secrets of million dollar property investors

SECRETS OF MILL ION- D O L L A R -

PROPERTY INVESTORSA S S E T A G E N T S , A U S T R A L I A

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Landlord Report Reveals...

“SMART INSIDER SECRETS THAT HELP KEEP

MONEY IN YOUR POCKET WHILE PROTECTING

YOUR MOST PRECIOUS ASSET!”


Congratulations on requesting your

FREE “Property Investors Report:

How To Protect Your Most Precious

Asset While Growing It In This Current

Unpredictable Economy”.

This resource is going to be invaluable

to your success over the next 12

months, as it will leave you with advice

that will last a lifetime.

Its contents have been pulled from

years of solid industry experience. And

its sole purpose is to help you make,

and keep, as much money as you can

from your property investments.

This handbook has been broken down into 3 main sections...

Section 1: Protecting your precious investment - here you will discover

5 ways to minimize the risk of your

investment.

Section 2: Growing your investment - this section is all about easy, effective

and simple things that you must know

to grow your investment.

Section 3: Hot Questions - In this last

section I’ll cover the most commonly

asked questions I get from property

investors.

As you can see, there is a goldmine of

information here. If at any time while

reading this handbook you have any

questions, simply send me an email to

[email protected] and

I’ll be happy to help out.

To your investment success, Byron Miller

PS: Now, just to make things very

clear. I am not a lawyer. And I am not

allowed to give legal advice. All that I

am sharing on the pages that follow is

my understanding of the law. Before

you make any decisions, please seek

professional legal advice.

DEAR FELLOW PROPERTY INVESTOR,

I want to start with saying congratulations!




You spent months researching the

right area to invest in. Spent weeks

searching for the right property. And

you have invested tens of thousands,

if not hundreds of thousands of your

hard earned money into the deal.

So the last thing you want is to get the

stomach sinking phone call that your

property has been trashed, and that

insurance won’t cover it...

And that is exactly what this first section

of the Property Investors Handbook is

all about. Protecting your investment.

In this section you will learn about 5

key ways to safeguard your property.

These are...

• Understanding basic rental law

• The importance of correct insurance

• Why keeping zero vacancy’s is vital

• How regular inspections will save you thousands

So turn to the next page, and let’s get

straight into it.

UNDERSTANDING BASIC RENTAL LAW

It doesn’t matter if you are a brand

new property investor or if you have

been investing for years. It is essential

that you understand the basics of the

rental law.

So here is a quick overview of the law.

Both your rights as a landlord and also

the tenants’ rights.

The tenants have certain rights and

responsibilities during a tenancy

agreement which include:

• Paying rent on time

• Keeping the property clean, tidy and undamaged

• Keeping to the terms of your tenancy agreement

• Respecting your neighbours right to peace and quiet

While these might seem quite simple

it is essential that they be met at all

times.

If a tenant falls behind in their rent or

if they damage your property it can

cause a major

upset to the long-term value of your

investment.

Now your turn. Below are your rights

and obligations as a landlord:

• You must respect tenants privacy - If you need to enter the property for any reason, make sure you follow the correct procedure and lodge the right paper work. If you’re

Section 1:

PROTECTING YOUR INVESTMENT




not sure what this entails, ask your property manager.

• Carry out repairs and maintenance - It is your responsibility to keep the property well maintained.

• Meet all health and safety laws - This is essential. Whether it is rusty nails sticking up from the floorboard. Or possibly faulty wiring. It is your responsibility to make the property safe.

• Lodge the bond with the RTA - This helps with any disputes that may occur, and it is a legal requirement.

If you have any more in-depth

questions about the rental law, then

simply give us a call on 07 5315

5411 and we will happily clarify any

concerns you may have.

THE IMPORTANCE OF CORRECT INSURANCE

Owning your own investment property

can be as nerve racking as it is

rewarding. What if the tenants damage

your property? What if they pay rent

late? What if you can’t get tenants for

months on end?

Well that is why Landlord insurance is

so important.

There are many insurance products

out there that have been specifically

designed to protect you. They protect

you from risks caused by having

tenants in your property, which

mightn’t be covered by your ordinary

building insurance.

The best policies will eliminate almost

all of your risk as a landlord, and they

will ensure you sleep easy at night.

