Thursday, June 26, 2014

End of financial year, it’s time to review your investment resolutions!

The New Year brings us a chance to reflect and set resolutions for the upcoming year. For investors, the end of financial year is no different. 

The final days are upon us and businesses and organisations have had their head down preparing for a number of months. Property investors are also caught in the race to 30 June as they look to make the most of tax benefits available to their rental property portfolio.

For the seasoned investor, running around organising depreciation schedules on hot water units and air conditioners, arranging any last minute repairs and pre-paying expenses such as water and council rates is common practice. For the new investor, your property manager can become your best friend as you question what to do leading up to the end of financial year.

This time of year is when your  investment strategy becomes front of mind as your accountant prods and probes what income you have derived, what capital expenses you've incurred and what items can be depreciated. Speaking with a number of clients over the last six to eight weeks, each landlord has different priorities, and therefore very different strategies. 

Some landlords are solely looking for capital growth as their investment hold is heading to the tail end and they plan to realise the gain within the next 2-3 years. This means any substantial capital upgrade to the property is off the cards and as a result, the property may attract a diminishing rental income as tenants are becoming increasingly attracted to more 'modern' homes. So long as it's in the plan, there's less angst if the rent takes a hit.

Other clients have a 10-15 year+ investment forecast and these investors are building their portfolio and actively looking for opportunities in the market where there is capital growth potential, but also steady returns. They are not afraid to spend money on preventative maintenance throughout their tenancies and look for recommendations from our team. They see huge value in the ongoing upkeep of the property to ensure that rent remains consistent and the property remains attractive in the market, whilst minimising the risk of extended periods of downtime between tenancies. 

So, what do we see? 

In our business we see hundreds of investors making decisions every day, and those with a clear approach avoid the reactive spending that stems from being 'caught in the middle'. 

Strategic short term investors will, where possible, minimise their spend on capital upgrades when they don't intend to hold the property for long. Overcapitalising is a common risk these investors face. Those looking to invest long term consciously spread out expenditure by completing preventative maintenance, therefore avoiding being lumped with capital expenses in one particular year. It's the investors in the middle zone, without a clear direction, that can feel out of pocket or frustrated at times.

Knowing your investment approach is key, and for young or new investors, this is something to consider early in the piece. From my experience, it's absolutely critical to know this before you decide to purchase a property. The type of property you buy, (whether it's a new build, unit/townhouse or an old character home) plays a large part in your strategy. It helps set the framework and can often determine if you will be successful in achieving your investment outcomes.

Whilst each investor might have a different approach, they all have one thing in common... they've invested in the property market. Adelaide has recently been flagged 'the investment hotspot' so there's no time like the present to jump in! With the new financial year almost upon us, take the time to set new financial resolutions and review your investment strategy. Happy New Year!

Regards,
Suzannah Toop

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Friday, June 20, 2014

Online, the hottest real estate turf... but has anyone thought about the client?

Both traditional and social media has been buzzing in the real estate world this week, as realestate.com.au (REA) released their pricing structure for the new financial year.

On the 1st July, REA is rolling out changes to the way clients will be charged for listings on their site. Clients will soon be charged different amounts for their property to appear on the site according to which suburb the property is in.

This new structure has become a red hot topic and caused PLENTY of controversy in the real estate space Australia wide. CEO of Domain.com.au and REA's biggest competitor, Antony Catalano, added fuel to the fire in recent communications sent to Domain clients. The piece called on real estate agents to 'unplug REA' and revealed a potential 60% price rise to display properties on REA, depending on the area you live in.

Tension has run high, with social media providing a platform for individual agents to rally against realestate.com.au - and it appears to be gaining momentum. The Facebook group 'Real Estate Agents Rebel - Enough Is Enough' was created last week and in less than 3 days received over 2,000 followers – all joining in on the conversation.

But are frustrated agents missing the point? Agents are involved with REA's product because every day of the week we are out selling it for them, yet we have absolutely no control over the offering, which can be frustrating. And yes, REA have a track record of changing the rules and can be extremely 'heavy' in the way they approach issues, which can also be frustrating. Notwithstanding these issues, I do believe the current pricing hysteria is unproductive and not what agents should be focusing on...

