Development

The most successful property investors have a number of tools in their landlord kit-bags.

One of the most important of them all is using professional property managers to do the heavy lifting for them.

That’s because, to create significant wealth, investors not only need to be strategic with their property purchases, they also need to hold for the long-term.

This involves not making silly mistakes that could have easily been avoided with the right guidance and education.

Here are 15 common mistakes that can ruin an investor’s wealth creation plan.

1. Not considering vacancy rates

Ignoring vacancy rates is always a bad idea, whether you are buying or already own a property in a particular location.

High vacancy rates means there is too much supply, which will drag down rents as well as yields – sometimes for years.

2. Not understanding demographics

One of the fundamentals that investors must understand before buying in a specific area are the demographics of the tenants (as well as the owner occupiers) in the area.

This means don’t buy a one-bedroom unit in a suburb that is popular with families who want to rent three-bedroom houses.

3. Not budgeting for maintenance

You must always treat your investment properties and your tenants with respect.

That means always budgeting for maintenance, because your investment is actually someone’s home.

4. Not listening to expert advice

Investors who engage property managers for their portfolios understand the importance of working with professionals.

However, when some investors choose to ignore that same expert’s advice, you have to wonder why they bothered at all?

Remember…if you’re the smartest person in your team, you’re in trouble.

5. Not knowing the market rent

Whether your investment property is currently tenanted or vacant, not knowing the market rent will likely cause you cash flow problems in the long run.

That’s because advertising it for a sky-high rent will see it sit empty and trying to increase the rent when the market is soft may motivate your tenants to move somewhere more affordable.

6. Not having fixed term leases

One of the myriad advantages of using property managers is the regular renewal of fixed term leases.

Having a tenancy agreement in place guarantees your income for the next six or 12 months, while periodic leases means the tenants can shift out with very little notice.

A good property manager will also ensure that your lease doesn’t expire at a time when it’s difficult to relet your property.

For example at Metropole Property Management we will often get tenants to sign a 13 month lease so their lease doesn’t expire over the Christmas holiday period.

7. Not using property managers

Worse than not listening to the advice or property managers is not using them at all.

Novice landlords think they are saving money by managing their property themselves.

In reality, it is likely to cost them far more in the long run because of their inexperience.

8. Not keeping your distance from tenants

Private landlords are also prone to treating their tenants as friends.

Of course, you should always treat tenants with respect, but it’s vital that the relationship is professional.

At the end of day, it should be a business relationship – with a property manager the intermediary.

9. Not having insurance

Similar to thinking that property management is not worth the expense, some landlords believe that insurance is not needed either.

Savvy investors, on the other hand, always have landlord insurance as well as the relevant building insurances to ensure their asset is always protected from damage.

10. Not treating property investment as a business

Far too many landlords adopt a set and forget mentality about their portfolios.

The most successful investors remain engaged, including regularly their portfolio’s and their property manager’s performance.

They do this because they treat it as a business not a hobby that “hopefully” will make some money someday.

11. Not having a depreciation schedule

Some landlords incorrectly believe that depreciation is only claimable on new property.

The truth of the matter most properties will likely have some depreciable items, which can be claimed at tax time.

Having a depreciation schedule prepared for each of your investment properties can save thousands of dollars in tax each year – regardless of the age of the property.

12. Not having interest-only loans

The days of working diligently our entire lives to pay off our mortgages and then retire are thankfully over.

Unfortunately, some landlords still adopt this mentality and have principal and interest loans on their properties.

As it’s only the interest component that is tax deductible, the best strategy is usually to have interest-only loans on investment properties.

This allows any extra cash flow to be used to grow your portfolio as well as maximising tax deductions.

13. Not using an accountant who understands property

Compared to two decades ago, property investment today is a profession in its own right.

These days, there are buyer’s agents and qualified property investment advisers but there are also specialist accountants and mortgage brokers.

Smart investors always work with property investment experts to help them achieve their financial and wealth creation goals.