Here are some pointers to help you

choose a good policy. Look for the

ones that can protect against:

• Accidental damage to your building and contents caused by tenants

• Malicious damage to your building and contents caused by tenants

• Theft of building and contents items by your tenant

• Damage to contents from events including flood, storm and water damage.

• Damage caused by pets

Plus, you also want to have a look over

how they protect you in the case of lost

rent. Make sure your policy covers...

• Absconding tenants

• Evicted tenants

• Property becoming untenantable due to an insured event

• Prevention of access

• Hardship

• Re-letting expenses that exceed the tenant’s bond.

Lastly, make sure that you have

building, home and contents insurance

as well.

This will protect you against major

structural issues such as fire or flood

damage. If you pay body corporate

fees, then this is usually included.

WHY KEEPING ZERO VACANCIES IS VITAL

For the long-term success of your

investment property, it is vital that

your vacancies are kept as low as

possible. And ideally that you don’t

have vacancies.

There are 2 main reasons for this.

The first and most obvious reason is

lost rental income. For every week

that your property stay’s un-rented, it

is a large chunk of your yearly income

lost.

The second reason is to ensure you

get quality tenants.

When your property is vacant for

extended periods of time it is quite

tempting to compromise on the quality

of your tenants. It gets very tempting

to just “Get someone to pay the rent”

in order to cover your costs, but the

long term effects can be huge.

By being on the back foot, and

accepting someone whose not your

ideal tenant you can end up with all

sorts of problems.

From late rent payments right through

to damage to the property. Choosing

the wrong tenants can be very costly.

Our property manager have been

trained on how to keep your

vacancies as low as possible. Through

a combination of early advertising

and well-built systems, using an Asset

Agents property manager can save

you countless headaches and dollars.

To find out more, simply call us on

07 5315 5411.

HOW REGULAR INSPECTIONS WILL SAVE YOU THOUSANDS.

It is quite common for a property

manager to only inspect your property

once or twice a year. To most, it’s just

“Busy work”.They don’t get paid extra

for doing it, so most simply won’t.

But the thing is. If you let your property

go for 6-12 months without inspecting

it you might be in for a few nasty

surprises.

In fact, there are 3 reasons why

you need to inspect your property

regularly.

1. To keep the tenants on their toes - Most people keep a property

just clean enough to live in. But very

few will go over and above to ensure

that it is clean enough to prevent

premature aging. By doing regular

inspections your tenants will get in the

habit of doing the extra cleaning jobs

that will keep your property in good

condition for years to come.

2. Detect and damage before it gets bad - Has the tenant put a small

hole in the wall? Or perhaps they




have stained the carpet? If you catch

these while they are small damages

they are a lot easier to get fixed

rather than having to get the carpet

replaced.

3. You can keep an eye on aintenance - Over time there will be things that will simply wear out that you will need to replace. It could be leaky tap seals, loose doorknobs or fading paint. By inspecting regularly you can get these odd jobs done before they pile up.

We recommend that you get your

property inspected every 3 months.

This will give the tenant enough time

to feel like you aren’t intruding. And

it will be regularly enough for you to

keep an eye on your investment.

All of our property managers keep to a

strict inspection routine which ensures

that your property stays in good repair.

To find out more simply give us a call n

07 5315 5411.

When you first got into property

investment the goal was to make

money right?

Well did you know that there are many

small things that you can do in regards

to how you manage your property that

can help boost your results quickly?

In this section of your handbook,

we are going to explore what these

options are. As well as how you can

get them under way quickly. So let’s

get straight into it.

WHY YOU NEED A QUANTITY SURVEYOR:

Is part of your investing strategy to

claim property expenses against your

tax? If so, then what you’re about to

discover will excite you.

If you have not yet had your property

surveyed you would be missing out

on a substantial tax deduction on the

depreciation.

You see, the job of a quantity surveyor

is to go through your investment

property, and create a depreciation

schedule.

This is essentially a list of every item

in the house that will lose value over

time.

For example, each year you can

claim a percentage of the value of

all of the light switches, fans, aircon,

carpets, ovens etc as deprecation. If

you’re not too familiar, depreciation is

a “Noncash” expense. Which means

that it really only exists in your books,

it’s not money out of your pocket each

year.