Realestate.com.au, like any business, has the right to charge what ever they like for their product. It's their business and it's up to them how they run it. But, it will be the customer, I believe, that will ultimately determine if they continue to support REA or not. If the customer sees value in REA's product, at whatever price, they will be the ones who decide if they want to purchase the product or not.

The big question to me is... 'Who is REA's customer?? - Is it the Agent? Is it the vendor?'

I have a theory: With the REA pricing structure changes, whereby the property determines the price paid, REA's customer essentially switches from agent to seller. The agent needs to back out of the way, and let Realestate.com.au stand alone. If a seller wants their product, then they can have it. If not, then no problems - just like advertising in the paper, the seller gets to make the choice.

Surely, our job as real estate agents is to provide the best service and advice we can to our clients, not get hung up about things that we can't control. Our job is to know all the marketing options available to our clients and when to use them. Agents need to understand and explain options clearly, outline benefits and effectiveness and then work together with clients to construct a cost effective marketing campaign that's most appropriate for their particular home. This may or may not include realestate.com.au, The Advertiser, SALife or one of the many other options.

REA's differential billing puts sellers in the driver's seat, the cost now depends on where they live, and it's a whole new ball game. As online products and prices become significant costs to the seller, the time has arrived for online platforms to be seen as a serious investment in the sale process, and should be treated just like the decision on newspaper advertising. Online portals need to earn their right to customers' property, and no longer just be a given.

This price change and online shake up couldn't have come at a better time for us, given Toop&Toop are well down the track of our own exciting online innovations. We have seen this coming. Our clients will have more options than ever before, cost effective and sophisticated selling, giving a serious advantage over competing properties.

Marketing is our thing, sellers and landlords, you are our customer...we think about you all the time, so leave the worrying to Toop&Toop... and let us make the process as simple as we can for you.

Regards,
Genevieve Toop

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Thursday, June 12, 2014

Simple & Complex

Keeping things simple can be extremely complex.

This week I was chatting with my wife, Sylvia, and she was fired up about how damn complicated things seem to have become in real estate. Buying or renting a property should have become easier with new technology and devices, like iPads and smart phones. After all, we would never have dreamt of having tools such as these to help sell houses 30 years ago.

To back this up, Sylvia, the girls and I have spent the past two years reorganising and simplifying our business. We've stripped unnecessary processes and procedures that have accumulated and gone unchecked for 25 years, just stuff.... while from a customer's perspective, things have continued to become more complex. It seems the industry, with all the new technology and legislation changes, has made life increasingly complex for buyers, investors and sellers. 

Sylvia argues that surely we can use our skills to make property simple again! 

It reminded me of an experience I had many years ago. It related to my first NEW car when I was 21, a Black Datsun 280C with chrome spoke wheels... it was a fully optioned luxury car. Way back in 1978, Datsun were a seriously innovative company and I proudly drove my mobile 'gadget machine' until around 1981. At the time I worked for Kain & Zecevich where the owners, Michael and Panto, drove twin S class Mercedes Benz cars. One was gold, the other green. I was in awe of those guys, and the classy cars they drove.

My Datsun had every gadget you could imagine. It had a sun roof, cruise control, variable speed windscreen wipers and dials and shiny buttons all over the dash, I was too cool for school. Michael was about to trade his 5 year old Mercedes, I always loved that car and you guessed it, I bought it. I didn't test drive it, nor did I ask any questions about it. I had been driven around in it so often that I just wanted it... while not really knowing a thing about it.

Well, I have never forgotten my first few days in that gold limousine. What immediately struck me was the lack of gadgets! Even though I had been a passenger in the car often, it all looked so different actually owning and driving it. The dash had no dials, it was plain with no shiny buttons jumping out at me... the simplicity was disturbing. I actually thought I had purchased a car with no cruise control or variable wipers and I couldn't find the sun roof opener! I was even questioning where the fuel cap, boot release and all the buttons were... and did it even have locks on the boot and the fuel lid?

So I finally conceded and resorted to reading the car's instruction book... big call for me!

The ability Mercedes Benz has to deliver innovative features effortlessly to enhance the drivers experience and make all their features just happen around me would have involved enormous investment in technology and engineering... I have never forgotten that life lesson. 

