Time for a property review?

Time for a property review?
A
s the winterish weather sets in, it’s an
opportune time to find some rewarding
indoor activities to kill time. What’s
more rewarding than reviewing your property
portfolio
before spring
arrives! It feels
much better
playing the real
Monopoly than
just the board
game alone.
We all have
different
reasons why
Stephen Tsang, Partner Withers Tsang
we invest.
But I believe
the baseline
fundamentals are similar. Here’s my list of
fundamentals that require regular reviews.
Where are you at?
• Does the investment property still suit your
current circumstances?
• Are you going overseas to work or live for
the foreseeable future?
• Are you planning to retire in the next few
years?
• Has your personal income changed so that
you now have more options to buy or to sell?
fixed rates loans, then you should compile
a detailed schedule noting down the
outstanding loan principal, interest rate and
maturing date.
Does the property still fit your
current investment objective?
• Check with the banks whether there are any
break fees or penalties if you were to repay
a fixed rate loan now (note: Different banks
have different interpretations and rules. You
cannot assume there will be no break cost
just because the current rate is higher than
your fixed rate.)
• Are you happy with the current yield (yield
= annual rent received divide by the current
market value)?
• Should you start preparing the property for
sale in time for the usual spring and summer
craze?
• Should you buy more properties now?
• Maybe it’s time to have a coffee with your
banker or mortgage broker to discuss all
the above and evaluate the pros and cons of
different options
What’s the number?
• Everyone talks about the property prices
going through the roof now… so “what’s
your number?” Do you even know?
Talk to your team
• When did you last have a coffee with your
property manager to discuss and review the
tenancies and current market rent?
• Is it time to get an updated registered
valuation now or do I wait for the 2014
Quotable Value?
• If you were to sell the properties, how much
tax you have to pay on the depreciation
recovery?
Review your bank dealings
• What’s your LVR? (Loan Value Ration
= total loan limit divided by the current
market value across all secured properties)
• Can you borrow more or are you allowed to
increase your regular principal repayments
• Are all your loans on floating interest rate?
Is this still a viable notion given the recent
RBNZ moves and commentary?
• If your loans include a range of different
• When was the last time you had a “once
over” consultation with your chartered
accountant to review your tax and debt
structure?
Have fun reviewing your portfolio and realise
you can never win the game by going around the
board and collecting $200 each time!
7 things you should find out before
choosing a property manager
How long have they been in business?
without delay. In fact this is one of the main
reasons property owners choose to have their
property managed by professionals. If your
property manager is sick or taking
leave does this mean your property
will not be looked after? In very
small companies this is often the
case.
The efficient management of residential property
requires a great attention to detail, and the
time to ensure this attention
can be given comes down to
using proven and well tested
systems. In recent years many
new property management
companies have entered the
What steps do they take to
industry. As for some people
ensure the property is not
property management appears
damaged?
to be a simple business that can
Return on investments can be
be run from home with low
destroyed very quickly by expensive
Gail Vietri of
costs. Often these companies
damage to a property. Property
Quinovic Ponsonby
lack the experience and systems
management companies that take
to allow them to operate
cursory attention to checking
efficiently enough to remain in
a tenant’s references and credit
control of the details regarding the properties
history are simply gambling with the properties
they are managing.
they are engaged to protect. If they then do not
Do they have staff to provide service 365
day of the year regardless of sickness or
holidays?
Residential property management often involves
the need to react to unexpected situations
have methods of recording the condition of the
property such as exhaustive photographing and
detailed chattels lists then the tenant in your
property can cause damage with limited chances
of being held responsible.
How often will they send you property
inspection reports?
As well as detailed photographs and chattel lists
to record a properties condition at the start of a
tenancy, a property must be regularly inspected
to ensure that it is fact being looked after.
This is time consuming and some property
management companies find that reducing
the number of inspections they perform on a
property and the length of time they spend at
each inspection is the easiest way to allow them
to reduce wages and to manage more properties
per head of staff. While this may allow them
to offer attractively low management fees, this
comes at a very high risk.
How often do they pay rent to the
property owners’ account?
Forwarding rent to owners’ accounts is one of
the more time consuming tasks performed in
property management. To reduce costs most
property management companies forward rent
to their clients accounts only once or twice per
month. As the property owner does not have the
funds in their account, in many cases this can
mean they pay an increased amount of interest,
so suffer financially as a consequence.
Can up to the minute financial
information be checked online at
anytime?
Many property management companies will
report only once per month, and the rental
statement may not carry a high level of detail.
This can make planning funds disbursement
from your rental account , or simply checking on
the past transactions difficult.
Do they have the services of a
Residential Tenancies Act legal
specialist on call?
Property managers who don’t have access to
specialist legal advice to protect their clients
interests are putting their clients interests at
risk. Tenants have never had easier access to free
information and advice to help them understand
their rights than they do now. Orders made by
the Tenancy Tribunal can amount to thousands
of dollars and like any dispute process having
the best legal advice puts you in the best possible
position.
Property investors and absentee owners trust Quinovic…
We work 100% for our owners
For a Property Review phone Stephen on
09 376 8868 or email stephen@wt.co.nz
The best tenant selection
Prompt rent payment (5 days)
On-line Financial Management and Property Inspections
An assigned Property Manager
Quinovic Ponsonby
4 Blake Street, Ponsonby
Call 09 360 8840
gail@quinovic-ponsonby.co.nz
24-26 Pollen St, Ponsonby | Ph 376 8860 | www.wt.co.nz
3 / look / Current to August 19th, 2014
Current to August 19th, 2014 / look /
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