If you have owned an investment property for a while, you may have built a good, solid relationship with your property manager. But have you noticed you are receiving more automatically generated emails lately?
From an agency perspective, property management is changing. Increasingly, property managers are relying on automation to communicate with landlords to reduce overheads and increase agency profits.
But what about the landlord?
Or the tenant for that matter? What happened to:
Conversations with your property manager?
The ability to ask questions?
Personal service?
In the chase for larger margins, the human side of property management is being lost and at Stills Properties, we think that’s wrong and really sad.
Click to respond
We were recently speaking with a landlord who had enjoyed a great relationship with their property manager for many years, but then she left and the “robots” took over.
Now, the landlord receives automatically generated emails asking for instructions. One of them simply said:
Repair required. Please click the link below.
Repair to curtain rod required
Do you wish to have this repair carried out?
Require a quote?
Require more information?
Not proceed with the repair?
Or this one:
Your tenancy agreement is coming to an end.
Do you wish to renew your tenants agreement?
Do you require more information?
No, you do not wish to renew?
The landlord wanted to know why they had to tick a box to ask for an opportunity to speak with their property manager. We agree!
Managing properties is a “people” industry and your investment property is a significant investment. That’s why we believe you should be able to call or email us if you have a question, concern or are looking for advice.
It’s the same with tenants. They need to know there is someone they can speak to if they have a problem, concern or question.
Automated emails put agency profits first but at Stills Properties, we put people first.
Do you feel like a number or a valued client?
Technology has its place. There’s no disputing that. But it should never replace personalised, customer service. That’s why your investment property will be personally managed by our founder, Brigitte Stills.
So if you would like to be treated like a valued client, contact Brigitte from Stills Properties on 1300 091 638 or email propertymanager@stillsproperties.com.au
A good return on your investment property requires a long-term, high quality tenant. But COVID-19 has changed everything and the border closures haven’t helped. Now, the rental property market is flooded with short term rental properties that used to accommodate tourists – especially in Sydney. As a result, competition is strong.
So the question is, how do you find great tenants during a pandemic?
1. First impressions
Like everything in life, first impressions count. It’s the same with renting your investment property – and it starts with the online photos you use to promote your property. Amateur photography won’t be good enough. You need to invest in a photographer who knows what they are doing and can provide advice.
2. Understand what your ideal tenant is looking for
If your investment property is a 3 bedroom home with spacious garden, your ideal tenant won’t be single. A one bedroom apartment won’t appeal to a family of 4. You need to thoroughly understand what potential tenants are looking for and target your advertising to those who are the best fit for your property.
3. Know the flaws and fix them!
The rental market is competitive at the moment so you need to ensure your property is in impeccable condition. Before you go to market, be critical of your property. Are there any faults or flaws that could put off a great tenant? Do you have any outstanding repairs or maintenance issues that need attention? It’s a tenant’s market at the moment and this trend will continue for some time. As a result, tenants can be fussy and will compare your property with others that are on the market.
4. Have flexible opens
Most Sydney property managers only carry out 1 or 2 open homes per week and these opens only last for 15 minutes. At Stills Properties, we fit in with viewers by offering morning or evening opens which run for 30 minutes, if required. By being flexible, we’re more likely to secure a great tenant – fast.
How long do you want your investment property to be on the market?
With over 35 years’ experience in property management, Brigitte Stills may not have experienced a pandemic. But she has seen the market through many ups and downs. As a result, she understands what it takes to find a long-term, high quality tenant in the shortest possible time. That’s why Brigitte’s landlords have been with her for so many years.
At Stills Properties, we currently have lease turnarounds of 3-7 days since COVID-19 began. Can your current property manager say that?
Before you purchase an investment property, you’ll probably seek expert advice from people like your mortgage broker for finance, possibly a buyer’s agent to find the property and a building inspector to check the property is sound.
But none of these experts view a property from the perspective of a potential tenant and that can make a world of difference when it comes to rental returns. That’s why consulting a trusted property manager can really help.
Why consult a property manager before you buy an investment property?
Your property manager is the best person to advise on the rent you can expect. They’ll also be the person who needs to find a great tenant. So getting them in before you sign the contract of sale is another level of protection when it comes to making a wise property investment.
Property managers view properties from the tenant’s perspective so they look for things that will make your rental property desirable. They’ll also consider what type of tenant will be attracted to your investment and the rent they are likely to pay.
