Michael Yardney<\/b><\/a> will talk about whether to buy a property with a tenant in place or not and Shannon Davis<\/b> outlines the 5 things tenants really hate.<\/p>\nToday in the show Ben Kingsley<\/b> gives some tips on how to find properties before they hit the market.<\/p>\n
Also Brad Beer<\/b> answers a question from Sonya who inspected some units under construction and was shown a depreciation schedule. Sonya wants to know how reliable they are and would it be risky using those estimates to calculate the units viability.<\/p>\n
And hear what a seasoned developer has to say about how to find a decent builder, someone you can rely on so that you can make sure the development you are about to undertake will be finished on time and on budget.<\/p>\n
<\/p>\n
Transcripts:<\/h4>\nShannon Davis<\/h3>\n
Kevin:\u00a0 <\/b>There was a saying \u2013 there still is, I guess \u2013 \u201cHappy wife, happy life.\u201d You can translate that through to investment property, too. If you keep a happy tenant, you\u2019re probably going to have a pretty well-maintained investment property. That\u2019s certainly the theme of our next chat, which I\u2019ll be having with Shannon Davis from Metropole Property Strategists and also Image Property in Brisbane.<\/p>\n
Good day, Shannon. How are you doing?<\/p>\n
Shannon:\u00a0 <\/b>Good day, Kevin.<\/p>\n
Kevin:\u00a0 <\/b>It\u2019s very important to have that good relationship with the tenant. What have you found are the things that tenants really hate that will turn them off?<\/p>\n
Shannon:\u00a0 <\/b>Definitely the biggest one would be poor treatment. I think there is an element of disrespect given to tenants sometimes, that perhaps property managers or real estate professionals feel that they work for the owner and don\u2019t have to treat the tenant with as much respect. That, coupled with unwillingness to resolve issues or making the invisible visible, are the things that really frustrate tenants.<\/p>\n
Kevin:\u00a0 <\/b>Yes. They are treated as second-rate citizens, aren\u2019t they?<\/p>\n
Shannon:\u00a0 <\/b>Oh, definitely. You cannot be a property investor without tenants, so in that respect we need every tenant we can, especially in a rising market right now where we\u2019re losing tenants to buying.<\/p>\n
Kevin:\u00a0 <\/b>I\u2019ve heard tenants complain about things like no feedback, being treated like they\u2019re second-rate citizens. \u201cI make a complaint, and I\u2019m just left hanging. I never hear anything.\u201d<\/p>\n
Shannon:\u00a0 <\/b>Yes, that \u201cleft hanging\u201d is a big one. Being ignored; timely responses. Even if it is taking longer than you need to resolve an issue, we need to keep them in the loop. \u201cThe owner is overseas at the moment. Once I have the response, I\u2019ll be straight back to you,\u201d or if a tradesman is waiting for a part. These are things that need to be explained.<\/p>\n
Kevin:\u00a0 <\/b>Of course, we\u2019ve got an obligation to make sure that the property is well kept and be on top of those maintenance requests and issues, as well, Shannon.<\/p>\n
Shannon:\u00a0 <\/b>Yes. Well-maintained, safe, and secure. Privacy is what they\u2019re after. If they\u2019ve rented a property in a certain state, and through disrepair or maintenance it\u2019s no longer in that state, then they\u2019re expecting \u2013 and they should expect \u2013 the right for that to be repaired. It\u2019s our obligation as owners and therefore the owner\u2019s representatives \u2013property managers \u2013 to fix those things. That\u2019s definitely a bugbear of tenants.<\/p>\n
Kevin:\u00a0 <\/b>You talked earlier about that being left hanging. I\u2019ve been a tenant; I know what it\u2019s like. There\u2019s nothing worse than being kept in the dark when just a simple email sometimes\u2026 You don\u2019t have to make a phone call.<\/p>\n
Shannon:\u00a0 <\/b>No, definitely. An email, a text message, just something to keep them in the loop of where it\u2019s at. They know that they\u2019re being appreciated and their issue is important to us.<\/p>\n
Kevin:\u00a0 <\/b>Another issue that I wanted to quickly talk to you about is rent rises. Is there any legislation saying how much the rent can go up by, and what\u2019s reasonable?<\/p>\n
Shannon:\u00a0 <\/b>They can definitely contest it on a market review. If it was over market review, it could go as far as QCAT or the Administrative Tribunal to have it heard. Rent rises are definitely another complaint of tenants.<\/p>\n
