Monthly Archives: November 2015
Before you go on holiday, it’s a good idea to take some time to protect one of your most valuable assets, your investment property. Make sure you’ve checked off the following points, so everything runs smoothly while you’re enjoying your break. Remember, these points apply at any time of the year if you plan on going away, not just at Christmas.
Contact your property manager
Let your property manager know you are going away and for how long. In New Zealand, if you are going to be out of the country for more than 21 consecutive days, you must have an appointed property manager by law.
If you don’t reside in New Zealand and currently don’t have a property manager, it might be a good idea to look into having one before going on an extended holiday. This way, your tenants will have a point of contact if they have any concerns or issues, you’ll have a dedicated person to watch over your property whilst your away, and you’ll have peace of mind as you take a break from the management of your investment.
Update your contact details
Ensure your property manager has a way to contact you during the holiday break. This is a good time to make sure that all your contact details, including mobile phone number and email, are up to date.
If you’re overseas and not contactable on your regular number, make sure your property manager knows your alternative contact details for the duration of your trip.
Work with your property manager to answer any urgent queries
Make sure there are no outstanding issues or requests sitting with you before you go. Your tenant may have reported a repair that’s needed or made a request that’s still pending.
Make sure you give your property manager an update or answer to any queries that are still outstanding before you leave. Even if it’s just to advise that you will be able to make a decision when you return. This just gives your property manager the ability to keep your tenant in the loop whilst you enjoy your break.
Appoint an emergency contact
If you do not wish to be contacted during your holiday, appoint an emergency contact who can make any essential decisions in your absence.
Make sure your insurance is up to date
Now is a good time to ensure the insurance you have for your investment property is up to date. This could include landlord’s insurance, public liability insurance and house insurance. This is particularly important during the holiday season when your tenants may have guests staying or if your tenants themselves are planning to be away and your house is left empty.
Unfortunately, holiday periods tend to be a time when the most burglaries occur, so you want to be sure that any damage your property may sustain as a result is covered by insurance.
By keeping your property manager up to date and checking on a few essentials before you leave, you can ensure you have a relaxing break with no hassles relating to your investment property whilst your away.
Whether you’re holidaying on the other side of the world or simply at the beach down the road, if you’re leaving your home for the annual summer break, it can mean there is an increased risk your home will become a target for thieves.
The good news is, there are a few tips and tricks you can use which can make a huge difference in protecting your most valuable asset and safeguarding your home against thieves this summer holiday season:
Double check the locks
Check your homes existing locks and if necessary refit new ones, such as deadlocks and bolts, on doors and windows. Many homes have locks on windows that generally share the one key, so it’s a good idea to keep this key in a safe location (or even with you) whilst you’re on holiday.
Make a list of valuables
Keep an up-to-date list of any valuables such as jewellery, antiques, electronics and artwork. Take a photo of each item to keep on file and ensure your insurance company also has a copy. This will make the claim process much easier if something were to happen.
Keep keys in a safe place
Don’t leave house keys hidden outside, as experienced thieves will know where to look. Instead, leave a set of keys with trusted neighbours or friends or take them with you.
Survey outdoor objects
Lock away garden tools and ladders as they could potentially help a would-be thief to gain access to your home.
Let in the light
Use automatic timer switches for lamps, TVs or stereos to come on then turn off each night. This will give the illusion that someone is occupying your home and will deter potential thieves. Outdoor sensor lights are also a good idea not only to deter intruders but to help alert neighbours to someone’s presence around your home.
Clear the letterbox
Arrange to have you letterbox emptied daily. Nothing is a bigger signal to thieves than an overflowing letterbox, or newspapers piling up on the lawn. It may be a good idea to have your newspaper subscription paused or diverted to another address for the duration of your holiday.
For longer holiday breaks, arrange to have the lawn mown and the house aired with windows opened occasionally (whilst someone is at the house), so it’s apparent someone is either living in or visiting the home regularly.
Be social media savvy
Don’t leave a message on your phone indicating that you are away and be careful to mention the duration of your trip on social media. Recent research has shown that thieves canvas social media to try and identify people who may be away and to locate their address. Alternatively, ensure you have strict privacy settings on your social media profiles.
Have someone stay
If possible, ask a trusted friend or family member to be your house sitter.
What is the value in listing your house for auction?
Fewer days on market and a higher rate of success
When it comes the question, “Why auction a home over a traditional sale?”, you can’t look past the facts. Currently in the past 12 months in the USA, Harcourts have seen just over a 90% success rate selling properties through auction. When you look at traditionally selling your home in Southern California you have under 50% chance of getting a result, which makes auction a logical option.