For example, a shabby looking 3-bedroom home will attract younger people such as students, so you can expect to receive a lower rent and possibly a high turnover of tenants. Whereas, a well maintained 3-bedroom home will attract families who are likely to remain tenants for several years – providing you with a stable rental income.
Does the investment property comply with current Tenancy Laws?
When you buy a home to live in, you may decide to overlook some maintenance issues but it’s different for investment properties.
Under NSW residential tenancy laws, rental properties need to meet 7 minimum standards to be considered fit for habitation. In addition, there may be other repairs or upgrades required. An experienced property manager should be able to advise you on what’s important to do now and what needs to be planned for. Afterall, if an expensive kitchen or bathroom renovation can be delayed without jeopardising your rental income, then why spend that money now?
Suburb profiles are important
Have you ever noticed that suburbs tend to attract similar types of people? For example, suburbs with a good mix of public and private schools tend to attract families. While suburbs with lots of restaurants tend to attract couples and singles?
When it comes to buying an investment property, you’ll need a property that fits the suburb’s profile. Let’s face it, a studio apartment will be difficult to lease in an area that attracts families!
Unbiased advice you can count on
Your property manager is the one who will be taking care of your property in the long term, so consulting with them before you buy an investment property makes sense.
If reliability, knowledge and experience are important to you, you can’t go past Brigitte Stills from Stills Properties. She’s been looking after landlords and their properties for over 30 years.
When the economy starts to contract, we all look at ways to save money. For some property investors, reviewing the need for a managing agent might be on their list of cost savings. But COVID-19 has changed the rental market landscape.
These days, managing a property is more than collecting the rent and arranging for repairs. There are times when you will also need to manage some difficult conversations with your tenants. If you already have a property manager, you’ll find you are relying on them more than ever and if you don’t currently have one, you might want to reconsider your decision.
Tenant hardship
Tenants are losing their jobs or have been asked to take pay cuts. This means, they may not be able to pay their rent – even if they are receiving payments under the Government’s Coronavirus Stimulus Package.
There are 3 ways you can handle this situation:
1. Allow the tenant to break their lease and find a new tenant
With this option you will be facing the challenge of finding a new tenant who is prepared to pay the same rent. Currently, there are almost 7000 properties for lease in the Sydney metro area, so finding a great tenant who is prepared to pay the same amount of rent, could be a challenge.
2. Offer your tenants a rental abatement
A rental abatement provides tenants with a rent-free period on the understanding they will repay the lost rent at the end of the rent-free period. It’s important both the landlord and tenant understand the legal ramifications of a rental abatement. It may not be a good solution for either of you.
3. Reduce the weekly rent for a period of time
In this situation, the tenant continues to pay rent but at a reduced rate. The rent reduction usually has a fixed term (e.g. 3 months). At the end of the rental reduction period, the rent will return to previous levels. In this situation, the landlord permanently loses rental income for the period of the rent reduction. However, regular rental income is still being paid.
What we do
At Stills Properties, we believe in creating long-lasting relationships with both our tenants and landlords. In the current environment, these relationships are more important than ever so this is what we are doing:
1. Checking-in with tenants on a regular basis
Our priority is to make sure every tenant is doing ok. But our commitment to making regular contact gives us an opportunity to check each tenant’s employment situation and their ability to continue paying rent.
2. Investigating rental reduction offers, if appropriate
If a tenant comes to us to ask for a rental reduction or abatement because they have lost their job, we will request appropriate documentation to verify their job loss. Assuming everything checks out, we negotiate between the landlord and tenant to reduce the rent for a fixed period of time.
3. Providing landlords with options
We understand that a loss of rental income could mean financial hardship for our landlords, and let’s face it, landlords can lose their jobs too. There are various tax reductions and mortgage freeze options available and we’ll chat to you about your options.
4. Know the changing legislation
There is no uniform code on rental relief for each state so it’s easy to get confused. As a result, some tenants might ask for leniency that’s only offered in another state. As your managing agent, it’s our job to know all the relevant information for investment properties in NSW. That means, our landlords don’t need to have difficult conversations with their tenants or even spend time looking for the relevant legislation.
While the coronavirus is new, managing properties isn’t!
With over 30 years in the Sydney property management business, we know what it’s like to manage properties in tough times. The cause may vary but our hard work and attention to detail never changes.
Residential property management is always about building strong, open and honest relationships with people. If you feel your current property manager isn’t looking after you or your property the way they should, contact Brigitte Stills on 1300 091 638 or email propertymanager@stillsproperties.com.au
The NSW Government is introducing an interim 60-day stop on landlords seeking to evict tenants due to rental arrears as a result of COVID-19, together with longer six month restrictions on rental arrears evictions for those financially disadvantaged by COVID-19.
