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Investors Eyeing QLD as Vacancy Rates Dry Up…

vacancy ratesInvestors are edging back into the Queensland market as vacancy rates continue to fall across the state, new data shows.

“Until very recently, we had many potential first home buyers and investors sitting on the sidelines while our market and economy recovered from the natural disasters last year, which has put pressure on our rental market,” Real Estate Institute of Queensland (REIQ) CEO, Anton Kardash, said.

“However, this pent-up demand is now starting to dissipate with the latest Australian Bureau of Statistics (ABS) data showing increasing numbers of investors and first-timers coming back into the market.”

According to the REIQ, ABS lending finance figures for February showed the number of Queensland investors was up significantly compared to the same period last year. The data also showed that demand from first-home buyers and owner-occupiers was also starting to increase.

“This more robust level of investor demand is good news for our rental market given more investors means more investment stock for renters to choose from,” Mr Kardash said.

The latest REIQ March residential vacancy rates show the majority of the state is enjoying strong demand from tenants, with vacancy rates in many areas now below three per cent.

“A vacancy rate of three per cent is generally considered to be the equilibrium point of supply and demand,” the REIQ said.

In Brisbane, the vacancy rate has reduced to 1.7 per cent, from 2.3 per cent in December last year. Brisbane’s inner-city recorded a vacancy rate of 1.4 per cent, down from 1.9 per cent in December.

Agents from REIQ inner Brisbane accredited agencies report supply levels remaining limited as tenants stay put, students are settled for the year, and potential first home buyers still opt for a wait-and-see approach. Investment properties currently up for sale are largely being bought by owner-occupiers which is also contributing to less rental stock overall.

The Gold Coast rental market continues to improve with its vacancy rate falling from 5.2 per cent in June last year to 3.9 per cent in March. Likewise, the Sunshine Coast has improved from 4.9 per cent to 3.1 per cent over the same period.

According to the REIQ, Gold Coast agents are reporting increased demand for houses over units, which are still in oversupply. Well-priced rentals are also reportedly moving faster. Agents also report a recovery in investor activity – a sign that confidence levels are returning to the Gold Coast property market.

The REIQ said demand for property in Mackay remains strong, at 1.7 per cent, however there was an easing compared to December when its vacancy rate was just 0.7 per cent. Agents from REIQ accredited agencies say this easing level is due to a number of leases expiring as well as the upper end of the rental market moving more slowly. Tenant demand remains strong with some agencies reporting more than 10 applicants per listing and less than a week to let. Investor activity is also reportedly on the increase in the region.

Rockhampton recorded a vacancy rate of one per cent in March, making it the tightest rental market for major regions across the state, according to the REIQ. With tenancies reportedly taking less than a week to fill, local agents are welcoming the increased investor activity in the region.

The Cairns rental market has also improved markedly, the REIQ said, with it recording a vacancy rate of 2.5 per cent as at the end of March compared to 3.8 per cent at the same period last year. Agents from REIQ accredited agencies report a recovery in the tourism industry which is improving employment opportunities and therefore demand for rental property.

Source : Real Estate Business Bulletin (1 May 2012)

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If You Haven’t Got Landlord Insurance You’re Nuts!

Landlord insurance is a vital risk management tool for professional property investors. Specific risks associated with owning investment property are covered by landlord insurance and the premium is tax deductable.

Landlord insurance will generally cover:

  • Malicious and accidental damage by a tenant
  • Theft by a tenant
  • Landlord’s legal liability
  • Loss of income should a tenant abscond
  • Rental defaults

Standard home and contents insurance do not cover such circumstances and it is important for investors to fully protect their assets. Landlord insurance is generally affordable and should be considered a “must have” for the professional property investor.

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How to Give Tenants’ Notice Without Grounds

A lessor rents out his investment property on a fixed term agreement which is due to end on 31 December. He decides to allow his student son to move into the property, which is near the university, on 1 February.

The lessor would like the current tenants to move out on 31 January, and he gives them written Notice to leave on 30 November.

After the fixed term agreement ends on 31 December the agreement becomes periodic, meaning the tenant can leave at any stage by giving two weeks notice.

When a lessor ends a tenancy agreement without grounds, they must give the tenant two months notice to leave. This applies to fixed term as well as periodic agreements.