You can also look at the average days on market and compare auction and traditional sale. Obviously this can change from place to place, however if you look at the average days on market for a traditional sale in California over the past few years it has varied from 90-150+ days. Our auction platform has an average of just 33 days on the market which allows everyone involved to understand the true market value in a shorter timeframe.
This is paramount when selling real estate because we often hear from sellers that they don’t have to sell. Taking this approach when listing a property on the market is one of the main reason that sellers do not achieve what they want for their home; they sit and wait, then drop the price, which then becomes a game of chasing the market down.
Auctions allow you to negotiate up, rather than down
Another reason that auctions make a lot of sense is that it allows the agent that listed the property to negotiate up rather than negotiate down like a traditional sale. For example if you were to price a property in a traditional manner at $850,000 you have straight away told people what they are not going to pay. In most cases you would see someone submit an offer well below the asking price and it becomes a negotiation.
When a home is listed through the Harcourts auctions platform we list the property at a bidding-to-start-from price. This price is well below market value and below the seller expectation for the home, however the seller sets a non-disclosed reserve price which safe-guards them and allows us to find out how high the market will go. Think about it like a negotiation up rather than a negotiation down.
Selling through auction will help you to achieve true market value
Another query which we come across often is, “The last agent told me I could get a certain dollar figure”. We call it the promise of a price. When a home goes through our auction platform it is not the promise of a price, it is a process that finds the true market value of that home through feedback and offers that are not influenced by a listed price.
The process gives us a plan A, B and C in that we can sell a property before auction, on the day of auction and also if all else fails we can always revert back to the traditional sale so you have nothing to lose. In fact, you can gain the knowledge needed to price the home accurately to achieve a sale in any event.
A set timeframe drives buyers to make a decision
An easy way to think about the structure of the auction platform is to think of the timeframe between Thanksgiving and Christmas. We have a four week lead-up where people go crazy getting everything ready for one day, having that set date does not allow us to procrastinate, it drives us to make decisions. This is the same principal we employ to get a property sold in the shortest time for the true market value.
Aren’t auctions traditionally for properties which have foreclosed?
The banks still use auction as their primary way to sell foreclosed homes. This is because auction is the only proven way to get the highest price for a property in the shortest timeframe.
This perception can actually work to your advantage
We use the perception of the word ‘auction’ to drive over 45% more people through the front door of a home than we would see with a traditional sale. We get some many more people interested in a property that is going to auction – have you ever met a buyer who wants to pay too much? Getting the buyer to the front door is the hardest part of selling real estate.
It is a very common misconception in real estate that an agent sells your home, when in fact we could not sell a property to someone who did not want it.
It’s our jobs as agents to manage buyer and seller expectations
After thousands of transactions, we have identified that it is our job as listing agents to manage greed on behalf of the buyers and fear on behalf of the sellers. Greed on behalf of the buyers because I have never met a buyer that wants to pay too much and fear on behalf of the sellers because I have never met a seller that was not fearful of leaving money on the table.
Now, as contradicting as it may sound we need to feed the greed of buyers to get them to the front door, so the word auction feeds the greed but then the process manages that greed with our set timeframes and the competition of the other buyers. All the while providing the seller with the information and feedback they need to understand about the true market value of their home is. So in short, we use the stigma that surrounds the word auction to get the volume of people we need.
What kind of success have past clients had using the auction process?
We are very proud of all we have achieved with our auction platform, as over 60% of all our properties that have sold through our process have previously been listed on the market for an extended period of time. To have over a 90% success rate while listing properties where we needed to revitalize the reputation because other agents had promised a price and not a process.
One particular story really does put our platform into perspective. A broker from a real estate office outside Harcourts had his own property listed for almost two years and could not sell it. He had reduced the price several times and had still not been able to get the traffic needed but also lacked the leverage in any of his negotiations, as he could not get people to make a decision.
He saw one of our auctions and saw the property sell in a short timeframe for a great price in the local area where he worked and called us to talk further. We listed the home as an auction and had it sold in two weeks at a price which was higher than previously advertised.
The power of the set auction date drove a buyer to pay more so they could avoid being in competition on auction day.
If you’d like to consider selling your home through the auction process, and live in California, Nevada or Oregon, get in contact with Harcourts Brady & Co Auctions Manager, Ben Brady at firstname.lastname@example.org
Helena Fantela, Harcourts North Geelong, Victoria, Lorenne Lovell, Harcourts Huon, Tasmania and Sarah Street, Harcourts Burnie, Tasmania all sat on our panel at the Harcourts Australian National Conference and shared with us the basics of Property Management, their coping strategies, growth strategies and some of the best systems to ensure you stay at the top of the game. Here are some of the highlights that will help any property manager in any Harcourts office in the world!