Plus the cost to have a property

quantity surveyed will vary however it

is a tax deduction too. And whatever

the charge for the survey, you will

probably get that back plus more on

the first years tax deductions.

THE BENEFITS OF THE RIGHT ACCOUNTANT:

Many investors will get the same

accountant who does their income

tax to also look after their property. It’s

easy. You don’t need to find anyone

new. And besides, they do a good job

right? Wrong.

Not all accountants are equal. And

not every accountant specialises in

property. It’s actually surprising how

much money a property accountant

can save you on additional tax

deductions. Their knowledge on the

correct structure and what deductions

you should claim will easily cover their

expense.

Section 2:

GROWING YOUR INVESTMENT

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If you’re not sure which accountant

is suited to investment property, then

simply give us a call and we will put

you in touch with one in your local

area.

USING INTEREST RATES TO BOOST YOUR INCOME

Interest payments are the single

biggest expense you have as a

property investor. So it makes sense

to get them as low as possible.

Let me ask you a question. When was

the last time you called your bank and

asked for a decrease in the interest

rate you are paying? Even the smallest

decrease could save you hundreds of

dollars a year.

But in order to get the best deal, it

might be worth shopping around.

The loan market is always changing,

and you might be surprised how much

of a better deal you can get if you look

around.

The easiest way to do this is to get in

touch with a local mortgage broker.

They will do all the research and

shopping around for you. And the best

part, you don’t pay them a cent.

Another option is locking in a fixed

rate for 3 to 5 years. Today interest

rates are at an all time low, and it’s very

possible that they might start going up

again in the near future. So there has

never been a better time to lock in a

fixed rate.

Currently fixed rate are:

3 year fixed- 5.09%

5 year fixed - 5.69%

And if you even want to lock in a great

rate for 10 years, there are companies

that are doing this for only 6.69%!

HOW TO ADD AN EXTRA $780 A YEAR TO YOUR POCKET

EACH YEAR.

How often does your property

manager increase the weekly rent

on your property? Ideally they need

to be doing it every time the lease is

renewed.

Rent is constantly rising around the

country, so it is only fair that you take

your share of these increases.

How much to increase your rent by will

depend on the demand in your area

as well as other considerations such

as the condition of the property.

It is much smarter for you to increase

your rent by $10-$15 dollars each new

lease, rather than wait a few years and

get an $80 hike. Plus, by increasing

your rent by just $15 a week you will

get an easy extra $780 in your pocket.

To find out if the market in your local

area is strong enough to handle

frequent rent increases, simply give

me a call on 07 5315 5411.




RULES OF GARDEN MAINTENANCE

The first impression that your property

has is one of the most important

factors determining its value. So it is

essential that you fully understand

garden maintenance.

Now by law your tenants are

responsible for maintaining your

gardens. But if they are also paying

for water, it’s very unlikely that they will

water it and give it the attention that it

needs.

A scruffy, dry, un-maintained garden

will dramatically affect the appeal of

your property. And as a result it will

devalue and also affect your potential

rent.

Have a chat with your property

manager about what you expect and

what is realistic.

HERE ARE SOME HANDY HINTS TO HELP WITH YOUR

GARDEN MAINTENANCE:

• Supply basic tools - Most tenants won’t have a lawn mower, garden hose, or sprinklers. So invest a few hundred at Bunning’s to make sure they are equipped.

• Invest in an annual make over - It is smart to invest in a gardener once a year to go through and trim plants and re-mulch. This will give your gardens the best chance they have.

• If you have got large gardens - Consider having a regular gardener come and take care of them. You can even include this in the rent.

HOW MAINTAINING YOUR PROPERTY CAN BE WORTH

THOUSANDS TO YOU.

The quickest way to devalue your

property is to let it get in bad repair.

By simply missing a few small repair

jobs every few months, you will soon

end up with a bill of thousands. So it

certainly pays to stay on top of things.

Plus, if your tenants see that you are

happy to leave damage sit for months

on end, they will assume that you

don’t care much. And as a result, they

too will take less care of your property.

So when things break, get them fixed

straight away.

The tenants will expect it, and it will

encourage them to stay longer if you

look after the property.