I think what happens mainly is it\u2019s just sent through the mail \u2013 \u201cHere\u2019s your rent\u201d \u2013 no consultation, no phone call to soften the blow. In some cases, there\u2019s no rapport with the tenant, so instead of the tenant signing back on at an improved rent, which would be in the best interest of the owner, they choose to pack up and go. Now the owner is faced with vacancy and the wear-and-tear that comes with another move-in, and of course, the next tenant might not be as a good character as the one we already had.<\/p>\n
Kevin:\u00a0 <\/b>It\u2019s difficult for a property manager to sit in the middle. Owners can reasonably expect for those rent reviews to happen, but sometimes it\u2019s easier for the property manager just to do nothing.<\/p>\n
Shannon:\u00a0 <\/b>Yes, and just say, \u201cLook, they\u2019re good tenants,\u201d or \u201cIt\u2019s just $10.\u201d There\u2019s nothing really scientific about those processes. A rent review is important. They don\u2019t always go up; you might have bought yourself into an area where there\u2019s such increasing supply that your rent is actually going down in a short-term period. It\u2019s important in those instances especially to try and keep your tenant rather than have them move out, test the market, and be in a lease situation that was worse than the previous one.<\/p>\n
Kevin:\u00a0 <\/b>When we were operating an agency, we had a good-sized rent roll, and one of the things that amazed me was if you don\u2019t treat tenants like tenants \u2013 in other words, treat them like human beings, just be nice to them \u2013 you\u2019d be amazed when you find out sometimes that they\u2019re actually investors themselves. Just because they\u2019re tenants doesn\u2019t mean to say they don\u2019t have property.<\/p>\n
Shannon:\u00a0 <\/b>Exactly. We\u2019re finding that more and more now, where people\u2019s first investment is actually an investment property, not a house or a home. People are getting married later. There are all sorts of reasons as to why that\u2019s happening.<\/p>\n
I think they\u2019re just chopping their nose off to spite their face. I think win-win is how best outcomes are done. We need a happy tenant in order to get the best solution for owners and the best results.<\/p>\n
Kevin:\u00a0 <\/b>Very good advice. Shannon Davis from Metropole Property and also Image Property Management. Thanks for your time, mate.<\/p>\n
Shannon:\u00a0 <\/b>No worries, Kevin. Any time.<\/p>\n
<\/p>\n
Ben Kingsley<\/h3>\n
Kevin:\u00a0 <\/b>Ben Kingsley joins me once again. Ben, of course, is the CEO and founder of Empower Wealth. They specialize in finding the best buys for their clients no matter where they are in Australia.<\/p>\n
One of the tricks is being able to find a property before it even hits the market. How do you go about doing that, and how do you make sure that you\u2019re not paying too much?<\/p>\n
Ben:\u00a0 <\/b>It\u2019s a good question, Kevin. I remember when I was 23 years old and I was just getting into the property space. I actually did a letterbox drop around the area that I identified that I wanted to buy in. I can tell you that I dropped about 600 pamphlets into different letterboxes, saying, \u201cI want to buy your house,\u201d and I had two people call me and say, \u201cWho are you? What do you do?\u201d That\u2019s the hardcore approach.<\/p>\n
There are a couple of hardcore approaches. The first one is that letterbox drop, and the second one, which is a little bit more adventurous, is looking at family courts and seeing some of those divorce settlements going through. Those usually result in a sale transaction of the family home.<\/p>\n
They are certainly some more adventurous ways, but the traditional way that you\u2019re going to find off-markets and what we call pre-markets is just talking to the agents in the area. Ultimately, they\u2019re the ones who are still going to have control of the majority of buyers who are coming to the marketplace.<\/p>\n
What I talk about when I say a pre-market sale is I\u2019m talking about the agents who are just about to bring a listing on, or they\u2019re just signed up, and the boards haven\u2019t gone up, and the photos haven\u2019t been taken. Usually in those cases, the agents will allow seasonal buyers such as buyer\u2019s agents and the like the opportunity to go through the property, or they might have also a VIP list of clients ready to buy that they send through the property.<\/p>\n
You don\u2019t want to be a stranger to the local agents in the area that you\u2019re looking to buy in. It doesn\u2019t necessarily mean you have to tell them exactly what price you\u2019re ready to pay \u2013 we need to keep some of our tricks up our sleeve \u2013 but ultimately letting them know that you\u2019re an active buyer in the area is really important.<\/p>\n
