Late Rent - Dealing with Arrears

So, you've done your homework, signed up a tenant and still found yourself in an unfortunate situation. From here on out, it is a process of damage control. It is highly likely you will lose money. The key to limiting your losses is speed. Act immediately.

• Tackle overdue rent immediately. A tenant should be two to four weeks in advance at all times.
  
  
• A bad tenant will make all types of excuses for not paying the rent. Do not accept any excuses except those that would genuinely affect their ability to pay. Compromises can be made for legitimate difficulties, particularly for tenants with a good track record.
  
  
• If rental arrears occur, take note of whether you had to call the tenant to chase the rent, or whether they notified you of their difficulties. The latter is usually a more positive sign.

Bad News Banks, New Online Tool Will Save Borrowers Money

MORTGAGE holders will be able to compare costs for switching banks with an online calculator launched by the Australian Securities and Investments Commission. 

The move comes ahead of a series of banking reforms that Treasurer Wayne Swan has promised will be released later this month.

ASIC launched the new tool which allows mortgage holders to assess whether changing mortgages will help them pay off their home loan faster and how long it will take them to get ahead after paying an exit fee to their previous financial institution.

A mortgage exit fee can be as high as $1000 and the cost has led to a brawl between banks and Mr Swan in recent months.

Last month ASIC changed the rules for banks, restricting them to charging exit fees that reflect the cost to them of closing a mortgage early.

Concerns had been raised that banks were charging excessive mortgage exit fees to stop people refinancing when they found a better deal.

ASIC chairman Tony D'Aloisio says the regulator has seen a sharp increase in the inquiries it has received about switching home loans in recent months as interest rates have risen.

"Recent interest rate rises have been hard on borrowers," he said. "Until now it's been difficult to work out whether another loan would leave you better off after all the exit and entry fees.

"Shopping around could save borrowers thousands of dollars in repayments.

"We've noticed a large spike in inquiries about bank switching and exit fees in the last couple of months."

Mr Swan said the calculator would help Australian families assess the savings they could make by switching to a more competitive offer.

"I've been working closely with our regulators for some time now to develop a package of new reforms to help build up more competition in the banking system, and I'll release those reforms this month," Mr Swan said.

The tool allows mortgage holders to input details of an existing loan, including the exit fee, and compare it with any new loan they are offered.

The calculator will then tell mortgage holders how long to wait before a cheaper loan will represent an overall saving after switching costs, which loan will be paid off faster and what can be saved in minimum monthly repayments.

Mr Swan is being pushed to withdraw the Government's deposit guarantee for the big banks and extend it for building societies and credit unions.

The controversial move is intended to divert billions into smaller lenders, enabling them to grow their mortgage businesses and provide a real alternative to the big four.

The idea has been put forward by Mark Bouris, head of Yellow Brick Road, the financial services company, in its submission to the Senate inquiry into banking competition.

Mr Bouris met with the Treasurer on Friday and afterwards Mr Swan told The Sunday Telegraph he admired Mr Bouris's business model and wanted to see more like it.

Yellow Brick Road has a partnership with Gateway Credit Union, which involves taking Gateway's funds, rebranding the money as Yellow Brick Road mortgages and distributing them through YBR's 45 branches.

Mr Swan is considering a variety of measures to increase the market share of mutuals.

Read more:
 http://www.news.com.au/money/banking/bad-news-banks-new-tool-will-save-borrowers/story-e6frfmcr-1225965747071#ixzz17VaLAXbZ

The Comfort Factor

Over the past few years our predictable Melbourne weather has been anything but predictable with drought turning to heavy rains followed by high humidity akin to Northern Queensland.  This has significantly changed the way prospective tenants prioritize their list of “must haves”.  

Air Conditioning is now high on their list of priorities, particularly at this time of year when Melbourne temperatures soar.  While you may not recoup the initial outlay for air conditioning immediately, as it does not increase the rental value significantly, it will certainly ensure the property is leased or re-let in a shorter time period of time thereby increasing the net return on investment.

