Five Benefits of Choosing Planinsek Property to Manage Your Investment
Not all property managers are the same. By choosing Planinsek Property Group you can dramatically improve your bottom line and sleep easy.
Here are five of the things we do differently to most property managers to ensure you avoid all potential landlord fears and so you receive the maximum return from your investment property.
These routines and systems used to maximise your investment property return are explained so you can understand the difference between average and exceptional property management. Use these guidelines to help you choose the best manager for your property.
1. We Help You Reduce Mortgage Interest
We go to school to learn to work hard for money. I write books and create products that teach people how to have money work hard for them.
When you set up your mortgage loan you would have included an offset account for that loan. The banks charge interest on the amount owing on a daily basis. The balance on the loan is reduced by the amount sitting in the offset account. So as soon as you put rent or any spare cash into that account the daily interest amount owing is reduced and you save money.
Unfortunately the not so top property managers aren’t in a hurry to put your rent money into your offset account. I have been shocked to discover that some real estate agents only transfer the rental money to their landlords once a month. That means if your tenant paid their rent on the second day of that monthly cycle that rent money would stay in the real estate agent’s bank account until the first day of the next monthly cycle. You would have the missed the opportunity to lower your interest charge for 29 – 30 days.
Ah, you say. The real estate agent will be earning interest on that money. Not so. Rental monies have to be kept in a Trust Account and in most states the government receives that interest not the real estate agent.
So why don’t all agents pay the landlords as quickly as possible? Good question. Some think they are terrific because they pay twice a month! I do not think that is acceptable in this modern age.
Planinsek Property Group
We pay the landlords the same day the money is receipted into the Trust Account. The Trust Manager receipts all the rents in the morning, any maintenance, rates or other charges against the landlord’s account are paid then the balance is forwarded to the landlord the same day.
To me it just doesn’t make sense to do it once or twice a month. Not only is it not the best thing for the landlord it also puts undue stress on the office’s resources. I liken it to having all the maths teachers teach all the maths only on one day – what do they do the rest of the time? Our staff will be able to attend to tasks much more efficiently when landlord payments are spread across every business day of the month.
2. We Help Maximise Capital Growth
Capital is that part of wealth which is devoted to obtaining further wealth.
Capital growth is the increase in value from the date of purchase until the current time. Many factors contribute to capital growth. Supply and demand is a big factor in what determines the value of a property.
If there are several properties with basically the same features for example size of land, number of bedrooms then other features come into play in deciding which property may be more valuable.
A top property manager has an important part to play in ensuring that the property is well maintained. A Planinsek property manager will do more than just collect the rent and do routine inspections. He/she will discuss the overall upkeep of the property with the landlord so there is an agreed long-term maintenance plan agreed between them.
A Planinsek property manager will ensure that the landlord is aware of the value of a quantity surveyor’s report so that all depreciation allowances are recorded for a maximum tax benefit. This also alerts the landlord to the life span of chattels so that a plan can be devised for the refurbishment and replacement of things like carpets and painting at the property.
A Planinsek property manages ensures that all maintenance is carried out by fully qualified and insured tradespeople so there is not risk of work not meeting Australian standards or having negative consequences for the landlord or tenants.
A Planinsek property manager maintains good communication with landlords. Major maintenance should not come as a surprise to a landlord. If there has been good communication and trust between the landlord and manager then the landlord will have time to prepare for major expenditure.
A Planinsek manager does not avoid the hard conversations. It can be difficult explaining to a landlord that the law requires something to be done which the landlord may prefer to postpone. A Planinsek property manager knows how important it is to have the landlord act within the law and to keep his/her property in the best condition so that value is maintained.
A well-maintained property will increase in value more than a neglected property. It will also achieve higher rent and better tenants. A Planinsek property manager knows that the higher the rental returns the higher the value of the property.
3. We Achieve Top Rental Returns
Money is better than poverty, if only for financial reasons.