New measures Coronavirus (COVID-19) has already had a significant impact on the economy, meaning some tenants are having difficulty keeping up with rent payments. The NSW government is introducing measures to help landlords and tenants work together. The new measures include an interim 60 day stop on landlords issuing termination notices or applying for NSW Civil and Administrative Tribunal (the Tribunal) eviction orders due to rental arrears, where tenants are financially disadvantaged by COVID-19.
“This will allow time for Government financial support to reach those who need it and limit social movement in order to minimise public health risks during the COVID-19 pandemic.”
A landlord is required to negotiate a rent reduction with the tenant in good faith in the first instance, and can only seek to give a termination notice or apply for an eviction after the interim 60-day stop if it is fair and reasonable in the circumstances of the specific case.
Fair Trading will be able to assist landlords and tenants try to reach an agreement if needed.
Along with these restrictions on evictions for rental arrears, the Government will be extending the notice periods for certain other lease termination reasons to 90 days. At any time during the 60 day stop and the longer six month restrictions, landlords can still apply to the Tribunal at any time to take possession of a property if they are suffering undue hardship.
Eligibility To meet the requirements for 60 day stop on evictions and the longer six month restrictions, a household needs to demonstrate they are impacted by COVID-19. A household is COVID-19 impacted if:
1. one or more rent-paying members of a household have lost employment or income (or had a reduction in employment or income) due to COVID-19 business closures or stand-downs, or
2. one or more rent-paying members of a household have had to stop working or reduce work hours due to illness with COVID-19 or due to COVID-19 carer responsibilities for household or family members, and
3. the above factors result in a household income (inclusive of any government assistance) that is reduced by 25% or more.
Important All tenants who are not impacted by COVID-19 are expected to honour their existing tenancy agreements including paying all rent and charges in full.
Flowcharts To understand how the ban on evictions due to COVID-19 may affect your tenancy, see the first flowchart. If you are a landlord and you want to understand how the new measures affect all types of residential tenancy terminations, use the second flowchart. Flowchart: Can a tenancy be terminated during COVID-19 Flowchart for landlords – termination of tenancy options Template letters For tenants We have created a template letter for tenants to help them when approaching landlords to request rent reduction. We have also created an example. To help with your request, your letter should also include:
1. your original household income 2. your change in circumstances due to COVID-19 and how this has impacted on your household income 3. the rent payment you would be able to meet under your new household income 4. any income support you receive
For landlords when responding to a tenant All landlords must be prepared to negotiate rent payments with tenants experiencing financial hardship due to the COVID-19.
To help you, we have created a template you can use when responding to rent reduction requests. We have also created an example. Your response letter should also include:
1. your financial situation – be open and honest about your financial situation, including whether you rely on the rental income to cover mortgage repayments or other expenses.
2. your conversations with your lender – outline the result of conversations you’ve had with your lender about waiving or reducing your own mortgage repayments.
3. the rent payment that you would be able to accept
4. clarify whether the rent payment loss (arrears) will be waived or repaid
For landlords when talking to their financial institution Landlords are encouraged to approach their financial institutions to seek a mortgage freeze or reduced repayments as part of the negotiation discussions with their tenant/s. We have created a template you can use when approaching your lender. We have also created an example.
Your letter should include:
1. your financial situation be open and honest about your financial status if you rely on the income from your rental property to help pay for the mortgage, and are negotiating with your tenant about rent payment, this should be outlined and evidenced in your request.
2. the mortgage waiver or reduced payment you are seeking until you or your tenant resumes normal employment arrangements.
3. clarify whether your rental payment losses (arrears) will be waived or repaid under a repayment plan with your tenant once the COVID-19 emergency is over
Can a tenant and landlord still end a tenancy if they agree? Yes. A tenant and landlord can agree to end a tenancy and decide when and how this is to happen.
What proof does a tenant need to show they are impacted by COVID-19? The tenant can provide simple documents to show that they are impacted by COVID-19, for example: proof of job termination/stand-down, or loss of work hours proof of Government income support proof of prior income.
What do the changes mean for tenants who are impacted by COVID-19? The new rules put an immediate 60 day stop on termination notices and Tribunal applications for terminations based on rental arrears where a tenant is unable to meet their rental obligations due to being impacted by COVID-19.
