Property Management Newsletter
RLA 150557
September 2019
Valuer-General’s figures show Adelaide house price holding strong as some suburbs record big growth
FIXED TERM OR PERIODIC LEASE, WHICH IS BEST? What is the difference between the two leases -
Adelaide house price values continue to hold their ground, despite making a small backwards step over the past quarter. Valuer-General’s figures for the June quarter show house values across metropolitan Adelaide are up 1.81% over the past 12 months to a median of $478,500, despite dipping slightly by 0.31% over the past three months. Statewide, the median house value held at $430,000 for the quarter, up 2.38% on the $420,000 recorded this time last year. Despite agents reporting state-wide stock shortages, there were more sales in the June quarter than the three months to March, with quarterly sales increasing. Of suburbs to have recorded at least 10 sales for the June quarter both this year and last — the greatest value growth is found in Rosewater, 12km northwest of the city, where house values are up by 34.29% to $423,000. Torrensville, 5km west of the city, recorded a 24.89% rise to $690,000, whilst values in the Hills hotspot of Aldgate, 18km from the city, are up 20.83% to $950,000, and in Burton, a suburb 22km north of Adelaide, rose 20.63% to $380,000. Unit values across metropolitan Adelaide dropped by 5.41% over the quarter, and are down 1.41% on this time last year. Despite the small 0.31% step backwards for the quarter, Adelaide’s minor market fluctuations are seen as ideal investment conditions for interstate buyers. Adelaide is considered the third most affordable city in which to purchase a house and the second cheapest to buy a unit. It is predicted Adelaide will experience modest price growth for the year ahead. Some information sourced The Advertiser 5/08/19
FIXED TERM - has a start and end date, usually 6 or 12 months. The lease is binding on all parties for the duration of the contract, unless mutually terminated. PERIODIC LEASE – has a start date but no end date. The lease continues indefinitely until lawfully terminated by either party. There are different rules for termination by a landlord and tenant. A landlord must give 60 days notice to terminate a lease with certain grounds (eg. They want to move in, demolish or renovate), or 90 days with no grounds. A tenant only has to give 21 days notice to terminate, and does not need to give any reason. The most common lease is fixed term, and the one we recommend to our landlords. The advantages are that it guarantees an income for a specified amount of time, and if the tenant breaks the lease by leaving before the end of the term you are entitled to break lease costs. You are also covered under landlord insurance for loss of rent in special circumstances such as tenant default, major property damage etc. The disadvantage is that you may be stuck with a difficult tenant, and you will have to wait until the end of the lease to be able to give notice to vacate and look for a new tenant. When it comes to a periodic lease the advantage is that you have more flexibility in terminating the lease, this works well if you are thinking of selling or moving back in. However, it does also give the tenant plenty of flexibility, they only have to give a maximum 21 days notice to end the lease at any time, so if the rental market is slow you may have a vacancy period. In our experience most good quality tenants prefer a fixed term to give them stability, those that prefer a periodic lease usually do so they can get out of the lease with short notice to move somewhere else. Of course the final choice as to what lease suits usually depends on circumstances, we suggest discussing with your property manager who can give you advice.
How To Think Like A Tenant When Investing In Property 30 day Snapshot
We have leased 17 properties The secret to successful property investing is being able to think like your tenant. If you’re a first-time investor, it’s easy to get seduced by beautiful homes or flashy features, while somehow overlooking the most important thing about a property: its value. Choose your location first
head and not your heart when it comes to investing in property.
A common mistake for first-time investors is deciding the type of property they want first, and then trying to source the location second. As an investment concentrate on a location you know is popular with renters – once you’ve found the right suburb then buy the best property you can comfortably afford in that suburb. Stick to the basics Some home features are consistently desired by renters everywhere, no matter where you buy – usually these are a good floor plan, good orientation, good light and period features. Avoid fad features First time investors should steer clear of paying extra for luxuries. While a pool, rooftop garden or tennis court might sound like an attractive selling point, it won’t necessarily increase the value of your property, or offer a better return on investment while it may suit you it may not suit everyone.
Anything else? Now you’ve got your tenant’s think-cap firmly on, what else do you need to consider as an investor?
We have had 890 property enquiries 815 with an average of 28 days on the market
Be clear on your investment strategy, and consider how long you hope to retain the investment property, and what you hope to achieve, such as supplementary income or a nest egg for retirement. This will influence the type of property you buy, and the type of loan you will get. When it comes time to borrow money, make sure you’ve done your research and budgeted carefully. Consider what deposit amount is required and any upfront or ongoing costs associated with the property purchase. Information sourced realestate.com.au
We have held 66 inspections with 462 prospective tenants through
Lease d
Stay close to what’s important Proximity to public transport, schools or universities and work prospects are all important lifestyle features for first-time investors. ‘You are not the market’
JUST LEASED 11 Tennyson Avenue | Plympton Park
Remember ‘you are not the target market’, so you shouldn’t discount a home simply because it’s not to your taste. It’s always better to think with your
Average rent $410 per week
Leased after first open for $485 per week
Gary J Smith Real Estate Property Management 403 Marion Road, Plympton SA | (08) 8297 9323 Note: The articles contained within this newsletter are intended as information and opinions only and readers should not rely solely on its content. Whilst every endeavor is made to ensure the content is current and accurate, readers should always seek their own independent professional advice before making decisions. If your property is listed or managed by another agent, please disregard this communication. | RLA 150557