14. Not increasing the rent regularly

The Holy Grail of property investing is long-term tenants who treat the property as their home.

However, too many landlords fall into the trap of “rewarding” this loyalty with abnormally low rent.

The best strategy is to make incremental, but reasonable increases, to the rent during the course of a long lease.

That way the tenant is happy and so is your cash flow.

15. Not holding for the long term

A combination of some these mistakes will often result in investors having to offload their properties early.

Unfortunately that usually happens at the worst possible time in the market and they have to sell for a loss.

Savvy investors, on the other hand, follow a proven strategy, that includes using professional property managers.

That way, they are able to grow their portfolios as well as hold them for the lengthy period of time it takes for true wealth to be created.

Clearly there are a number of different elements that create a successful property investment story.

Of course, selecting a property that has a proven history of outperforming the averages as well as the potential for future capital growth is one of the most important.

However, so is recognising the value of professional property management… and avoiding common landlord mistakes that can easily derail your plans.

This article is republished from propertyupdate.com.au under a Creative Commons license. Read the original article.

Education Minister Grace Grace has today announced ‘Foxwell State Secondary College’ as the official name of the new $64 million high school opening in Coomera in 2020.

Ms Grace said the name had been decided following extensive consultation with the local community.

“This state-of-the-art high school is located on Foxwell Road, which was named in honour of the Foxwell family who were important pioneers of the Coomera community, so it’s a fitting choice,” Ms Grace said.

“This is an exciting time for the Coomera community with the new school able to cater for up to 250 year 7 students in 2020.

“Stage One will include junior classrooms, a covered lunch area, sports centre and an oval.

“I’m looking forward to seeing the first students walk through the gates of Foxwell State Secondary College on day one of the 2020 school year.”

Foundation Principal Kym Amor said she was over the moon that the school now had an official title.

“I am very pleased to have found a name that has such widespread community support and that does not conflict with any other school names in Queensland,” Mrs Amor said.

“From face-to-face conversations to online engagement, the community’s involvement in this process has been an absolute stand out, and I am grateful for the support and enthusiasm.

“I believe the name accurately reflects the unique identity of the school while remaining respectful to the local community and location in which it stands.”

Mrs Amor said enrolments would open from the start of Term 3 (July 15).

“Now that we have an official name, we are able to move forward with designing uniforms, our logo, school colours, and many other pieces of the puzzle will start to fall into place.”

Ms Grace said contractor FK Gardner & Sons are making plenty of progress on the site.

“The ground floor concrete slabs have been poured for the admin and general learning buildings,” she said.

“Construction of level one of these buildings will start soon, as the main buildings start to visually come out of the ground.

“The construction of the school is supporting 170 local jobs which is great for the Gold Coast economy.”

Foxwell State Secondary College is one of eight new state schools opening across Queensland next year, including Fortitude Valley State Secondary College; new secondary schools at Calliope, Mango Hill, Yarrabilba and Ripley Valley; a new primary school in Ripley Valley and a new special school in Caboolture.

Queensland’s housing markets are expected to rank among the best performing across Australia during 2019 as they have the key factors that drive growth – liveability, affordability, booming infrastructure and enhanced economic prospects.

The Sunshine State leads the nation when it comes to confidence in residential property, as the gears shift from recovery to rising prices.

The NAB Residential Property Index recently tipped Queensland house prices will grow the fastest of the nation over the next two years.

The survey of more than 300 property professionals confirmed rising sentiment around the Queensland markets. And these property professionals also saw Queensland leading the way when it comes to rental growth.

South East Queensland is tipped to be the prime beneficiary of Sydney and Melbourne’s property slowdown, with the state possibly set to return to its place as Australia’s No 1 destination for interstate migration, as more families and downsizers from the southern cities cash-in for a lifestyle in the sun.

2018 saw strong price growth across Queensland, from suburbs of Brisbane to the coastal localities.

Economic growth and jobs now assisting the property market’s performance as Queensland emerges from the shadow of the mining downturn.