This will allow time for tenants to receive Government income support and for landlords to negotiate a reduction or waiver of mortgage repayments with their lender.
It will also allow time for tenants and landlords to negotiate possible reductions in rent if needed. A dispute resolution process is available through NSW Fair Trading if no agreement can be reached or where the landlord or tenant would prefer to use this option.
Does the tenant need to pay back the rental arrears or will the amount be waived? The amount of rent arrears accrued by a tenant who has negotiated reduced rent will not automatically be waived. Whether rental arrears will be waived is subject to negotiation between the tenant and the landlord (with assistance from Fair Trading’s dispute resolution process as required).
Are sub-tenants covered by the stop on evictions? The stop on evictions applies to sub-tenants who are unable to meet their rental obligations and who are covered by the Residential Tenancies Act 2010. These are tenants where the property is subject to a written residential tenancy agreement and:
are a sub-tenant under a written residential tenancy agreement with the tenant named in the main tenancy agreement, or
a tenant under the main written tenancy agreement has transferred the tenancy to them.
Can I still end my tenancy using the required notice periods and not negotiate with my landlord? Yes. Tenants who do not wish to stay in their premises can terminate using the existing notice period required for their specific agreement. Tenants seeking to end a fixed term agreement early may be required to pay break fees under their agreement. Details about ending a fixed term agreement early are outlined on the Fair Trading website.
Why are we not protected from eviction for six months as was announced following the National Cabinet meeting recently? The package announced is designed to support tenancies to continue wherever possible. The new laws will provide a six month moratorium on landlords giving termination notices, or making applications for forced evictions, due to rental arrears for tenants who are impacted by COVID-19, provided both parties seek to find a mutually workable solution.
The new laws allow landlords, after the 60-day stop, to seek to terminate a COVID-19 impacted tenancies for rental arrears but this can only occur if they have tried to negotiate a rent reduction with the tenant in good faith and seeking a termination is fair and reasonable in the circumstances of the specific case.
What if the landlord refuses to negotiate and we can’t reach an agreement? The landlord and tenant should both attempt in good faith to negotiate a reduction in rent.
NSW Fair Trading provides a dispute resolution process that landlords and tenants can use if they can’t reach an agreement themselves. Fair Trading will request evidence from the tenant about their previous income and current income from all sources, including any Government income support. Information will also be sought about any application the tenant has made for income support.
Tenants need to have an idea of how much rent they can pay when considering negotiations. Fair Trading will then contact the landlord to seek a mutual agreement on a temporary arrangement for the payment of rent.
Is income calculated before or after tax? When determining whether a tenant meets the COVID-19 impact test, the income received is the money coming into the tenant’s bank account after tax. How does the test apply to group houses where not all rent paying tenants have been affected by COVID-19? The COVID-19 impact test applies to the total household income, inclusive of any government assistance, such as the new job keeper payments.
Will my landlord insurance cover my rental losses? Landlords should check their insurance policy to see whether they are covered for rental default. Different policies will have different limits and requirements. Many insurers are adopting new procedures to deal with the impacts of COVID-19, and may require evidence that the landlord has attempted to negotiate with the tenant.
I am a landlord, but I can’t afford to provide a reduction in rent Landlords should seek to negotiate with their lender to try to obtain an agreement to waive or reduce mortgage repayments. Many lenders are offering to reduce or waive payments at this time.
If this is possible, landlords should have a greater capacity to agree to a reduced rent or charges for a period of time. The immediate 60-day stop on evictions will also allow time for the tenants to access Government income support and may allow tenants to resume paying existing rent.
Can tenants be encouraged to look at accessing their super to pay rental arrears? Agents and landlords must not encourage tenants to access their super early to cover any rental arrears. This could constitute unlicensed financial advice and may not be in the best interests of the tenant. Financial advice must only be provided by qualified and licensed financial advisers or counsellors, not by agents or landlords.
What happens once the interim 60 day stop ends? Once the intermin 60 day stop has ended, a tenant(s) who is still unable to meet their rental obligations due to COVID-19 can only have their tenancy terminated on the basis of rental arrears if the landlord has attempted to negotiate reduced rent in good faith but the tenant has failed to do so.
I am a tenant in social housing – does the stop on evictions apply to me? I am a tenant in social housing – does the stop on evictions apply to me? Social housing providers have their own processes for dealing with rental arrears and are not covered by the new provisions.