With 2010 having just been declared the hottest year on record it may be time to consider your options regarding providing year round climate control.

Australia Moves to Melbourne's West

Australia’s fastest growing region is no longer the Gold Coast but rather Melbourne's West, a new study has found.

According to KPMG research, over the 12 months to June 2009 the municipalities of Wyndham and Melton faced a population boom with 18,000 new residents, exceeding the Gold Coast with 17,000.

KPMG demographer Bernard Salt said housing affordability had played a large part in the region's recent population boom.

“There are new house and land packages on the market in Werribee for less than $280,000, compared to Melton South where packages start at around $260,000," Mr Salt said.

In addition to the increased population, the West is projected to add 175,000 people and 82,000 dwellings throughout major growth areas of Werribee and Deer Park over the next decade.

“Population growth at this pace and scale means more demand for social infrastructure such as houses, shops, schools, roads, medical centres and sporting grounds," Mr Salt said.

article by Matthew Sullivan

Cleaning up a Rental Property

TIPS FOR GETTING A RENTAL BOND BACK

Cleaning your rental property up to a standard where you get your bond back can be a nightmare.  By separating your property into rooms and making a checklist of everything that requires cleaning, you can work through the house one room at a time in a systematic fashion, ensuring nothing is missed.  

All rooms will require that the windows are clean, skirting boards wiped down and a mop to the ceilings if they are marked.  If the carpets are showing signs of your stay it may pay to get a commercial carpet cleaner in.  Vacuum under any furniture left in the house and ensure all tiles and/or lino is clean.

Kitchen:

Probably the most time consuming room, start here while you are fresh.  Take particular care to clean:

• Oven
• Microwave
• Dishwasher
• Cupboards (in, under and on top of)
• Whiteware (inside and out, underneath)
• Sink

Little Change for Melbourne Renters

The metropolitan rental market continues to be in a state of imbalance, with vacancies more than outweighed by renters.

The rental vacancy rate for Melbourne in September was 1.4 per cent, a minor reduction compared to June when it was 1.5 per cent.

In the inner city the vacancy rate improved from 1.1 to 1.4 per cent; in the middle suburbs it reduced from two per cent to 1.8 per cent; and the outer suburbs retained the tightest rental market, with a 0.7 per cent rental vacancy rate compared to 0.8 per cent in June.

The lack of available rental homes continues to drive increases in rents. According to the Office of Housing, the rent for a three-bedroom home has, depending on the location, increased by between 3.9 and 11 per cent over the last year. The comparative figure for a two-bedroom unit or apartment is a rise of between 3.1 and 8.3 per cent.

There continues to be no improvement possible in the short- to medium-term.

Conditions in the regional Victoria rental market was very similar to the metropolitan one, with a rental vacancy rate of 0.7 per cent in September compared to one per cent in June.

The Bendigo region continues to have the lowest level of available rental homes, with a vacancy rate of 0.2 per cent compared to 0.4 in June. In the Geelong region it dropped from 1.3 per cent in June to 0.9 per cent in September and in the Ballarat region there was a small improvement from one to 1.2 per cent.

 

Source: http://www.reiv.com.au

Melbourne Property Manager Guarantee Shows True Committment

True Property Management understand that you need to have complete confidence in your Property Manager.  To show our commitment we offer a No Strings Attached, Money Back Guarantee.

If you are not fully satisfied with the service you receive during the first three months of True leasing and managing your property due to any of the following assurances not being realized, all management fees and leasing charges made by True during the period of management will be repaid to you in full.

Our confidence in the quality of service we provide allows us to offer this additional security to all new clients.

The only thing we ask is that if you believe we have not acted in accordance with our assurances, you advise us and allow us the opportunity to remedy the situation.

Visit us for a full list of client assurances established by the True Team as the 'bare minimum' service levels.  Assurances cover the following areas of your Property Management:

• Marketing
• Leasing
• Lease Renewal
• Property Inspections
• Rent Collection
• Rent Processing and Accounting
• Repairs and Maintenance
• Communication

TIP: Victoria tenants can also view information and fact sheets regarding your rights on a wide range of tenancy matters at http://www.tuv.org.au/publications.