Kevin:\u00a0 <\/b>It\u2019s long-term, isn\u2019t it? I talked there in the title about trying to buy a property before it actually hits the market. I guess, there\u2019s no such thing really, because it only ever hits the market when you have a willing seller. I guess the trick is to be there when they make that decision.<\/p>\n
Ben:\u00a0 <\/b>Yes, it is. Ultimately we still hear stories about people getting an opportunity to buy the property down the road because they know the local neighbor or they\u2019re involved in the golf club, or the RSL, or something like that. Someone wants to sell the property, and they\u2019re thinking, \u201cI\u2019ll cut the agent out of that conversation.\u201d<\/p>\n
But in terms of those properties, those transactions are very small and few and far between. The reason for that is if I was wanting to sell my property, I want to get the best price possible. Usually the best way to do that is to get a marketing campaign behind me. It\u2019s not easy to sell a secret, so you want to get the message out there to market.<\/p>\n
Coming back to the point I was making, if you really show that you\u2019re a keen buyer in a particular market, and you\u2019re talking to the local agents in that area, they\u2019ll get you through a property very quickly, because they also want to show their vendors that they do have buyers ready to go.<\/p>\n
Kevin:\u00a0 <\/b>The great agents, no matter where they are, will be very quick to tell you that listings don\u2019t just come on and they get them; they actually put a lot of time and effort into getting them well before they come onto the market. You just have to be patient, do your homework, and as you said, spread that network far and wide.<\/p>\n
Ben:\u00a0 <\/b>That\u2019s right, Kevin. Once you identify the area that you want to buy in \u2013 coming back to the point we made \u2013 it is about talking to those agents, and finding those agents that have got the most listings, and building a relationship with them to see when the right asset does come up, you can strike at it.<\/p>\n
Kevin:\u00a0 <\/b>Ben Kingsley from Empower Wealth. Thanks for your time, mate.<\/p>\n
Ben:\u00a0 <\/b>Pleasure, Kevin.<\/p>\n
<\/p>\n
Michael Yardney<\/h3>\n
Kevin:\u00a0 <\/b>No doubt when you\u2019re buying an investment property, one of the major considerations is the tenant, of course, because without a tenant, there\u2019s no cash flow. But is it best to buy a property with a tenant or one that\u2019s vacant? Let\u2019s get a view on this.<\/p>\n
Michael Yardney is from Metropole Property Strategists. That\u2019s a question I\u2019ll put to you, Michael. Would you buy a property with a tenant in it?<\/p>\n
Michael:\u00a0 <\/b>Hi, Kevin. The answer is yes, I would. I like them, but I\u2019m also very cautious about them.<\/p>\n
Kevin:\u00a0 <\/b>Why do you like them particularly?<\/p>\n
Michael:\u00a0 <\/b>We\u2019ve found that a lot of the off-market properties we get offered at Metropole have got tenants in place, because the agents can\u2019t always run a normal marketing campaign. They don\u2019t usually run [0:37 inaudible]<\/b> campaigns with a tenant in place because a tenant doesn\u2019t make it very easy to get access, and sometimes they\u2019re in such poorly kept conditions that they\u2019re not even prepared to run a normal campaign. If you can see past that, Kevin, you can see the opportunities, there are some good buys out there.<\/p>\n
Kevin:\u00a0 <\/b>What are the things you would look for that would indicate it\u2019s a good buy?<\/p>\n
Michael:\u00a0 <\/b>First of all, tenant or no tenant isn\u2019t the main question. It really is is it the right property in the right location with the right sort of floor plan? All the things we\u2019ve talked about in many of our other conversations have to come into play. But if everything else is right, then I look for the details of the tenant\u2019s lease. Remember, the lease stays on. Even though the ownership changes, you take on any written obligation that the previous owner had, so you have to look at that pretty carefully.<\/p>\n
Kevin:\u00a0 <\/b>Apart from that, do you look at things like how long the tenant\u2019s been there? That\u2019s obviously going to be an indication, maybe, about how long they\u2019re going to stay.<\/p>\n
Michael:\u00a0 <\/b>That\u2019s a really good point, Kevin, because you want them in there long enough to make it feel like home and they\u2019re going to stay. On the other hand, you don\u2019t want them to be in there that long that the previous owners have let the rent slip back and haven\u2019t caught up to date.<\/p>\n