Example scenarios
Reduced income together with income support resulting in less than 25% loss of income
A tenant pays $300 per week in rent under their tenancy agreement
The tenant earned $800 per week but lost their income as a sole trader due to the impacts of COVID-19 business closures on their business, following public health orders
The tenant now receives income support of around $1,500 per fortnight, or $750 per week, paid through their employer*
The tenant’s lost income per week is $50 per week, which is less than 25% of the tenant’s original income.
The stop on termination notices and applications for eviction orders due to rental arrears does not apply to this tenant.
Increase in income due to government support payments
A tenant pays $300 per week in rent under their tenancy agreement
The tenant earned $650 per week but lost their job due to business closures following public health orders
The tenant now receives income support of around $1,400 per fortnight, or $700 per week, paid through their employer
The tenant’s income has now increased as a result of the Commonwealth payment: instead of $1,300 per fortnight, they now earn $1,400 per fortnight*
The stop on termination notices and applications for eviction due to rental arrears does not apply to this tenant, because there has been no reduction in their total income.
Tenant and co-tenant in a family household. The tenant loses income and gets income support
A family pays $750 per week in rent in total and the adults are co-tenants under their tenancy agreement
Tenant A earns $1,000 per week, while their partner tenant B earns $500 per week
Tenant A loses their job due to business closures, but is receiving a government payment of around $1,100 per fortnight or $550 per week*
There is no impact on tenants B’s income
The lost household income is equal to $450, which is equal to 30% of the original household income
The stop on termination notices and applications for eviction orders due to rental arrears applies to this household.
Tenant is sole breadwinner, tenant loses income and gets income support
A tenant pays $600 per week in rent under their tenancy agreement and is the sole breadwinner for the family
The tenant loses their job due to the business closures following the public health order announcements. The tenant’s income was previously $1,000 per week
The tenant receives income support payments from the government of around $1,500 per fortnight, which equals $750 per week*
The loss in household income is equal to $250 per week which is 25% of the original household income
The stop on termination notices and applications for eviction orders due to rental arrears applies to this household.
Share household where all tenants are on the main lease
Two friends share a house and are named on the lease.
The rent is $1000 per week
Tenant A earns $1200 per week and tenant B earns $800 per week, making a combined household income of $2000 per week
Tenant A loses their job and now receives $1115 per fortnight which is around $557 per week.
The combined income of the household is now $1357 per week
The loss in income is $643 per week, which is 32% of the original household income.
The stop on termination notices and applications for eviction orders due to rental arrears applies to this household
Share household with head tenant and sub-tenant on a written lease with head tenant
Two friends share a house and the rent payable on the main lease is $1000 per week
Tenant A is the head tenant and has a written sub-tenancy agreement with Tenant B
Tenant A earns $1200 per week and tenant B earns $800 per week, making a combined household income of $2000 per week
Tenant A loses their job and now receives $1115 per fortnight which is around $557 per week.
The combined income of the household is now $1357 per week
The loss in income is $643 per week, which is 32% of the original household income
The stop on eviction orders being issued due to rental arrears applies to Tenant A’s agreement with the landlord
As Tenant B’s income has not changed, the stop on notices for termination and eviction does not apply to Tenant B’s sub tenancy agreement with tenant A.
I need more support and information Trained dispute resolution officers in Fair Trading are available to help landlords, managing agents and tenants to negotiate temporary changes in rental arrangements, if agreement cannot be reached between parties.
When you seek assistance with negotiations, we may need to obtain some initial information before it can schedule a time to discuss the matter with both parties.
How to seek help If you have attempted to negotiate a rental plan without success you can apply for assistance by completing the Tenancy Complaint Form.
Apply for assistance Tenants will be asked to provide evidence that they are experiencing financial hardship, such as:
proof of temporary or permanent job loss (eg, employer separation letter, evidence of reduced shifts)
proof that your business has suffered due to COVID-19 (eg, type of business – noting that some are now the subject of a government ban and cannot operate)
proof of previous employment income and current income (eg, bank statement, payslip)
proof of Government income support payments or applications made (eg, statement or advice/acknowledgement from Centrelink)
Tenants will need to assess the amount of rent that they are able to pay and the type of rental arrangement requested, for example:
Reduce my rent by $100 a week for a period of six weeks, or
Reduce my rent by $200 a week until employment resumes
Copies of your evidence can be uploaded from your mobile device and attached to the complaint form.
How long is the process? We will be treating negotiation requests as a matter of priority and will respond as quickly as possible.
The timing for each negotiation process will be largely influenced by the demand for the service as well as whether parties can provide the requested information in a timely manner.
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