The amount of rent paid for a property is called the rental return. This figure is often quoted as a percentage. This percentage is calculated by dividing the annual rental return by the current value of the property and multiplying by 100. Sounds complicated?
Here is an example: The weekly rent is $300 therefore the annual rent is approximately $15,600. The property is currently worth $350,000 so 15600 divided by 350000 = 0.04714 multiplied by 100 = 4.71%. Take note that we are using the current value of the property not what you paid for it.
If property values take off quickly, i.e. rise in price the rental return percentage may drop because you can’t increase the rent every couple of months to keep up with the market as you would have a lease in place with the tenant.
A Planinsek property manager will keep an eye on the market and will ensure when the lease does need to be renewed that the appropriate increase in rental return is applied.
A Planinsek property manager will always look to increase the rent when the law allows. This can also work in the landlord’s favour for a while with a long-term tenant. At Planinsek Property Group, we often are achieving above market rents because we have increased the rent each year for a particular tenant and when they leave the rent has to be lowered to match the market conditions at the time.
A Planinsek property manager keeps the landlord informed of where the rental amount is compared to what is happening in the same area. There should be no surprises.
4. We Help with Taxation Matters
Success is doing ordinary things extraordinarily well.
A property manager at Planinsek Property Group knows that there are three streams of financial benefit that an investor can receive from an investment property. The taxation benefit is one of these.
From time to time the Australian Taxation Office chooses different categories of taxpayer to audit. Investors can be the target group.
A Planinsek property manager can certainly help the landlord with documentary evidence for both regular taxation returns and taxation audits.
A Planinsek property manager will advise their landlords of the benefits of the property manager paying all the expenses for the property. These then are recorded monthly on the rental statements and on the digital ledger kept in the office. This ensures that all expenses will be recorded throughout the year.
A Planinsek property manager will also be able to do an end of financial year report for each property and it will itemise all the expenses and income for the property. The expenses would be things like council and water rates, land tax, insurances, Owners Corporation/Body Corporate fees, property management costs, key costs and all maintenance and other services done at the property.
This also reduces the cost to the landlord. This report it will save the accountant and the landlord an enormous amount of time. No need to keep the receipts in a shoebox any more!
At Planinsek Property Group we have digital copies of all invoices and will be able to produce them whenever needed. And email them immediately. At Planinsek Property Group we know that paper copies are a thing of the distant past.
5. We Know the Optimum Rental Amount
An organisation’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage.
As the landlord you will probably have an amount in mind that you would like to achieve. If it is a newly purchased property you may be working on a certain percentage rental return, you may feel you ‘need’ a certain figure to cover your costs.
A Planinsek property manager will certainly take these things into account but they can only be a guide.
The truth is that the market dictates the rental amount. The factors, which contribute, are:
- How many similar properties are also on the market to rent in the area? That can change from suburb to suburb and week to week.
- How does the presentation of your property compare?
- What price are others asking?
- Do you have additional features –car parking, outdoor area, and extra bathroom?
- How does your property’s proximity to amenities such as shops and transport compare?
The Planinsek manager will discuss the above with you and suggest a starting asking price. A top property manager will closely monitor this amount and will always be aiming to achieve the highest rent that the market will pay at the time of vacancy.
When the property first goes to the market if there is absolutely no enquiry that usually indicates the price is too high. If there are inspections but no applications it usually means there still needs to be a slight adjustment.
At the end of the first week a top property manager will discuss adjusting the asking price. At Planinsek Property Group it has been our experience that a reduction of $10 per week can make a significant difference to the level of enquiry.
If the property has not been leased by the end of the second week a top property manager may suggest adding some incentives such as a week’s free rent. It is important to remember that it may be better financially to adjust the rent and have it leased rather than to be inflexible with the rental amount and have it vacant for an extended period.
Would you like this level of care for your investment property?
Contact Us Now to learn how we can help you get maximal performance from your investment.