It is the value gap between the East coast capitals that makes the move compelling for many.

The value gap is the largest it has ever been between Brisbane and Melbourne and the largest in 15 years with Sydney, according to CoreLogic.

A typical house in Brisbane is around $393,000 cheaper than Sydney and $227,000 cheaper than Melbourne, with Brisbane’s median sitting at $542,000.

Observers suggest this affordability, coupled with positive economic signs, means Queensland is primed for future growth.

The increasing opportunity to work remotely, having set up a home business, or taking up a new job in Queensland is a do-able option.

Brisbane’s median house price sits at new highs, after posting a 2.3 percent increase in the September quarter, with the Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella saying the strength of growth proved that Queensland real estate was a good investment and could be relied upon to deliver capital growth.

“While other markets around the country are struggling in the face of tightened lending criteria and cooling investor appetite, the southeast corner of Queensland continues to deliver steady, sustainable growth,” Mercorella said.

“Queensland’s economy is proving itself to be a good performer, against a backdrop of national gloom, with new jobs bringing population growth and demand for housing.”

The REIQ found coastal Queensland locations ranking as the state’s strongest performers during 2018.

These included Mackay’s housing market which has come back from the mining downturn to post 5.6 percent annual growth in its median house price, according to the REIQ’s late 2018 figures.

“We are confident this growth can continue for the moment,” the REIQ advised.

The region has the lowest unemployment rate in the state at 3.3 percent, while the population is growing as jobs attract workers back to the region and the rental market is one of the tightest in the state with just 0.9 per cent vacancy.

With a $340,000 median house price, Mackay is still one of the most affordable coastal districts, with prices still at levels below the peak of the mining boom five years ago.

The tightening of bank lending standards has been seen across Queensland, as noted by the latest SEQ report by Ray White on house and land sales.

Despite this there has been an increase in house and land package prices, up 7.8 percent in Brisbane, up 5.05 percent on the Gold Coast sales and 4.99 percent on the Sunshine Coast where house and land package are a popular way to create a new start.

Estate agent John McGrath noted recently that Queensland’s top two regional performers were the Sunshine Coast and the Gold Coast due to rising demand from interstate home owners and investors.

One of McGrath’s pinpointed suburb’s to look out for in 2019 was Pimpama, in the northern part of the Gold Coast.

Pimpama recorded Queensland’s fastest population growth at 31 percent in FY17, with many enthusiastically buying or building brand new homes.

“Pimpama is affordable with a median house price of $475,000 and is located within the rapidly developing northern Gold Coast region along the M1 corridor,” McGrath said.

The $100 million Pimpama City Shopping Centre opened in 2018 and the $56 million Northern Gold Coast Sports and Community Precinct is set to open in 2020.

There’s also plans for a new train station to better connect Pimpama to Surfers Paradise.

The economic forecaster BIS Oxford Economics concluded Brisbane will lead the mainland capitals with price growth.

Source: www.propertyobserver.com.au

Gold Coast Airport has completed laying the concrete foundations for a new hotel at the site.

It involved the pouring of 2,050 cubic metres of concrete.

Queensland Airports Limited executive general manager, property and infrastructure Carl Bruhn said the 3,000 square metre concrete slab forms the foundations for a $50 million seven-storey, 192-room hotel.

The Rydges hotel will have a rooftop bar and views over Kirra Beach and across the runway.

It was expected to open in mid-2020.

It is being built by locally-based construction company, Condev, on behalf of developer, Trepang, a company associated with John Robinson and Nick Paspaley, who have developed hotels in Darwin, including two airport hotels.

Queensland Airport is the owner and operator of Gold Coast, Longreach, Mount Isa and Townsville airports.

Gold Coast Airport handled 6.52 million passengers in 2018, down from 6.5 million in 2017.

The airport’s master plan has forecast annual passenger numbers rising to 16.6 million by 2037.

In March, the airport appointed Lend Lease to build a new three-level terminal expected to be completed by mid-2021.

Source: www.propertyobserver.com.au