Cheap vs Value for Money

by Administrator 20. September 2015 06:53

Things to consider when choosing an agency to manage your property

Too often when I am asked for more details on our property management services, I am initially asked for our fee schedule. Yes this is definitely an important thing to check….but is it the MOST important thing to consider when choosing an agency ?? definitely not.

Cheap vs Best Value for Money ?

A cheap agency is one that has cheap fees but also cuts corners as a result, they may use limited resources, they may also pay staff little which means they are more likely to have staff change overs. An agency that is best value for money, knows what their profit margin is, pay their staff well, invest in training and the best resources necessary and prices their fees accordingly. In most cases they will offer you the same marketing and service as a more expensive agency but are more realistic.

Did you know that when you are trying to negotiate your fees with an agency from 9.35% down to  8.8% you are trying to save yourself a measly $3.00 per week !! (don’t forget that this is also tax deductible !) Property Management fees have been the same for probably more than 20 years yet costs have gone up (and yes rents have too I hear a lot of you say !)

What is important ?

  1. How is the department set up ? Is the agency set up with pods, so one person deals with maintenance, one person deals with leasing, one person does routine inspections, one person deals with tenants etc. OR are you given a property manager who manages the entirety of the property from viewings to final bonds ? OR a bit of both ?? It is important for you to be clear as to how this works so that you can consider the pro’s and con’s of each communication method

  2. Where will your property be advertised ? realestate.com makes up approximately 60% of our tenant enquiries therefore I suggest that this website is really important to be on. Other websites such as domain.com.au and reiwa.com.au are also important for our industry.

  3. How are property managers monitored ? Who is the person in the office responsible for keeping an eye on the person looking after your property ? How are staff motivated to do a good job etc. It is a good question to ask ! You also need to know that there is a person within the company that is easily contactable should a problem arise

  4. What is the agency doing to reduce vacancy rates in this tough market ? Find out what the process and marketing plan is to minimise any lengthy delays with renting out your home.\

  5. Ask to look at the agency’s paperwork. Particularly a copy of the property condition report, routine inspection report and end of month statement. Make sure you are happy with the detail of these reports. Every agency’s will be slightly different.

Hopefully these little tips will give you a few ideas of questions to ask when meeting with an agency to do a rental appraisal and I hope to be able to answer all these questions for you when I meet with you.  Feel free to contact me any time on 0416 352 679 or ashleigh@socorealty.com.au


WA home owners are moving less frequently

by Administrator 8. April 2015 23:54

New analysis from the Real Estate Institute of Western Australia indicates that Western Australians are moving house less frequently than they used to.

A comparison of figures between the periods of 1990-91 and 2013-14, showed that as dwelling stock across the state increased from 586,000 to 992,000, the average turnover time increased from 14 to 21 years.

REIWA President David Airey said this suggested that owners and investors are holding onto property for longer, which debunks the long held myth that home owners move an average of every seven years.

“The peak turnover rate of 11 years occurred in 2005-2006, at the height of the property boom and record turnover.

“Conversely, the longest turnover period of 25 years occurred in 2010-2011 as markets across WA recorded weak turnover levels not seen since the recession in the early 1990s,” Mr Airey said.

Further analysis at sub-region and region level produced varying results across the state, with the Perth metro area's turnover climbing from 14 to 19 years, which was not as significant as the overall state figure.

“If we break this down to the types of dwellings, we find that owners of multi-residential property, such as units, apartments, villas and townhouses, have traditionally held property for longer and continue to do so.

“This is probably influenced by the fact that around half of all multi-residential stock is owned by investors. Around 22 per cent of Perth’s dwelling stock is multi-residential and our research shows ownership of this stock has stretched from 16 to 23 years since 1990,” Mr Airey said.

Perth metro 

At sub-region level within the Perth metro area, results were much more varied.

In the central sub-region (roughly a 10 kilometre radius from the CBD), data showed that this zone held 59 per cent of all dwelling stock in the 1990s, but had dropped back to 47 per cent, while the average turnover moved slightly from 15 to 19 years.