I\u2019ve found there are a number of properties where the rent is substantially below market. On the one hand, that\u2019s an advantage, because it may put off other potential investors, but on the other hand, if the tenant isn\u2019t paying the right rent and you increase it, it\u2019s possible you could lose them.<\/p>\n
Kevin:\u00a0 <\/b>Michael, if a property ticks all the boxes and the tenant actually looks good but is simply underpaying, would you still go ahead and maybe look at some sort of a step payment to bring it up to market?<\/p>\n
Michael:\u00a0 <\/b>Kevin, rather than pushing it up in one big lump and losing the tenant, and having a couple of weeks\u2019 vacancy, and having to pay the property manager their normal fee for renting the property, yes, it makes sense to maybe do it over a period of time.<\/p>\n
You can come to an arrangement where you increase the rent now, and maybe again in six months, and again in a year\u2019s time, giving them evidence that, \u201cYou\u2019re paying below-market rent, but I recognize that you\u2019ve been a good tenant, so I don\u2019t want to disadvantage you.\u201d Definitely make it a win-win for both.<\/p>\n
Kevin:\u00a0 <\/b>If a property is under-performing in that way, is that a poor reflection on the property manager? Should that be an indicator, Michael?<\/p>\n
Michael:\u00a0 <\/b>You don\u2019t know the story. Was it the previous landlord who was scared to push up the rent? Was it the property manager? But remember, you don\u2019t inherit the property manager with the property. Check them out. Make sure they\u2019re going to do a good job for you. If not, you can always swap property managers to somebody you\u2019ve already been working with.<\/p>\n
Kevin:\u00a0 <\/b>When the property does actually change ownership, the agreement with the property manager becomes null and void?<\/p>\n
Michael:\u00a0 <\/b>It depends upon which state you\u2019re in. The property manager has an agreement with the owner, the landlord, and that then gets transferred to the new owner, but it actually isn\u2019t in their name, so you really do have to sign a new agreement.<\/p>\n
Kevin:\u00a0 <\/b>Are there any other additional agreements that you should be aware of that could get you in hot water?<\/p>\n
Michael:\u00a0 <\/b>You should ask about them. You should look for them, because sometimes there has been an agreement by the previous owner to improve the property, to repaint it, to put in new carpets, to do things that if they\u2019re in writing, you may be obliged to follow them up. It\u2019s best to ask those sorts of questions.<\/p>\n
Kevin:\u00a0 <\/b>The bottom line, Michael. What is it?<\/p>\n
Michael:\u00a0 <\/b>Having a tenant in place is nice. It gives you that shorter vacancy upfront. You don\u2019t have to have a vacancy or pay realtor letting fees. But it should not be enough to sway you, but of course, it shouldn\u2019t dissuade you either. The most important thing is to own the right property, because that\u2019s what\u2019s going to be there in the long term. The tenant won\u2019t, Kevin.<\/p>\n
Kevin:\u00a0 <\/b>Michael Yardney is from Metropole Property Strategists. Follow Michael, too, on his very popular blog site, PropertyUpdate.com.au.<\/p>\n
Michael, thanks for your time.<\/p>\n
Michael:\u00a0 <\/b>My pleasure, Kevin.<\/p>\n
<\/p>\n
Brad Beer<\/h3>\n
Kevin:\u00a0 <\/b>I had a question from a listener during the week who writes, \u201cI inspected some units currently being constructed and was shown a depreciation schedule. The agent said it was just an estimate. How reliable would it be, and is it risky using these estimates to calculate the unit\u2019s viability?\u201d<\/p>\n
To answer that question, a man who knows all about tax depreciation schedules, Brad Beer from BMT Tax Depreciation. Good day, Brad.<\/p>\n
Brad:\u00a0 <\/b>Hi, Kevin.<\/p>\n
Kevin:\u00a0 <\/b>Sonia\u2019s question there, is that something she should be cautious about?<\/p>\n
Brad:\u00a0 <\/b>It\u2019s an interesting question. As quantity surveyors, we do a lot of estimates of what sort of depreciation might be available. The important thing is looking at who it\u2019s being prepared by. Has the builder prepared it? Has a specialist quantity surveyor prepared it? What exactly the numbers are made up of. Have a look at it.<\/p>\n
Now, we have calculators on the website you can use to check against. You can talk to us or someone who\u2019s reputably doing depreciation. It should have a minimum and maximum range of depreciation potentially available.<\/p>\n