Real estate has become too complex, Sylvia is spot on.  It's time we simplified it. Like my purchase of the Mercedes, until I drove it and owned it, I had no awareness of the differences between sophisticated innovation, and bling. It's not until you buy, sell or rent a property, that you really get any understanding of the difference between agents.

It's proving extremely challenging to simplify your buying and rental experience. Over the years, new laws, new complex marketing channels and new customer demands have left professional agents caught up in a complex industry. An original model T Ford is simple, but we are not talking about old fashioned real estate agents who offer nothing... we are talking about the challenges for the sophisticated new breed of agents.

Well the good news is that Toop&Toop have already begun rolling out 'Operation Simplification' for our customers and clients. We hadn't consciously set out to do this but in fact the process was well underway, and Sylvia's comments merely put the real issue into perspective. We are not far off another release of our incredibly simple web site and 'Operation Simplification' will ultimately benefit the customer.

We are already famous for our innovations, and our online marketing is recognised as the best in the nation. Now it's time to become famous for simplifying sophisticated real estate. Toop&Toop want to become the easiest agent in Australia to work with. It's our next step.

The world is complex enough, without your agent adding to it.

Regards,
Anthony Toop

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Wednesday, June 04, 2014

Bored, ready for a new challenge?

I'm hearing stories of grad programs having up to 400 applicants for just three positions. Headlines this week have revealed that as a result of the new budget 30 per cent of university graduates will be out of work for a minimum of four months after finishing their degree. Redundancy for professional firms is rising and we are clearly in a volatile and strange labour market right now.

Well, perhaps we can change your thinking. There are job options that you may have never considered!

Did you know that any of you can become a property manager or work in the property management field? You need only have great character, plus our awesome on the job training.

Whether you are currently employed in the real estate or building industries, or perhaps a lawyer, accountant, receptionist, hairdresser, teacher… the question is, are you getting a buzz out of your current work? Is your adrenalin still running each day?  Or, are you simply going through the motions where every day seems the same as the last. Do you have talents and skills to offer that just never get tapped into?

Before the passion to excel in your working life is lost forever, I challenge you to think about applying to work in our incredible team. We have positions for really motivated people who are smart and passionate. Now that Genevieve and Suzannah are getting stuck into our business, Toop&Toop has the energy and excitement of a 'start up' yet the resources and security of a nationally recognised and highly awarded 30 year old business. 

Times are changing, yet some things never change. Excited, positive people who are proud and passionate are in demand.

Property... real estate, it's a crazy business. We deal with different situations and people every day; we have business people, mums and dads, singles and the elderly. We deal with fantastic people, we deal with unreasonable people, celebrities, politicians, as well as the rich and famous, and the poor... it is an industry of colour and no two days are ever the same.  

Unlike many 'jobs', there are high levels of personal accountability within our business, and there's also structure and order. At the end of every day, it's an amazing and rewarding feeling to have accomplished a great day's work.

In our industry there are highs and lows, and career paths with salaries ranging from the lowest to the highest levels... Real estate is a seriously addictive occupation for those who like being with people, and thrive on challenges.

It's an industry not suited to many. At Toop&Toop we make it a profession to strive to be the best in the country at what we do. We are specialists, we know what we want to achieve and it's a place where no one remains employed for long if they are just mediocre.

We have very cool people, including our Toop Wellness Centre manager, our 3 full time IT programmers constantly breaking new ground with online marketing, our videographers, photographers, editors, and graphic artists. This is an amazing and diverse environment and this is no ordinary real estate agency.

So, we want people who love being challenged, who want to bounce out of bed in the morning and who once hooked, can't wait to get back to see what each day will bring. We want people that thrive on challenges, yet are organised and can manage time. We want people who can make a difference to other people's lives and want to be in a business that has a culture of excellence and where nothing short of your daily best is good enough. We want people who want to be the best they possibly can be.

This is a career… This is Toop&Toop. If you would like to find out more information, please contact our HR manger, Sarah Williams: sarah.williams@toop.com.au

WARNING: Real estate is seriously addictive...

Regards,
Anthony Toop

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