Helena, you’ve had a huge shift in mindset around arrears. Two years ago your arrears consistently sat at approximately 7–8%. Now your arrears are consistently sitting at around 1%. What are the key changes you made in the department that have resulted in this achievement?
Staff. We identified some staff who had a negative attitude around our ability to get the award winning results that we are achieving currently. Those staff have left and been replaced with a team of motivated individuals who have a ‘can do’ attitude.
Sign-up process. We have a very detailed sign-up process and part of that is a strong emphasis on the importance of paying rent on time. We have an arrears policy that the tenant is given which outlines a strict policy and firm action on arrears. We also provide our tenants with a 12 month calendar that has their rent due date highlighted.
Competition on PM’s ranking. Our team is motivated to win awards and we have competition within the office to see who ranks the best for overall for arrears each month.
Different tools. We don’t rely on one method to chase rent. We use multiple tools including SMS, email, phone, door knocks.
How structured are your systems and procedures? How have they developed, changed, and improved over the years?
We have really got the team involved in writing our procedures manual. We’ve updated our manual by picking specific topics and then at our meeting each week we review each system and procedure, look at how everyone is handling different tasks, picking the best parts of everyone’s procedures and then as a team coming up with the best system for our office moving forward. Unified agreement has given us the best result and really improved the department. The manual outlines relevant checklist, letters and forms that should be used each step of the way.
You consistently list more than 10 new managements per month, can you share your appraisal and listing process and highlight what you think makes you stand out?
When clients first enquire I provide them with a personalised detailed prospectus outlining all the services that we offer. When I attend the property I take with me current and relevant reports from CoreLogic RP Data and our Harcourts database. I ensure that I am always up to date with our business partner’s ad on products such as Rental Protect Plus landlord insurance and Real Property Matters tax depreciation information, so that I can add value and offer a complete range of investment property services on top of our outstanding property management service.
On top of this we offer great referral bonuses to our staff, clients and the public and sharing our office’s award winning stats of how we manage low rent arrears and vacancy rates. Our biggest point of difference in Tasmania is Harcourts state-wide market share of 1 in 3 rental managements.
A common frustration for many landlords is accidental damage which can occur at their investment properties. Whilst accidental damage is something your property manager will deal with swiftly on your behalf, normal wear and tear is a bit different. Here, we explain the ins and outs of both.
The reality is that wear and tear on a rental property will occur over time
The first thing to be aware of as a landlord is that normal or a reasonable amount of wear and tear is acceptable at a rental property, so it’s important to have realistic expectations. Rental properties won’t remain in exactly the same condition at the end of a lease as when the tenants first moved in.
While tailored landlord insurance may cover claims for accidental damage, wear and tear is generally excluded and cannot be claimed.
So, what is considered accidental damage?
Accidental damage is defined as being caused by a sudden and unexpected event. This might include spilling red wine on the carpet or a window breaking. If you have landlord’s insurance, this is the kind of damage that a claim can usually be made against, alternatively, it may be the tenant’s responsibility to fix.
What is considered normal wear and tear?
In contrast, wear and tear accumulates over time. Using the carpet example, depending on the product’s quality, its life span could be five to seven years. This means if a tenant has been in the property for a number of years, you can expect there to be signs of foot traffic and flattened or bare patches.
In insurance terms the carpet has not been damaged accidentally or maliciously, but may be in a reasonable condition given the tenant’s time in the property. This wear and tear cannot be claimed on insurance and should be expected as part of owning an investment property.
One of the main reasons landlords confuse wear and tear for accidental damage is because after leasing their property they often don’t see it again until the end of the rental agreement.
This is why it is important for property managers to carry out regular inspections and advise landlords on the property’s upkeep. If you are not currently receiving regular updates on the upkeep of your investment property, you should bring this up with your property manager.
Regular inspection reports form part of good property management, and a good inspection report to a landlord will include some photos so that there is a visible image of the property during the time of tenancy, including images of any damage observed at the property.
Handy Guide: Accidental Damage versus Wear and Tear
Examples of accidental damage:
- Any permanent staining of carpet
- Hole in the wall caused by tenant
- Cracked floor tiles caused by tenant
- Shattered windows or built-in mirrors
Examples of wear and tear:
- Foot traffic marks on carpets
- Scuff marks on floor coverings
- Dirty hand marks on curtains/blinds
- Grease accumulated in the stove range hood filter