Complete Rental Guide

The Consumer Affairs, Victoria have an online version of their Complete Renting Guide available.

This includes tips and information both tenants and landlords need to be familiar with.  The following two excerpts are from this Guide:

Steps you can take to have an urgent item repaired

• Speak with your landlord about whether your repair is urgent. If you request urgent repairs, the landlord or agent must respond without delay.
• If a repair is urgent and you are not getting a prompt response from your landlord or agent, you can authorise the repair for up to $1000.
• You can then give your landlord or agent a notice asking that they pay you back for the cost of the urgent repairs. Your landlord or agent has 14 days to pay from the date they receive the notice.
• If the landlord or agent does not complete the urgent repairs and they are going to cost more than $1000, or you cannot afford to pay for them, you can apply to VCAT, which will hear the application within two business days. VCAT can order the landlord or agent to arrange the repairs.

Agreeing to end a tenancy early

• You and your landlord can agree to end the tenancy early.
• It is important to put the decision in writing.
• This written notice should include any agreed costs, terms and conditions, and the date the tenancy is to end.
• If you have a fixed-term agreement but need to end your lease early, you should give written notice as soon as possible that you are leaving. Breaking a tenancy agreement may require you to pay compensation to your landlord.
• Either party can apply to the Victorian Civil and Administrative Tribunal (VCAT) to end a tenancy early on the basis of hardship.

Alternatively, feel free to contact us at True Property if you have any questions or concerns.

Property Management Checklist

If you are shopping around for a property manager for your investment property, it is important that you know what quality and range of services you are paying for.

Not all property managers are the same.

In order that you make an informed decision, ask the following questions of the agency you are considering for the job of managing your property.

Property Leasing

1. On average, how many properties does the agency lease each month?
2. What human resources has the agency allocated to leasing properties?
3. Do the agency staff members personally show prospective tenants through properties?
4. How does the agency market available properties for lease?
5. How much information is obtained from applicants for properties and what information is verified?

Property Management

1. What documented systems are in place for property management?
2. What is your process for dealing with rent arrears?
3. What is your process for dealing with repairs and maintenance?
4. What steps do you take to ensure that all contractors working on my property are properly licensed and insured?
5. What steps do you take to ensure that all maintenance work on my property is competitively priced?
6. How frequently will you inspect my property?
7. What is the experience level of the staff members who will be leasing and managing my property?
8. How much training have they had?
9. How frequently will you account to me for rent monies collected on by behalf?
10. Can you send me rent statements by email and deposit my money in my bank account electronically? Yes/No

Customer Service

1. What references do you have from satisfied clients?
2. Do you provide a service guarantee? Yes/No
3. Does the agency have documented service standards? Yes/No
4. What back up staff are there in the event my property manager is sick or on holidays?
5. How frequently will you communicate with me and what form will it take? 

More tips for investors and owners can be found at True Property Management's (Victoria) website.

Contentious Late Rent Issue under Victoria Legislation

When a tenant signs a Residential Tenancy Agreement they agree to pay the rent in full fortnightly or monthly in advance.  However, in reality, no action can be taken by the property owner or their agent until the rent remains unpaid for more than fourteen day other than constant reminders usually by sms, phone calls, emails and normal mail.

A Notice to Vacate can be served upon the tenant on the fifteenth day allowing them another fourteen days to pay the outstanding rent or vacate the property.  Here lies the trap; should the tenant decide to vacate within this time period and pay rental up to date they vacate, the Fixed Term Agreement is negated and no further action can be taken against the tenant unless the property is left in disrepair.  This long standing loop-hole in the legislation allows savvy tenants to renege on their obligations under a Fixed Term Tenancy Agreement without penalty.

This further emphasizes the need for comprehensive Landlord insurance as a representative from EBM Insurance confirmed that this would be covered as a lease break.  This is subject to the policy being in place prior to the tenant falling into arrears, a current tenancy agreement and a bond held by the Residential Tenancies Bond Authority.