Obviously, it\u2019s an estimate. When we\u2019ve done that as an estimate, we don\u2019t have all the information. But we\u2019ve done a lot of depreciation schedules, so if we\u2019ve done it, and we know what we\u2019re doing, we should come up with numbers that you should be able to rely on being pretty close to the truth.<\/p>\n
Using the minimum or a bit less than the minimum to be really safe is the thing to do. Making sure it\u2019s prepared by someone who knows what they\u2019re doing is the important thing.<\/p>\n
Kevin:\u00a0 <\/b>Are these depreciation schedules, or the supply of these, regulated in any way, Brad?<\/p>\n
Brad:\u00a0 <\/b>The regulation is not very heavy as far as an estimate like that. The costs that are used for the purpose of depreciation \u2013 a quantity surveyor\u2019s cost \u2013 will be acceptable. Sometimes a thing to be a little bit wary of is when it has an agent or someone who is selling you the property. It\u2019s probably in their interest to make the numbers look high, so you really want to double-check it or make sure it\u2019s done by a reputable company that\u2019s not prepared to move the numbers to help sell the unit. That\u2019s the thing to be really careful of.<\/p>\n
Kevin:\u00a0 <\/b>How would you check out their credibility? Go to their website?<\/p>\n
Brad:\u00a0 <\/b>Go to their website. Ask your accountant, \u201cHave you used their report?\u201d Have the accountant have a look at that. If it\u2019s not done by a depreciation specialist, get a depreciation specialist to actually have a look at it.<\/p>\n
Kevin:\u00a0 <\/b>That\u2019s actually a very good point \u2013 going to your accountant \u2013 in all of these things. If you\u2019re buying any property, you should always be checking with your accountant and your solicitor, and running it by them anyway.<\/p>\n
Brad:\u00a0 <\/b>If they\u2019re an accountant who deals with property investors \u2013 and if you\u2019re a property investor, you probably want that to be the case \u2013 they will probably have specialist depreciation guys that they regularly do use. Maybe the accountant would want to ask their contact, just to get a double-check on that to make sure it\u2019s not something done by the builder or something to make it look more than it really is going to come out at.<\/p>\n
Kevin:\u00a0 <\/b>Is it reasonable that someone would want to get their own depreciation schedule done even if they are looking at buying? Would that help them substantiate those figures, Brad?<\/p>\n
Brad:\u00a0 <\/b>That\u2019s most definitely the certain way as a potential buyer of any property, not just one that\u2019s new that has a depreciation estimate done. There are calculators on websites, and they\u2019re free. You can go in and use them to check and see. Put some of the information in yourself, and see if it comes out close to what\u2019s been provided.<\/p>\n
You can always talk to my guys about your particular property, and send us some photos. We\u2019ll have a discussion and give you a rule of thumb based on what we can see. We don\u2019t charge for that to have a bit of a look at it.<\/p>\n
If you want to be certain, you get one done properly, absolutely, but normally it\u2019s done after the fact. We can get pretty close with an estimate, and we\u2019ll give you a range. Whenever you\u2019re plugging in and crunching your numbers on property, it\u2019s always good to be conservative to start, and then at the end of the process anything else is a bonus.<\/p>\n
Kevin:\u00a0 <\/b>Very good advice from Brad Beer, one of our recommended suppliers. Of course, all BMT Tax Depreciation\u2019s details are on our website, and you can check out their featured channel, as well. Lots of great information there for you, and in fact a link straight back to their site, as well, if you want to check that.<\/p>\n
Brad, thank you so much for your time. We\u2019ll catch up again soon.<\/p>\n
Brad:\u00a0 <\/b>Great. Thanks, Kevin.<\/p>\n
<\/p>\n
Nhan Nguyen<\/h3>\n
Kevin:\u00a0 <\/b>It\u2019s a conversation that comes up reasonably often in Real Estate Talk, and that is, \u201cHow do I get a decent builder?\u201d and even, \u201cHow do I get a decent tradie?\u201d Nhan Nguyen from Advanced Property Strategies joins me. This is something, I guess, you confront quite often. Do you also have to help some of your clients with this, as well, Nhan?<\/p>\n
Nhan:\u00a0 <\/b>Yes, I do. I\u2019ve built over 20 houses or so as a developer \u2013 not as a builder, but organized houses. Yes, often my clients who want to build a house ask me those questions, and I help them through the process of choosing the right builder.<\/p>\n
