors that determine if you require an Evaporation Winter shut down.  If your unit is an older system, it will not have a self-cleaning function. This means that water will sit in the sump over the Winter period and as a result, this water will go stagnant and mould and bacteria that thrive in such conditions, could threaten the health and well-being of you and your family.  In addition, exposure to wintry weather could cause the unit’s small hoses attached to the pads to freeze over and burst/split. Replacing these parts can be costly, but most importantly avoided!! Therefore, a crucial step when shutting down your unit for Winter is turning the water off and draining the sump.

If your unit is a newer air conditioning system, it will have a self-cleaning function. This means it will have a valve that drains the water out of the unit once turned off to prevent water sitting in the sump. However, this function does not clean the unit and regular manual cleaning is still required; to ensure that built-up dirt does not damage your system.

If you have an investment property, then a small outlay just before winter and summer each year can save you big dollars down the track on costly repairs or replacement.

For your own home - winter in Adelaide is extremely cold! If your unit doesn’t have a cover or a Winter flap in the dropper, all that freezing air from inside will go straight into your house causing your heating system to work harder.

At Smith Partners Real Estate, we can recommend trusted trades to provide a comprehensive evaporative winter shut down, though following these critical steps:

• turning the water off to the unit
• cleaning out the unit
• flushing the unit out
• checking all parts for defects
• isolating the power to the unit
• fitting the Winter cover (if applicable) or check the Winter Flap is secure in place (if applicable)

We recommend to all our Landlords that a winter shut down should be performed each year to save them on expensive repair costs later down the track. To find out more on how we care for your investment, call Smith Partners Real Estate on (08) 8251 3249 to have a chat with one of our friendly staff.

SMOKE ALARM LEGISLATION

We regularly hear the reminders to change the batteries in our smoke alarms, but how many of us really know the laws around it? As a home owner (or multiple home owner if you’re an investor), you need to be aware that legislation is in place to make domestic smoke alarms compulsory for all residential buildings.

Smoke Alarm Types

The type of smoke alarm you require depends on when you purchased your home or the age of your home;

• For homes or residential rental properties that are purchased before 1 February 1998 you are required to fit a replaceable battery powered smoke alarm.

• For homes or residential rental properties purchased on or after 1 February 1998, regulation 76B requires a smoke alarm (or smoke alarms) to be fitted within six months from the day on which the title is transferred and be either a 240 volt, mains-powered smoke alarm or a 10-year life, non-replaceable, non-removable, permanently connected battery powered smoke alarm.

• For homes or residential rental properties built on or after 1 January 1995 the Building Code of Australia requires a 240 volt, mains powered smoke alarm.

• Smoke alarm maintenance is governed by both State and Federal legislation and any person who does not comply with the relevant legislation is guilty of an offence.

• Landlords who fail to take every practical step to ensure the safety of their tenants can face a multitude of unpleasant and unwanted consequences that, with the right guidance, can be easily avoided.

South Australian State Legislation

The Development Act 1993 requires smoke alarms must be installed on every storey, they must be located between each part of the dwelling containing bedrooms and the remainder of the dwelling. Smoke alarms must also be installed in any hallway leading to the bedrooms.

Landlords must comply with smoke alarm legislation in all residential rental properties including detached houses, villa units, sole occupancy units, guest houses and hostels.

Federal Legislation

Landlords must ensure that their rental property is properly fitted with the required number of working smoke alarms, complying with the Australian Standard (3786:2015), and that they are installed as outlined in the Building Code of Australia (BCA) part 3.7.2.3. This legislation is applicable to all states of Australia.

When selling a home, you will be asked as a part of the legal documentation if you have a compliant smoke alarm, so it pays to understand what that is.

At Smith Partners Real Estate, we ask that a hard-wired alarm be fitted to all rental properties; due to the high chance of a tenant tampering with a removable battery powered alarm (9-volt battery powered alarms). In the case where a hard-wired smoke alarm cannot be fitted, then it is recommended that a 10-year lithium battery operated alarm be installed. This type of alarm is easily fitted, like a 9-volt type alarm, but the 10-year lithium alarm has a battery sealed inside that cannot be removed.

We regularly offer to all our Landlord’s to have a professional service check the smoke alarms and install new ones as required.

If anything you’ve read is of concern to you, or to learn more, call Smith Partners Real Estate on (08) 8251 3249 to have a chat with one of our friendly staff.

PART 5 OF 5: PREPARING YOUR HOME FOR SALE......

Tip 5: Styling & Presentation

Although it might not always be to your taste, a property with modern styling, will sell quickly and usually for top dollar.

