November 2018 – The Hopkins Group

Share house survival guide

Posted on 27/11/2018 by daniel-admin

When you’re young, studying or at the start of a career, living on your own is usually not an option. Often you’ll be living on a shoe string, especially when pays aren’t rising as quickly as rents. So where does that leave you? Well, if living with family just a little longer isn’t an option, then share housing is usually your next best bet.

Sure, share housing has its reputation – it can be fun, crazy and frustrating – but despite all the housemate horror stories you hear, it’s really not all bad! To help you make the transition as easy as possible, here are the top three tips I’ve picked up along the way.

1. Splitting expenses is easier with apps

Budgeting for household expenses like cleaning supplies, communal food, bills etc. can be tedious – but thankfully, there are apps out there that make things easier! To easily keep track of things, my housemates and I use an app called Splitwise. When expenses come up we just enter it into the app and divvy it up accordingly. For example if I go out to buy cleaning supplies, I take a photo of the receipt and put the total in the house group. People can then pay when they have the chance, and we know exactly who owes what and to whom. It’s great for keeping those ‘forgetful’ housemates accountable.

2. Don’t forget to budget for bills and rent

It sounds simple – but if you don’t budget, it’s really easy to find yourself short when the bills are due. If you get paid on a weekly or fortnightly basis, it may seem like you have more spare cash than you actually have. One rookie mistake I made early on was not setting aside money for my bills or rent. It only took one week of eating beans and rice to realise maybe I should put some more thought into were my money goes.

A simple way to make sure bills and rent don’t creep up on you is to create a budget and stick to it. In an ideal world, you should know where you money goes and know when not buy so much beer. To help manage my slightly irresponsible spending habits I keep a second bank account open for all my bills. Each pay, I put a set amount into my billing account before I do anything else. At the end of the month I then have more than enough to pay my rent and when a bill comes up I don’t even have to think about it, everything I need is in my billing account. This leaves me free to do whatever I want with the rest of my money; good or bad.

While this system works well for me at the moment, it’s also great to know that when I’m ready to get a little more serious about understanding my spending habits, things like The Hopkins Group Money Master program exist. Money Master gives you the power of the Xero Cashbook platform, linking with your bank accounts and budgets to shine a spotlight on what you’re spending and where you might need to cut back. You can learn more about Money Master here.

3. Communication is key

Having open lines of communication with your housemates is the make or break of any good share house. How this is achieved varies from place to place; some have house meetings, others have notice boards, but my place has a group chat set up on our phones.

We all live busy lives, so when we need to sort things out the group chat helps immensely. From finding out who will be home for Border Security night, to discussing the need for a new vacuum cleaner and uncovering why the electricity bill so high this month, the group chat keeps us all on the same page and helps negotiate the larger house expenses.

If you’ve never lived in a share house before, it can be an equally exciting and scary idea to get your head around – and while I can’t help you figure out who keeps eating your food, I do hope these tips will help you start your first foray into the life of renting on the right foot! And who knows – once you’ve mastered budgeting in a share house, you might soon be ready to move out into a new place of your own! When that time comes, The Hopkins Group is here to help with a number of great properties available for lease across Melbourne. Check out our current availability today!

Property investment – expectation vs reality

Posted on 21/11/2018 by daniel-admin

Property is often regarded as one of the safest long term investments and also one of Australia’s favourite ways to invest.

Novice property investors can often enter the market with pre-conceived expectations of what it’s like to invest in property; however these expectations don’t always line up with reality. Understanding this is one of the first steps to becoming a successful property investor.

So what exactly are these expectations we need to overcome?

Expectation: For the right price, any property purchase is a good investment

Many people go into property investment with this idea that as long as you can secure a good price, any property will do. However, this is rarely the case.

Reality: Not all property is created equal – what, where and when you buy matters

There are so many factors that will affect your return on investment, so it’s important to do your due diligence before choosing a property.

Before you buy, make sure you research the area, check recent sales prices so you’re familiar with what you can expect to pay, check the vacancy rates and any proposed changes in the area, like new development or zoning permits that may affect future property values. Consider your timing in terms of market trends – are you buying at the peak or trough of a cycle? What’s going to provide the most value in the long term?

It’s also really important to go into a property purchase with an investment mindset. Many people fall for the trap of ruling ‘heart over head’, meaning they allow their emotions to cloud their judgement and are more likely to over capitalise their purchase.

Expectation: Property investment provides instant returns

Many first time property investors go in thinking they can become millionaires overnight, believing that investing in real estate can provide a quick fix to their financial shortfalls. They are drawn in by the promise of capital growth, a steady rental income stream and those sweet tax deductions.

Reality: Property investment is a long game, that requires time and planning

To be a successful property investor, you should outline your investment strategy and then develop a plan to achieve your goals. Not only do you need to focus on the short term, but long term also needs to be taken into consideration, and ensure your investment decisions align with your overall strategy. As the saying goes – “if you fail to plan, then you plan to fail”.