Kevin:\u00a0 <\/b>Let\u2019s learn from your bitter experience. Tell me what tips you have for us.<\/p>\n
Nhan:\u00a0 <\/b>Yes, there\u2019s been a lot of good experience and a lot of bad experience, as well, like you said. The main thing, firstly, to start off with is trying to fit the builder to what you\u2019re wanting to do, because there\u2019s obviously a handful of projects you could do.<\/p>\n
You could do what\u2019s called a project home, which is a basic type of build, and there are what are called project home builders who build 300 or 400 homes a year. The other type of builder is what we call an executive builder. They do more of an up-market, up-spec type building. Then there\u2019s the high-end, and there are the units and townhouses type builders. There are about three or four types of builders, and firstly you need to choose what type of builder suits your project.<\/p>\n
Kevin:\u00a0 <\/b>It seems to me one of the major concerns with people is their builder is either not going to go out of business or is not going to misuse the funds. Would I be right in assuming that some of those big builders, those project builders, are probably going to be more reliable, Nhan?<\/p>\n
Nhan:\u00a0 <\/b>Yes and no. I agree with you. The things that concern me when I\u2019m talking to a client or an investor about choosing a builder is definitely, one, going broke, or two, mismanaging the funds. That\u2019s not to be really negative as such; it\u2019s more so to deal with reality. There are many builders out there, and a small portion of them don\u2019t know how to run a business, and as a result, that affects you as a client.<\/p>\n
Kevin:\u00a0 <\/b>Great builders but poor businesspeople.<\/p>\n
Nhan:\u00a0 <\/b>Exactly. Just because you know how to build a house and use a nail gun doesn\u2019t mean you know how to manage cash flow, staff, approvals, and juggle it all at the same time.<\/p>\n
Kevin:\u00a0 <\/b>Let\u2019s move on to a couple of the other tips then.<\/p>\n
Nhan:\u00a0 <\/b>One would be that ideally the builder has been around for a reasonable amount of time \u2013 five, ten, 20 years \u2013 and doesn\u2019t have a lot of debt in their business. It\u2019s hard to know whether they have a lot of debt, but you can watch them over a period of time or at least know that they\u2019ve been around for at least five to ten years.<\/p>\n
Another thing that you want to watch \u2013 if you can, if you find this information out \u2013 is to make sure their growth hasn\u2019t been too erratic.\u00a0 When any business grows, as you might know, there are constraints. You have to put more staff on, more office, more expenses.<\/p>\n
On some websites \u2013 in Queensland, we used to call it the Building Services Authority, the BSA; they\u2019ve changed their name now \u2013 you can search the builder\u2019s history and find out if they\u2019ve had complaints, as well. That\u2019s another way to do research. Find out if they\u2019ve had complaints and been served notices of complaint for bad construction practices.<\/p>\n
Kevin:\u00a0 <\/b>I believe there are similar sites in the other states, as well, where you can check the stability of the builder.<\/p>\n
Nhan:\u00a0 <\/b>Exactly. It comes down to customer service. At the end of the day, it is a business. Whether you own a restaurant or a building business, it\u2019s customer service. If people complain, there\u2019s a reason for that. People don\u2019t just complain for the sake of it.<\/p>\n
Erratic growth is definitely something I\u2019d check out, and turnover. If a builder is growing too fast in a short period of time, especially in the first one to five years, it can be very detrimental to you, especially if they\u2019re using your money to pay for projects they did one to two years ago.<\/p>\n
Another way I suggest with any business is to go and get referrals and references from people who built one, two, three years ago with them. When you finish a building, there\u2019s generally a six- to 12-month warranty period, and the builder gets called back to finish any things, like leaking taps, or materials that have been used improperly, or render falling off. If you speak to customers who have used the builder before, then you get a realistic idea of do they answer the phone, do they return your phone calls, and do they give good advice?<\/p>\n
