Steve (in his books) has stated using RE agents to manage your properties frees up your time, you don't want to be cleaning toilets, mowing lawns, etc. However I want to mention something my wife & I have discovered about RE agents the last few weeks.
Recently it became necessary for my wife & I to rent privately, having not done so for around 12 years. We have approached many RE agents in the Newcastle/Lake Macquarie/Maitland/Port Stephens area of NSW. Things certainly have changed. We've viewed and applied for many properties. I won't bore you with all our personal details. Suffice to say we are dream tenants.
Several weeks on, even though we have applied for many properties, we never hear back from agents. Yet we watch and wait as properties lie VACANT – for WEEKS – while the agents muck around, losing investors rental income. The MINIMUM time we have seen a property lie vacant is two weeks. The maximum (so far – and counting) is FOUR weeks!
I can't imagine what these supposed "investors" are thinking… forgoing up to one-twelfth (8.33%) of their yearly rental income every time there's a change in tenants!? I can't imagine they're finding bargains enough to offset that kind of loss. This has not been the exception to the rule either. We have seen it happen again and again with nearly all the RE agents we have dealt with in the above areas.
I read a rough estimate once (I believe it may have been in these forums, but not certain) you can expect to lose ~30% of rental income to management and expenses. If investors have to put up with the pathetic RE agents we've come across the last few weeks, I'd suggest it might be well worth giving them the boot, and taking up cleaning those toilets again. (Up to 30% of costs back into your pocket, plus 8.33% of income lost at every tenant change.)
Moral: Make sure you really DO choose your property manager wisely. Because most Newcastle "investors" certainly haven't. (And I won't even mention the quality of tenant they're choosing over us.)
Like any profession – there's good and bad ones.
I'm sure you make for a great candidate for a rental and I'm just thinking out loud here but not renting for the last 12 years may be having a negative effect because there's no reference point for the PM to check on your history. I could be wrong and the PM folk on the forum can correct me.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
We really don't know what their problem is. We are on Centrelink benefits, but we're far from the stereotype. (We have ~$300,000 in savings, which they know because it's one of the documents we use to provide identity points.)
With that kind of savings have you considered purchasing something? With a large deposit you would find your repayments wouldn’t be much more then your rent.
With $300k in the banks how do you still qualify for benefits?
Seek out private rentals eg gumtree
That is what I was thinking Scott. Don’t mind us working hard to dish out handouts to people that don’t need it. This infuriates me.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
We have indeed. But there's two obstacles. First, after costs, stamp duty, etc., we'll only have about $287,000 remaining. There's mostly only hovels here for that price. The second problem is time. Several RE agents told us they'd "definitely be able to help us." We asked them to be brutely honest – and they weren't. Now we have a week remaining, and of course, not many settlements can go through in that time anyway. It seems our only option for the time being is to purchase a caravan and head to a holiday park.
I wasn't even aware of that – thank you.
How do we still qualify for benefits? Beyond me. All I do know is, they assume you're earning x% (I think it's something like 4%) on any assets. Centrelink then deducts 50 cents for every dollar they estimate you're earning – whether you are earning anything or not. Payments continue to reduce until above a certain level of assets you get zero. BUT – if you buy a $2M PPoR – you suddenly qualify for full payments again, because your PPoR is not considered an asset!
But as for people being infuriated – hey, I didn't make the rules. I get infuriated myself sometimes. But would people rather I do as they think many on Centrelink do – blow it on ciggies, pokies, beer, drugs? Or would they rather what I do do… Save every spare cent, chase the best interest rate, look for investing opportunities – in order to get OFF Centrelink forever.
What does infuriate me is, the first group are derrided as bludgers (perhaps rightly so, but really, who knows) and told they should do this or that to get off benefits. But when someone finally does try and follow that very advice, they're still wrong.
Let me put it another way. I'll gladly trade my poor health, Centrelink benefits and even my $300k , for the life others have. In fact – you can have most of my wage too. I'd love a boring 5.5 days a week rat-race life, as long as I got to kick a ball, or play "horseys" with my kids on Sunday. Our eldest is 16. I got to do those things with him a few times. The youngest is aged 4, with whom I may never.
Sorry if this was not the spirit you intended.
Not sure about Newcastle but in Mount Isa there is actually a facebook group that is solely for the private sale and lease of properties in this town. Due to practically 0 rentals available through the realestate agent this facebook group has become very popular. Surely somewhere like Newcastle would have something similar and would be worth checking out.
Nathan what is the rental market like in Mount Isa at the moment ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard,
it is soo good for landlords at the moment! Not so good for tenants.
I wish I had 10 properties here now! There is just no vacancy at all.
i know a couple of people who are living in tents at the caravan park because they moved here for work without accommodation lined up, and even the tent sites were hard to get. A lot of people are starting to buy now since the uranium news so that could bring more rentals on the market…
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