Brisbane landlords

New to property investing? Here’s 5 things you really should consider

So you’ve decided to enter the Brisbane market, taking your first step into property investing? No doubt you have a favourite suburb or two and have sorted the finance. You’ve worked out what to buy and done your homework on what tenants really want and will pay more rent to have.

But here’s some of the other (hugely important) things you really need to consider before you sign that contract!

1. If there’s tenants in the property they, and their current tenancy agreement, come with the title. We sometimes have new investors asking for an immediate change in rent and other terms of an existing tenancy, but you’re actually required to issue current tenants a Notice of Attornment at settlement and maintain the current relationship.  Rent cannot be changed until any fixed term expiry (and then with a minimum 60 days notice). If the property is furnished for example, you must keep it furnished and maintain the current inclusions. Once the fixed term tenancy is concluded you can then consider whether to continue offering it as a furnished property.

We rarely hear investors ask for a copy of the current tenancy agreement but this is important reading for you. Is their term periodic with no fixed term, for example? Once the new rental laws take effect (expected in the next few months) you will have limited options to ask that tenant to leave.

2. If you’re buying a vacant property you have the flexibility to set the rent and your tenant offering exactly as you’d like it. But remember each day vacant is lost income, so here’s 3 suggested requests to make of the seller in your purchase negotiations. These will cost them very little but really help you minimise your down time:

a) Hand over a copy of the professional photography and floorplans used to market the property for sale. Your property manager can get your ads up straight away.
b) Allow viewings by prospective tenants once the sale is unconditional. Ideally you’ll then have a tenant ready to move in the day after settlement – or even before (more complicated but we’ve done this before).
c) Have the property cleaned to a prescribed standard upon settlement. You’ll need this done before your tenants move in if you want to start the property’s rental life in the best possible condition.

3. You can choose whoever you like to manage the property! Investors sometimes think they need to leave the property with the current agent but this is simply not the case. We regularly take on rented properties from other agents and the transition for current tenants is seamless. And an onsite manager in an apartment building is its caretaker, but not always an experienced or capable property manager. You should choose the agent you feel can best work for you as the landlord. (And we’d love to be considered!)

4. Know your accurate market rent. Now and always! We don’t mean to sound unkind, but salespeople can sometimes be… optimistic with their rent estimates, especially for vacant property. Your best approach is to ask for written rental appraisals from the people who’ll actually need to find you a tenant – the leasing and property management team you intend to use! Rents are lifting in Brisbane so they might still be slightly ‘forward looking’. If the author knows you’ll be looking to them to achieve the result they’ll be more considered in their estimate.

Our team can do a rental appraisal for you in just a few minutes, using the info in the online sales ad. Just call Ann-Marie on 07 3214 6899 or email ncm@beesnees.com.au

And don’t assume a current tenant in the property is paying market rent. Often a landlord will keep rent increases to a minimum for long term and happy tenants, so it’s quite common for the market to overshoot. Our Bees Nees leasing team recently achieved a $170 increase on a CBD apartment where a long term tenant had vacated. At all times in your ownership you should have a good handle on whether your rent is in line with market.

5. Don’t forget your depreciation schedule! Prepared by a quantity surveyor and an essential document for your ongoing investment. Chat with your accountant for the details, but we say maximising your deductions is just as  important as sourcing the best interest rate for your loan. Experienced investors can offer lots of tax tips – there’s thousands of dollars involved for most landlords.

Like to see and hear more about Brisbane property investment for beginners? Read on or here’s a 40 minute webinar we recorded last year, chatting through lots of topics including financing and finding your property and maximising its rental returns.

PS: There’s lot of people encouraging you to invest in property, but here’s some more reading about some of the challenges and risks. These don’t get a lot of airplay amongst real estate agents!

PPS: We’re property managers/real estate agents and not tax accountants, financial advisers or lawyers. If you’re considering property investment please seek the expertise of these professionals.