The Residential Tenancies and Rooming Accommodation Act 2008 (the Act) allows a tenancy to end for a number of different reasons, such as non-liveability or abandonment. The Act also allows a tenancy to be ended ‘without grounds’ if the party ending the agreement does not give a specific reason.

A lessor cannot end a fixed term agreement without grounds before the agreement’s end date, unless the tenant agrees.

Fixed term agreements can end only when either the lessor or tenant gives written notice. When the fixed term agreement moves beyond its agreed end date – and if neither party has given notice – it becomes a periodic agreement.

A lessor or tenant can end a fixed term or periodic agreement. When a tenant decides to leave the rented property, they must give the lessor two weeks notice. However, if it is a fixed term agreement, a tenant cannot leave before the agreement’s end date unless the lessor agrees.

If a fixed term agreement is for a period of six months, the lessor and tenant should be aware that negotiations about continuing the tenancy agreement may sometimes begin three months before the end of the tenancy.

When a lessor presents a tenant with a Notice to leave (Form 12), giving the required two months notice, the tenant might choose to find a new rental property immediately, but in a fixed term tenancy, the tenant cannot leave before the agreement’s end date unless the lessor agrees.

More information about ending a tenancy without grounds is available on the RTA website.

Last Updated: 03 August 2011  Source RTA

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Smoke Alarms – Seller, Landlord and Tenant Responsibilities Made Clear

Know your responsibilities in relation to the latest smoke alarm legislation. The stakes are high so let’s be sure to get it right!

Landlords

Landlords are required to:

– install and maintain smoke alarms in rental properties in accordance with Australian Standard 3786. This can be a 9 volt battery operated smoke alarm, with a one year battery for dwellings built before 1997. However, a good quality 10-year battery alarm or hard-wired alarm is more reliable and effective in the long term. Homes built after 1997 must have hard-wired smoke alarms installed.

– test and clean each smoke alarm within 30 days before the start of a tenancy agreement. A landlord may arrange for an agent to do this.

– replace each battery in the smoke alarm that is flat or that the landlord or the landlord’s agent is aware is almost flat within 30 days before the start of the tenancy. This must be done in accordance with the manufacturers’ instructions.

– replace the smoke alarm unit before it reaches the end of its service life. The service life is usually indicated by the warranty offered by the smoke alarm manufacturer.

– have checked by a competent professional a smoke alarm which the tenant has reported as not operating. Repair the smoke alarm as required. Alternatively, replace the smoke alarm. A managing property agent may be able to arrange for a landlord’s legislative requirements to be met.

Fire Officers will investigate complaints received. There is a maximum fine of $500 for failing to install smoke alarms.

Tenants

Tenants are required to:

– test and clean each smoke alarm in the dwelling at least once every 12 months (once a month is recommended)

– replace, in accordance with the information statement in RTA Form 171 provided to you, each battery that is flat or is almost flat during your tenancy

– advise the landlord or the landlord’s agent as soon as practical if a smoke alarm in the rented property

Sellers

On the sale of a property, the seller must lodge a form with the Queensland Land Registry (www.nrw.qld.gov.au) stating that smoke alarms are installed in the property and that the purchaser has been informed that smoke alarms are installed.

Information taken from the 11 page Qld Government Booklet downloadable here which has Everything you need to know about smoke alarms and more!

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A Slight Reprieve for Some Pool Owners

On 17 February 2011 the Queensland Parliament amended the laws pertaining to swimming pool safety certificate requirements in relation to rental properties with non-shared pools. The amendments, which apply retrospectively from 8 January 2011, are outlined below.

In summary, due to the recent disaster events in Queensland, the Government has delayed the application of the pool safety certificate requirements for rental properties with non-shared pools. From 8 January to 8 July 2011 an exemption applies, and allows properties with non-shared pools to be leased without a pool safety certificate being effected prior to a tenancy agreement being entered into.

Owners must however give a ‘Form 37: Notice of no pool safety certificate’ to the tenant before entering the tenancy agreement (or any other accommodation agreement as defined in the Building Act 1975).

The six month exemption applies state-wide and is intended to more easily allow homes to be rented to evacuees, or people who are assisting with recovery efforts. All other aspects of the new pool safety laws still apply and are not affected.

Source REIQ

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