welcome

Property continues to be one of the lead news stories week after week – strong value growth, rental returns, interest rates forecasts, demand and clearance rates… as well as the industry perennials like price quoting. our focus is to help you build your wealth through investment property, with this newsletter highlighting some interesting market changes and some opportunities to enhance your portfolio. enjoy!

consider the value of a quality tenant…

After experiencing more than 12 months of unprecedented low vacancy rates and extraordinarily high rentals, Melbourne’s investment property market has been skewed very much in favour of the property owners and landlords. Unfortunately, this trend can’t continue and we are seeing the pendulum starting to swing back.

While the media hasn’t quite caught up yet, we are experiencing more properties available now than there have been in many months, and tenants are becoming more selective and discerning - resulting in properties taking longer to lease. It is crucial now to be smart to ensure your investment continues to work for you, and maximise your return – while ensuring that your chosen tenant will take care of your property. Your property manager is there to advise and guide you when reviewing rent and searching for a new tenant.

With recent uncertainty about how long the state and federal first home owner’s grants will continue, many tenants entered the property market and gave notice to vacate in order to occupy their own home. Many more tenants have elected to move to suburbs further from the CBD in order to enable them to either reduce their rental expenses, or gain more space for the same price. Rent reviews are tending to trigger tenants to look elsewhere and make lifestyle changing decisions to avoid increases that 12 months ago they were accepting without a lot of question.

When the time comes to review the rent for existing tenancies, it is important to consider the value of a quality tenant, particularly one who will commit to another fixed term lease. Not only should owners take into account comparable recent lettings when reviewing the rent at their property, they also need to consider the costs associated with reletting (including a vacant period) if their tenant decides to move on. Factor in the risk of a new tenant perhaps not caring for your property as well as the current occupant, and it can often we worthwhile maintaining your existing tenant!

When properties enter the letting market, remember that the winter months are typically quieter than the buoyant summer months – even during boom times like 2007 and 2008 we find achievable rents from May to September to be up to 10% lower than what the same property could achieve in February. Tenants are currently not as prepared to commence immediately after inspecting and being approved for a lease as they were a year ago.

Consequently it is critical that your property manager begins marketing your investment before it becomes available. It is also then imperative that the marketing strategies be regularly reviewed throughout the campaign in order to maximise your chances of avoiding an extended vacant period. Presentation of your property and ensuring it is well maintained will help entice prospective tenants to apply, and it is necessary to be marketing within a realistic price range.

Cantwells Property have the exclusive advertising rights to the ‘Guaranteed Top Spot’ for properties for lease in Hawthorn, and can certainly try to obtain the rights if your property is in another area. For only $55 per week, your property can be viewed by all prospective tenants searching in a particular suburb – irrespective of other search criteria like size, price and property style, thus maximising the exposure of your property.

The team at Cantwells are striving to maintain market rental at your property – without compromising the quality of tenant. It is a delicate balancing act, and our specialist team of residential property managers are dedicated to getting the best results for you.

melbourne property market is in a strong upward growth pattern…

Surprisingly, even the media has come to the party declaring the Melbourne property market is in a strong upward growth pattern. We have seen through the first half of this year strength in the lower end of the market primarily driven by the first home buyers and investors. It seemed that any property under $600,000 this year has sold quickly and easily. The most notable change over the last 3 months is sales of properties over $1 million. Properties that through 2008 had been hard to sell have begun to gather momentum.

The biggest challenge for the real estate industry through 2009 has been maintaining stock levels. We simply can’t keep up with the demand from keen buyers.

Family homes have become the hot commodity with hard fought auctions and multiple bidders. Cantwells Property recently conducted an auction of a four bedroom Californian Bungalow at number 4 Kennealy Street, Surrey Hills fetching a result $165,000 above the reserve price and contested amongst 8 bidders.

Land has also gained strength with developers and builders looking to stronger economic growth and renewed confidence. It seems a little positive press goes a long way. Anything with prime land is now being looked at for development and new home sites. 25 Webster Street, Camberwell (off Warrigal Road) which was a dilapidated house on land of approximately 720 square meters sold recently through Cantwells Property to a builder for $950,000 after only six days on the market.

With a lack of property and an abundance of quality buyers in the market place, clearance rates are again back to the boom market time of 2007. We have consistently seen rates in the mid 80% range in the last months with a peak recently of 87%.

If you are thinking of selling or investing in more property, please don’t hesitate to contact Nick Todd on 0418 349 822 or Gerry Cantwell on 0418 100 136 for confidential advice. Please view our current residential sales listing of potential investments for your consideration.

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The end of the financial year has been and gone but many of us are still struggling to get all our paperwork together for our tax returns. One of the great services we can provide you is to hold your original statements and invoices here and send them through to you with your annual financial statement at the start of July each year… ready for tax time. We will email your statement each month so you know how your payments are made up but you don’t have to worry about filing them and losing receipts. Email us at property@cantwells.com.au with your name and property addresses and we will set it up for you.

Our residential sales list highlights a number of good investment properties we have as opportunities right now which you may want to consider…take a look and let us know if you would like further information to build your portfolio.