North Shore Realty Real Estate Glenorchy Hobart New Norfolk Dodges Ferry

Because of the current uncertainty of the global economy, most Australians still believe it is safer to invest in property than in shares. Many investors would prefer to spend additional cash by investing in real estate particularly if they have been able to pay off their home loans. Most people feel their money is more secure in real estate than it would be in the stock market but you should seek advice from your financial advisor.

Our guarantee to investors
We are so confident in our Property Management that we offer all investors a three month trial of our service. If at the end of three months you are not happy, the management fees will be refunded to you.

The rental market has many factors that interact to determine what a property may achieve as a weekly rent. These include the property condition, the property features, property position, current vacancy rates, current market values, etc.

Like any investment, rental investments go through cycles, some years the return on the investment will be greater than other years. Remember, when investing in property you must allow for rates, land tax, maintenance, insurance and a minimum of two week’s vacancy. Many banks work on a net return of only 70% of the yearly rent. This is recommended. Remember when investing to always consider factors such as repayments if the interest rates go up.

Our property management department has a solid knowledge of the complexities of property management, State and Federal legislation and stratum title management. We offer the following services:

Tenant application and selection
North Shore Realty staff can guide you through the hurdles of tenant selection. We aim to find the best tenant available as quickly as possible. All prospective tenants complete a thorough tenancy application form. We use employment records, previous rental references and histories, public collection agency files, national tenancy database and referees.

Lease preparations
North Shore Realty uses the Real Estate Institute of Tasmania recommended Tenancy Agreement which complies with the Residential Tenancy Act 1997. This lease protects the owner’s rights and spells out in plain English the responsibilities of both parties.

Initial, periodic and vacating inspections reports
Before a tenant is placed in a rental property, North Shore Realty conducts a thorough written and photographic condition report and we discuss any points that may need attention with the owner.

North Shore Realty inspects rental properties on a regular basis as specified by the management agreement. These written reports address any required maintenance and preventative maintenance.

Once a tenant has vacated a property we conduct a thorough inspection of the property to confirm that no damage has been done by the tenant before the bond is released.

Rent reviews
North Shore Realty aims to ensure that you achieve full market value for your property and advise you when there is an opportunity to increase your return.

Rents and bonds
Before keys are released to the approved tenant to move into your property, two week’s rent and the required bond is collected. This money is always paid in cash, not personal cheque. We remit money to our landlords twice monthly or monthly depending on what is specified by the landlord.

Control of rental arrears
North Shore Realty checks rental arrears every week to see if your tenant is up to date. If the tenant is behind by a week then they are phoned as a courtesy reminder. If there is no response then we will discuss the matter with you and the tenant may be served with a Termination of Tenancy Notice. At all times we liaise with you and keep you informed of the situation.

Emergency repairs, regular repairs and maintenance
Emergency repairs are those that are life threatening or essential according to the Residential Tenancy Act 1997. North Shore Realty will attend to emergency repairs and organise for professional trades people to attend these emergencies as quickly as possible. North Shore Realty use trades people that can attend to emergency situations whenever they arise.

Our trade’s people can attend to general maintenance and are happy to quote for work where required.

Payment of accounts and end of financial year statements
The advantage of having North Shore Realty paying all accounts for your property is that at the end of the financial year you will have a complete financial statement on the property to take to your accountant. We regularly pay rates, land tax, repair costs, insurances and other property related accounts on behalf of landlords.

Insurance
For those of you who are investing there are insurances available to limit your risk. Some insurance companies offer special landlord insurance that covers you for things like loss of income if the property burns down or is untenantable, or for loss of income if the tenant defaults on their rent. Most insurance companies who offer this cover will insist on having your property insured with them also. For those who like piece of mind, the policy is worthwhile.

Claimable expenses
It is always worth checking with the Australian Taxation Office (ATO) and/or your accountant for a list of current claimable expenses (these do vary from year to year). The ATO publishes booklets on rental properties on a regular basis. You may also access their website www.ato.gov.au for more information.

Expenses you may be able to claim include:

• Bank fees (check this one carefully, it has recently been reviewed)
• Body corporate fees
• Advertising for tenants
• Cleaning
• Rates and water charges
• Telephone calls and phone rental
• Insurance-building, contents, public liability, landlords insurance
• Interest on loans
• Land tax
• Legal expenses
• Depreciation of chattels
• Depreciation of buildings under a certain age (capital gains issues should be checked)
• Lease costs
• Pest control
• Agent management fees and commissions
• Repair and maintenance costs
• Garden maintenance (e.g. repairs to retainer walls)
• Servicing costs (e.g. wood heater, heat pump, hot water cylinder)
• Stationery and postage
• Travel and car expenses (for rent collection, inspections, maintenance)

Other expenses such as depreciating assets, capital works and borrowing expenses (such as mortgage broker fees, costs for preparing and filing mortgage documents, title searches) may be deducted over a number of income years.

Other costs may be considered when you sell the property. For instance, surveyor’s fees and stamp duty can be taken into account when determining the capital gain on a property years later. The thing to remember is to keep all documents pertaining to the property and costs over the years.

Investment properties and property investors – income versus capital gains tax
Speak to your accountant about this topic as it is an area where many people get themselves into trouble with the tax office. The general rule of thumb is that owners of an investment property are subject to capital gains tax whilst owners who aim to develop, buy or sell property for a profit are subject to income tax on their profits. There are many pitfalls here and GST also enters into the equation. Seek independent financial advice!

Capital gains tax
We advise all clients who have rental properties or have rented out the property that they live in at any stage to speak to their accountant regarding capital gains tax.

If you live in your home but have at any stage rented it out you should keep every bill regarding the property for a minimum of 6 years after you sell it. For example, if you have owned a property for ten years and rented it out when you first bought the property for a period of 2 years then you are meant to declare this when selling the property and capital gains tax is proportioned. Capital gains tax should be paid on 20% of the gain in value of the property. If it had been rented for 3 of the 10 years then capital gains tax would be paid on 30% of the gain in value of the property. The reason that you need to keep all bills is to reduce how much gain there has been on the property i.e. if you put in a new kitchen that costs $20,000 then this would reduce the capital gains tax since you have had to spend that money to achieve the higher property price. The point is keep your receipts for every cent you spend on the property. For more information on this subject speak to your accountant or the ATO who produces a publication called Guide to Capital Gains Tax.