And by doing small regular repairs you

will also be able to keep an eye on the

condition of the carpets, and when it

will need a new lick of paint.

HOW TO CHOOSE THE RIGHT TENANTS.

Choosing the right tenants is one of

the toughest jobs as a landlord. But it

is essential that you get it right.

The right tenants will look after your

property like it is their own. And the

wrong ones can ruin it, wearing things

much sooner than they should.

Although your property manager will

handle most of the tenant screening,

here is a short list of things to look for...

• Can they pay the rent? - Ask for copies of their pay stubs and call the employer directly to confirm their employment

• Run a credit check - See if they have a history of paying bills on time.

• Perform a rental background check - Use a reputable service such as TICA.com.au to find out if they have been blacklisted as a “Bad Tenant”

• Check out their rental history - Talk to at least 2 previous landlords. This will help you discover if they were problem tenants. If you just talk to their current landlord, they might hide the truth to get them off their hands.

• Do they have a consistent lifestyle? - You want tenants who will stay in one place, and one job for a long time. If they swap things up frequently, this might be bad news.

• Look for a maximum of two people per bedroom - Overcrowding your property can lead to increased wear and tear.

By following these few tips, and by

communicating with your property

manager you will dramatically increase

your chances of finding good, reliable

and trustworthy tenants.

WHY YEARLY VALUATIONS WILL FAST TRACK

YOUR SUCCESS.

When was the last time you got your

property re-valued? If it was more than

12 months ago, then you should get it

done soon here’s why...

By knowing what your property is

worth, and by tracking its increases in

value, you can more accurately plan

for your future. You can see when you

have new equity available which you

could use to buy another investment

property.

By rolling your equity into new

properties, you will create a snowball

effect. And in only a few years you

could turn your single property, into a

powerful portfolio.

Also ask your manager to supply you

with a Comparative Market Analysis

once a month. This will let you see

what other property’s similar to yours

are actually selling for at any point in

time.

HOW SMALL IMPROVEMENTS CAN BOOST

YOUR RETURN.

Every little improvement that you

make on your property can add up to

a nice boost in your return.




Small things like adding an air

conditioner can be affordable and

they will attract a better quality tenant.

In fact, you can even contact your

existing tenants and see if they will pay

an extra $10-20 a week if you install air

con. This can cover up to 40% of the

cost within the first year.

Even adding ceiling fans can help.

Extra bedrooms are like gold if you

can add them. And everyone loves an

additional carport.

All of these small improvements will

increase your rent as well as the

value of your property. Just make sure

whatever you get done gets added to

your quantity survey so you can claim

the right deductions.

If you want further advice on what

improvements are best suited to

your home, then give us a call on

07 5315 5411.

In this section you will find the

questions that we get asked the most

from property investors. So have a

read through, you might be surprised

how much you learn.

Q: What are the rules around pets?

A: A tenant may only keep pets n the

premises if the tenancy agreement

states that pets are allowed.

• It may also state the number and type of pets that may be kept and whether the pet can be kept inside or outside the house.

• You should think about whether the property has enough room, fencing etc for a pet and whether the pet could cause damage to the property e.g. screens or lawn damage.

• Flea spraying is required if pets are allowed. This should be stated on the tenancy agreement.

• A separate pet bond cannot be charged.

Q: Can i charge tenants for water?

A: You are allowed to pass on the full

water consumption charges (including

bulk water charges) to the tenants

provided all the minimum criteria have been met. Lessors can pass on full charges to tenants of:

• The rental premises are individually metered (or water is delivered by vehicle), and

• The rental premises are water efficient, and

• The tenancy agreement states that the tenant must pay for water consumption.

For more information, contact your

property manager.

Q: What happens if my tenant pays rent late?

A: It should be your property manager’s

policy to check rental arrears on a

daily basis. In accordance with the

Residential Tenancies & Rooming

Accommodation Act 2008, all tenants

over 3 days in arrears, should be

issued with a reminder letter.

This notice allows 7 days for payment

and you should be notified in writing

that this has occurred. Should the

tenant fail to rectify the outstanding

money, court proceedings should

then commence with your approval.

Q: Once my tenant has paid, how quickly can i receive the funds?

A: It’s common for most property

managers to pay you monthly either

on the 15th or 30th.