Kevin:\u00a0 <\/b>Just getting back to an earlier point you made there about the BSA in Queensland \u2013 the Building Services Authority or whatever they\u2019re called now \u2013 on its own, that\u2019s not a good enough check. I\u2019d suggest you should be doing all the checks you\u2019re talking about. Because on that site, I\u2019ve actually seen builders who have a very bad reputation, and they\u2019ve remained on that site. You shouldn\u2019t just take it at face value.<\/p>\n
Nhan:\u00a0 <\/b>Correct. I absolutely agree. These things are all-encompassing. You need to do everything you can to do that research. A big part of it doing your research before you actually go out and buy a block of land, and doing that part-and-parcel. Rather than just buying a block of land, and saying, \u201cYes, I\u2019m going to go build a house,\u201d you have to do the research on the house builder during the process that you do the land acquisition and business planning, as well.<\/p>\n
Kevin:\u00a0 <\/b>Very good advice, Nhan. Thank you very much for your time. Nhan Nguyen from Advanced Property Strategies. Thanks, mate. We\u2019ll catch you again soon.<\/p>\n
Nhan:\u00a0 <\/b>Thanks, Kevin.<\/p>\n
<\/p>\n
Peter Carter<\/h3>\n
Kevin:\u00a0 <\/b>Alarm bells should be ringing for all investors if you have an investment property and there\u2019s a possibility that you may actually have lead paint. There was a recent case against an owner of a property by a tenant because they were concerned about the concentrations of lead in the paint inside the house.<\/p>\n
Peter Carter has been following this. Peter is from Carter Capner Law, and he joins me. Peter, give me the background of this. How widespread is the problem?<\/p>\n
Peter:\u00a0 <\/b>Kevin, this involved a home at Zillmere where the tenant had a long list of complaints that the agent hadn\u2019t fixed from several months after moving in. But the most serious of the complaints was flaking lead paint, which the owner was compelled to remove promptly, and because that owner didn\u2019t, there was financial compensation payable to the tenant.<\/p>\n
Kevin:\u00a0 <\/b>Do you know how much that was?<\/p>\n
Peter:\u00a0 <\/b>It involved a reduction in rent over the period of her occupation, and it allowed her to break the lease. It was $2500.<\/p>\n
Kevin:\u00a0 <\/b>Zillmere, you mentioned there, is a suburb in Brisbane. Is this confined only to Brisbane, or is it around Australia?<\/p>\n
Peter:\u00a0 <\/b>The issue is anywhere where lead paint can be found. I imagine certainly in Queensland that historically problems resurface from time to time, and it\u2019s something that all landlords should be aware of. It\u2019s something that all agents should be aware of, because it\u2019s a precaution that they can easily take to determine whether that has existed in the home they\u2019re about to let out to tenants.<\/p>\n
Kevin:\u00a0 <\/b>It\u2019s pretty easy to do, because you can get a lead-detection kit, which I think only costs $10 or $15. You can get it from all of the good hardware chains. Are you suggesting that this is something that all landlords and all agents should be testing for?<\/p>\n
Peter:\u00a0 <\/b>Landlords owe a duty to ensure that the premises are habitable and safe at the time they let the home and to keep them in those conditions. This is a simple, easy test, as you say. It should be on the landlord\u2019s list as a must-do before each tenancy.<\/p>\n
Kevin:\u00a0 <\/b>We\u2019ve seen the fallout over the years in recent times as to what happened with asbestos. This could be the new alarm on the horizon.<\/p>\n
Peter:\u00a0 <\/b>It certainly could be. It\u2019s a sleeper. It\u2019s like plate glass not being to current standard. It\u2019s the sort of thing that needs to be thoroughly investigated. It\u2019s a real problem. It\u2019s for people\u2019s safety.<\/p>\n
Kevin:\u00a0 <\/b>This is one of the things I think you should be checking when you do have a managed property with your agent that they\u2019re up to date on all this legislation and that they are in fact doing all these things, because at the end of the day, it is the owner of the property who has to bear the liability for this.<\/p>\n
Peter:\u00a0 <\/b>That\u2019s right. It\u2019s the owner who bears the financial loss. It\u2019s the owner against whom court orders will be made and against whom health department investigations will be undertaken, so it\u2019s a real issue.<\/p>\n
Kevin:\u00a0 <\/b>Peter, thank you for joining us today and bringing this to our attention. Peter Carter is from Carter Capner Law. Thanks, Peter.<\/p>\n
Peter:\u00a0 <\/b>Thanks, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"
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