While it’s true that investing in bricks and mortar can be a great way to create wealth, it’s also a long term investment. The longer you hold it, the better off you’re likely to be. It’s about patience and persistence; property moves in cycles, with fluctuating highs, lows and periods of no movement at all.

You need to consider your cash flow and budget carefully – on top of loan repayments you need to be able to afford ongoing costs like rates, insurance, owners corporation fees, repairs and maintenance, and property management fees. While your rental income is likely to cover most of these costs, you need to be prepared for those instances where it doesn’t – such as prolonged vacancy periods or missed payments from tenants.

Additionally, those attracted to the tax advantages of negatively geared and brand new property should be wary of relying solely on these incentives.

The goal is to ensure you can continue to afford your property without entering financial stress that would cause you to sell at the wrong time. Understanding all the costs involved in holding property can be difficult, so it’s recommended you seek advice from a professional adviser to ensure you know what you’re getting into financially and avoid any nasty surprises.

Expectation: I can save money doing it all myself

First time investors will often try to do most of the legwork themselves. They believe they can save a pretty packet by taking on tasks such as researching different loan options, sourcing their own property and managing their own leasing.

Reality: You can save both time and money with the right advice

There’s only so much you can learn online, so seeking advice is a great way to get ahead. At The Hopkins Group, our team of advisers have the experience and technical expertise behind them to guide you through all stages of the property investment process. The Hopkins Group can help you:

understand your cash flow situation and how property fits in the broader context of your financial strategy
gain access to high quality property that may not be available to the general public
secure the best loan product for your needs
manage the ongoing leasing and tenancy of your property
undertake pre-settlement inspections to ensure your off-the-plan property is appropriately finished

Our teams are experts in their field and are across all the ins and outs of their industry – from legislative requirements to market trends, they know their stuff.

And while there are fees associated with property management (and the implementation of broader financial plans beyond property), these costs are small compared to the time you’re saving by not doing it all yourself.

What’s more, speaking to a Property and/or a Mortgages and Finance Adviser at The Hopkins Group is free – so you’ve really got nothing to lose!

Get started on your property investment journey and speak to our team today!

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Disclaimer: The information contained herein is general in nature and does not take into account individual situations, needs or goals. It should not be relied upon and persons should satisfy themselves through independent means that any decisions based on this material are appropriate. We recommend that you consult with your adviser who will be able to make a recommendation based on your specific circumstances.

What happens when my tenant breaks their lease?

Posted on 06/11/2018 by daniel-admin

Congratulations! You’ve successfully secured a tenant for a 12 month lease. You’ve got nothing to worry about, and peace of mind for 12 months, right? Well, there’s the good news and the bad news.

Let’s start with the bad news….

While a fixed term lease means an owner is required to make the property available to the tenant until the end of the lease period (unless of course the tenant defaults), your tenant is also entitled to break their lease and vacate the property, should they wish. So what happens if they decide to break their agreement and leave early?

Here comes the good news…

While your tenant is entitled to break their lease they have also signed a legally binding agreement to lease the property for a set period, so they can’t just walk away without consequence.

Upon signing a lease, your tenant becomes responsible for paying the agreed amount of rent, for the entire period of the set agreement. If they decide to leave early, they are responsible for the rent on the property until a new tenant takes possession or until the lease expires – whichever occurs first.

Your responsibility as a landlord

Although your tenant is responsible for maintaining their lease terms, as a landlord you must also make every attempt to re-let the property within a timely manner. This responsibility is to minimise any undue hardship on the tenant, who quite likely will be paying two lots of rent once they have vacated.

It’s also important to note that rent increases can be very difficult to implement (unless there has been a clear market shift) as this may be viewed as detrimental to the speedy re-leasing of the property.

Who is responsible for advertising and letting fees?

While you may not be losing out on rent, you may be thinking that it’s not free to advertise and re-lease a property; why should it cost you money when you haven’t done anything wrong?

Fortunately, professional leases like those used by The Hopkins Group often include clauses relating to costs incurred by an owner, should a tenant break their lease – as far as is allowable under the Residential Tenancies Act. In this instance, our lease stipulates that a tenant is to reimburse the owner the full cost of advertising incurred, and to reimburse the owner part of the re-letting fee on a pro-rata basis, based on the unfulfilled portion of their lease agreement.

You’re in safe hands

While a fixed term lease doesn’t necessarily offer the peace of mind you once imagined – thankfully having your property managed by a professional agency like The Hopkins Group can.

As a client of The Hopkins Group, you will be contacted by your property manager as soon as a tenant indicates they will be breaking their lease to confirm you would like the property re-let. The advertising of the property will then commence immediately to try and secure a new tenant as soon as possible.

Want to learn more? Contact The Hopkins Group on 1300 726 082 to speak with a property manager today – or send us a message via our contact form and we’ll be in touch as soon as we can.