Section 3:

HOT QUESTIONS:




Q: How long will it take to find a tenant for my property?

A: This really depends on the

property manager. What you do need

to do is start to market for a tenant before you need one. Once someone suitable is found it’s not practical for him or her to move in that very day.

Q: What if i want to sell my property?

A: You may list your property for sale at any time, keeping in mind a fixed term lease is ongoing with the property. Should you require any assistance or would like to have a current market appraisal carried out please contact your property manager.

Q: Will the GST component of tax deductible expenses be allowed as a deduction?

A: Owners should seek qualified advice. Generally, however, the entire cost (including GST) will be allowed as a deduction for income tax purposes where you are not entitled to claim input tax credits.

Q: Do i have to insure the property or does the tenant do that?

A: As the owner, you are required to insure the building, contents (fixtures & fittings) and public liability. If the property is a Strata unit, the building insurance may be covered by the Body Corporate however, you should have contents insurance for the carpets, blinds, curtains, light fittings and any appliances inside the unit. Tenants are responsible for their own personal belongings but not for the landlord’s.

Q: Who is responsible for maintenance?

A: Under the Residential Tenancies & Rooming Accommodation Act 2008, the owner is responsible to ensure that the property is in a good and habitable condition and to keep all appliances

in good working order (e.g. hot water systems, stoves, air-conditioners etc) The tenant is responsible to maintain the property as it was at the commencement of this agreement and in accordance with the property condition report (fair wear and tear excepted).

FINAL WORD.

I hope that you have found this Handbook useful.

If for any reason you have any questions about anything property investing related,

please feel free to give one of our helpful Property Managers a call.

They have all got stacks of industry experience, so they can help you out.

Lastly. Thank for you the opportunity to help be a part of your property investing

success. I look forward to hearing from you soon,

All the best, Byron Miller

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Performance Minimum Standard

Answer emails By end of business day or if received late in day, at the beginning of the next day

Answer return phone calls By end of business day or if received late in day, at the beginning of the next day

Processing Applications for Tenancy Within 48 hours

Tenant Selection Personal interview with applicants to ensure suitability

Handling non urgent maintenance requests By end of business day or at beginning of next day

Handling emergency maintenance Immediately or within 1 hour (depending on priority). Client to be contacted immediately verbally or written

Bond Inspection after keys handed in Within 48 business hours

Refund of Rental Bond 3 business days unless there are outstanding issues to be resolved with the Tenant

Written rental appraisals Completed within 24 hours of request

Routine Inspections Minimum 3 per annum including documented suggestions for capital growth and income improvement (one page Property Improvement Report)

Inspection Report sent to Client Within 48 hours of inspection

Maintenance from Routine inspection Contractors arranged within 48 hours of instructions received

Rent Disbursement into Client account Within 3 business days of period end date

Account Statement Availability Online within 24 hours of Rent Disbursement

Annual Portfolio Review Within 10 business days of settlement anniversary date

If you you’re not convinced that we provided a superior level of service in the first 6 months we will return our service fees from that period back to you.

THE SECURITY OF A GUARANTEE

A management guarantee means that choosing your property manager involves no risk.

If the minimum performance standards outlined above are not being met by our property management team, you will receive one month free management service in the calendar month following the date of the written complaint. All complaints and disputes are to be in writing.


BRISBANE 07 3103 5616SUNSHINE COAST 07 5315 5411GOLD COAST 07 5551 0168SYDNEY 02 8004 3083FAX: 07 3041 0376WEB ADDRESS: www.assetagents.com.au

PREPARED ON 11/03/2014 BY ASSET AGENTS. © PROPERTY DATA SOLUTIONS PTY LTD 2014 (PRICEFINDER.COM.AU)

The materials provided are distributed as an information source only. © The State of Queensland (Dept. of Environment and Resource Management)

November/2014. Based on data provided with the permission of the Dept. of Environment and Resource Management: (QVAS) November/2014. The Dept. of Environment and Resource Management makes no representations or warranties about accuracy, reliability, completeness or suitability of the data for any particular purpose and disclaims all responsibility and all liability (including without limitation, liability in negligence) for all expenses, losses, damages (including indirect or consequential damage) and costs which might be incurred as a result of the data being inaccurate or incomplete in any way and for any reason.

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