Higher turnover rates were found through the northeast region of Perth, which includes Swan, Mundaring and Kalamunda. In this region, the ownership period stretched from 14 to 21 years, which is the longest rate in the Perth metro area.

Perth’s southeast sub-region saw more rapid turnover through Gosnells, Armadale and Serpentine-Jarrahdale.

“This is probably indicative of the larger number of first home buyers and investors, and possibly also the higher number of forced sales resulting from the recession in the early 1990s.

“These factors may also have influenced the northwest sub-region through Joondalup and Wanneroo, where the holding time went from a low of 13 years to 19 years during the period of this study,” Mr Airey said.

Perth’s southwest region, through Cockburn, Kwinana and Rockingham, saw turnover rates shift from 14 to 18 years.

Regional WA

In Regional WA, turnover times were more highly variable as a result of changing economic fortunes, population growth, investment trends and lifestyle choices which ebb and flow around the state.

“In the Peel region, including Mandurah, the high level of turnover once associated with discretionary holiday homes has given way to levels now comparable to Perth as its population has grown.

“It looks similar through the South West and Great Southern, with an upward trend in turnover time more reflective of lifestyle living choices, while in the Wheatbelt, the holding time has stretched out to 42 years as rural communities decline,” Mr Airey said.

Through the mid-west, the mix of rural and holiday settlements beyond Geraldton has influenced more recent turnover rates, while in the Gascoyne, lower sales activity after the Global Financial Crisis in 2008 blew out the turnover rate.

The Pilbara saw little change between 1990-91 and 2013-14, and there was an extended period between 1995 and 2010 where average turnover periods levelled at 20 years.

In the Kimberley, low turnover in sparsely populated and small communities resulted in turnover rates similar to those found in the Wheatbelt.


Source: aussiehome.com


Perths Rental Market

by Administrator 15. September 2014 18:12

About one out of every four households in Western Australia is a rental property, representing approximately 200,000 dwellings.

The proportion of renters has been reasonably steady at around 28 per cent of all households for over a decade, although there is a change occurring in the mix of private and public housing tenants with the proportion of private sector tenants growing.

Most rental properties are located in the inner suburbs. For example, over 75 per cent of all metropolitan rental properties are located within a 15 kilometre radius of the CBD.

Suburbs with the highest concentration include East Perth, Karawarra, West Perth, Northbridge, Highgate, Bentley, Glendalough and Victoria Park. Rental properties can account for up to 70 per cent of all dwellings in these areas.

Surprisingly, most tenants live in houses and not flats or units. Census result continue to show that up to 60 per cent of tenants live in traditional houses, although it’s true that around half of all strata dwellings exist as rental properties.

In WA the most common age group for renters is between 20 and 34. Typically, these are people in transition to home ownership. Not surprisingly then, the most common home ownership and buying age group is around 34 to 44.

Most tenants prefer a short lease, with the more common lease being six months. Tenants clearly like the flexibility of a short lease, however more than half of all such leases are renewed for a further six months when the initial lease expires.

The median rent for accommodation in Perth is now $450 per week if you include units, apartments, villas and houses in the equation. Houses alone are generally higher with a median of around $460 per week.

Darwin remains the most expensive capital with houses renting for around $650 per week, while Canberra and Sydney are similar to Perth at around $450. Adelaide is the cheapest at $330 per week.

The average rent for three bedroom homes across all eight capitals is around $405 per week. Seen in this context, Perth is about 15 per cent above the overall Australian rental average for a house.

However, rents in Perth have been slowly coming down since 2013 with the median weekly rent dropping $25 from $475 around this time last year.

This is due to a slow-down in population growth but also from large numbers of renters having taken advantage of very low interest rates to buy a home of their own, enabling them to leave the rental system.

This in turn freed up more properties for rent and is a key reason why Perth’s current vacancy rate is now a third higher than average, sitting at 4 per cent or 5,600 properties.

By David Airey (aussiehome blog)

SOCO REALTY Sell Rent Buy Local South Perth Como Kensington Real estate agent