Things to consider on the styling and presentation of your home:

-              a styled home creates excitement and an emotional attachment for buyers

-              the photography will look incredible and draw in more buyers

-              more buyers mean the odds of selling quickly and for top dollar are greatly increased

We recommend using the services of a professional home stylist, but for those who are a little creative and want to have a go, we have some tips from Interior Designer James Treble to help you get the perfect designer look for all your interior spaces. Source: https://www.homestolove.com.au/5-simple-home-styling-tips-to-remember-1772

1. SIZE DOES MATTER - When it comes to art, oversized pieces will always make a big statement. I suggest investing in one piece that you really love and placing it in a key position, like above the lounge or in a foyer, to set the stage for your home styling. A big piece of art means you don't need lots of other clutter in the room, as it remains the star of the space. Alternatively, a large piece of amazing fabric, framed or on a canvas, can work just as well.

2. POWER IN NUMBERS - Make a statement by grouping similar objects like vases, bottles or bowls together, so that they become a stronger design element as a whole than they would be individually. One of my tricks is to place three or five candlesticks (always odd numbers) of differing heights in one place. When lit, they become one large light feature, creating great ambience.

3. PRINTS AND PATTERNS - There are patterns everywhere in nature, like the bark of trees, or stones in a river. Natural patterns create interest, so why not use them inside as well? They don't have to be over the top either. A great way to add pattern is with cushions, throws and rugs, which can work together or independently to help you create the mood you want in your home.

4. GO GREEN - One of my favourite and most cost-effective ways to accessorise any room is to add some greenery; I love indoor plants and have one in nearly every room in my house. A great thing about indoor plants is that they help to blur the line between inside and out, making rooms feel larger and fresher at the same time. And you can easily enhance mood with an interesting basket or pot, chosen to work with the existing style of your interior.

5. LESS IS MORE - The term "less is more" means that having less of something makes a stronger – and more enjoyable – statement than overwhelming the senses with too much all at once. Strong colours or patterns, though amazing, create a better impact when used sparingly in interior design, than when lots of both are crammed together in one space. The same rule applies for mixing styles of furniture. Using mostly clean lines and neutral tones lets you add one outstanding piece. It can then sit comfortably, without competing with other pieces.

“Some people look for a beautiful place, others make a place beautiful” ~Hazrat Inayat Khan~

If you would like personalised advice on how to present your home for sale, simply click this link or email us

PART 4 OF 5: PREPARING YOUR HOME FOR SALE......

Tip 4: Furniture & Decluttering

When you are trying to sell your property, you want the home to look as spacious as possible. This means assessing how your furniture, collections and décor fit in to the space that you have.

Important things to take in to consideration when looking at each room:

-  is my furniture too big for this space?

-  do I have too many personal items on display?

-  should I just move everything out?

People often make the mistake of falling in love with a lounge or bed because of comfort or the way it looks, and when it’s actually in the property, we realise that it’s actually just a little too big for the space. Some of our tips:

Bedrooms - Things like large beds and bedside tables in small bedrooms makes the room look even smaller. Our suggestion is, get some small bedside tables (often this will be without drawers which is completely impractical for living, but necessary for sizing). If you can, in your master bedroom, we recommend putting your normal King or Queen bed into storage and hire or borrow a double bed which will create the impression of space. You can apply the same tips for the kids rooms if they have double beds, go back to single beds temporarily.

Lounge rooms – Oversized comfy sofa’s are great for the family lounging together, but when you’re looking to sell, if you have two lounge suites consider moving one of them into storage or if you have a couple of chairs in your set, put one or both of them in storage. Also, consider your coffee and/or side tables. Again, although it’s not practical for living, just for sale, either swap them for smaller one’s or remove altogether and place in storage.

Collections and personal items – You want your house to look like a home, so don’t remove all your personal items and collectibles, but perhaps halve them. It will make dusting before open inspections easier and the space will feel more open and cleaner with less items on each surface. We recommend that personal photos and valuables should be put away for open inspections.

Even if you have another house to move to, we don’t recommend just moving all your items out. Selling an empty house is not an easy task due to the following:

•  The marketing photography of a house full of empty rooms does not create any excitement in buyers looking for a new home. Think of the last time you looked at an empty property online. How quickly did you flick through the photos and how often did you ask, “what’s that room?”

•  When the buyers come to the open, they have a hard time determining how their furniture will fit in the space. The need to have some furniture there already as a point of reference and will often assume the worst eg. “this room’s definitely too small for our lounge suite”.

•  As with not removing too many of your personal/decorator items, you still want the house to feel like a home. An empty property feels abandoned and unloved, like the previous owner couldn’t wait to get out of there!

“Clearing clutter directs you towards paced progress…” ~Chayan Jain~

If you would like to see all our tips, please email info@spartners.com.au to request a copy of our Preparing Your Home For Sale booklet.