HOUSE TO HOUSE

We are proud to present our newsletter which covers important information for all our amazing clients.

Please see our highlights for each story. Click on the links to read more about the stories that interest you.

Tips on buying an investment property – The financial elements, putting them all together

What has been happening in property management and in the overall rental market

Read more about our vacancy rate, rent reviews etc.

Check out our executive style rental property of the month.

Modern design, 3 bedroom 2 bathroom property and it is only one street from the beach!

Read more: https://propshop.com.au/listings/residential_rental-2098750-port-hedland/

How is the sales market going in Hedland?

Read more about what our sales team has been up to, and their views about the current sales market along with relevant figures

Check out our sales property of the month

Massive shed ✔ Close to the beach ✔ Great brick structure ✔

To read more about this awesome property follow the link to our website:

https://propshop.com.au/listings/residential_sale-1980241-port-hedland/

Check out our commercial sales property of the month

This property has space for all your storage needs and is located in the centre of town, and you choose to either buy or rent this yard.

To find out more follow the link to our website:

https://propshop.com.au/listings/commercial_sale-or-lease-2096342-port-hedland/

Question and answer with our awesome Boss and owner of the business Jim Henneberry

Wonder what Jim is most passionate about and where he originates from?

Read all about in our little interview with Jim Henneberry.

Check out some relevant articles we found interesting about the current market

REIWA – Real Market Facts – METRO AND REGIONAL

https://reiwa.com.au/the-wa-market/perth-metro/

https://reiwa.com.au/the-wa-market/regional-wa/

The West Australian – Housing market

https://thewest.com.au/business/housing-market

REIWA – Port Hedland facts and growth rates

https://reiwa.com.au/suburb/port-hedland/

Wonder what we have happening in the office and how our teams works for you?

Read more about our systems and interesting offers that are on for home owners in Port Hedland.

Contractor of the month – Red Dog Property Partnership

Read more about our chosen contractor, and hear about what special offers they have on for Hedland Property Shop clients

Tips on buying an investment property – The financial elements, putting them all together

By Jim Henneberry – Director

This is it! The elements or the ingredients that when added together gives you the big picture or result. There are four components that must be taken into consideration. They are:

• Rental income
• Tax deductions
• Capital growth
• Gearing

It is these 4 elements that must be considered together and not in isolation. Some say, “Real Estate! You would be lucky to get a 5% or 6% return from the tenants” or “Real Estate! You would be lucky to get a 6% or 7% capital growth”. Let’s look at the result when all the elements are combined.

• Rental Income

The Australian Bureau of Statistics shows us that in 2019 32% of Australian rent homes (or 68% of them buy homes) and as property grows in value it is safe to assume that this 32% would increase. Rental incomes becomes payable when the tenant enters into a lease and the term is usually from 6 months to 2 years. The rent received from your tenants is used to cover any expenditure, which your managing agent will pay on your behalf, and could include Shire and Water rates, insurance, maintenance and management fees. The net amount is then submitted to your nominated bank account. In a lot of areas rental incomes reflect a 5% to 6% return on the value of the property. Eg; $100,000 at 5% is $5,000 yearly rent and $200,000 at 5% is $10,000 yearly rent.

• Tax Deductions

Because you are providing housing as a private investor and saving the government from this expense, your shortfalls on your investment is allowed to be deducted from your own incomes before you pay tax, when there is a shortfall between the income and expenses we call this the negatively geared amount (Figure 1). But when the income exceeds the expenses we call this the positively geared amount (Figure 2). You will have to pay income tax on this positive income in due course, unless you have other shortfalls from other investments.

It is worthwhile at this point to explain “The Marginal Scheme” tax is deducted from us at different rates once we exceed pre-set amounts. The new tax rates since the 1^st of July 2019 are without the Medicare Levy.

Tax Rates – July 2019

In the example in Figure 1, the $5,000 shortfall would be deducted from our taxable income, and depending on which “marginal rate” we are in we could get 19% ($950), 32.5% ($1,625), 37% ($1,850) or 45% ($2,250) contributed by the tax man.

In Figure 2 we would pay tax on that $5,000 positively geared amount at 19% ($950), 32.5% ($1,625), 37% ($1,850) or 45% ($2,250).

There are other items of deduction which we can also claim, and the biggest one of these are “depreciation”. Depreciation on the chattels (carpets, curtains, light fittings, stove, hot water system) and the building, providing the dwelling was built after 1987 we can claim approximately 12% on chattels and 2.5% on the building.

On which you get further tax deductions at your marginal rate 19% ($1,406), 32.5% ($2,405), 37% ($2,738) or 45% ($3,330).

• Capital Growth

Let history guide you here. The Real Estate Institute of WA confirmed that the growth rate over the past 50 years has been 7.2%. Ask us for a report on capital value growths rates per suburb.

• Gearing

The definition of gearing is:

Controlling a large amount of money with only a small amount of your own.

A 10% deposit on a $100,000 property allow you to control an asset 90% bigger than your $10,000,

What happens when the property goes up by 10% in value to $110,000? Your deposit monies have just grown in value by 100%.

You can see now that by adding together the effects of rental income, taxation concessions, capital growth rates, and the benefits of gearing, really attractive returns are very possible by investing in real estate.

What have our property management department been up to, and what is happening with the current rental market?

By Jemma Lions – Senior Property Manager

We have seen a steady increase in prospective tenants over the last 3 months, a lot of new people coming to town which is great to see. We have been able to add a lot of people to our database of prospective tenants waiting for the ideal property to become available. We have also seen a high demand for executive style properties in both port and south for our corporate tenancies.

We have been working hard with rent reviews and are happy to say that majority of our rent reviews have returned with an estimated rent increase which we have been able to adjust our properties to keep them current in the improving market.

In the last 3 months we have seen 27 new leases be drawn up for new tenancies and 26 lease renewals for our existing tenancies deciding to stay in their current rental properties.  We are very happy with the numbers and are hoping to have our next quarter see an improvement on these numbers.

Maintenance has been a little on the rise recently, we did see a lot of our owners take advantage of the Winter Special air conditioning servicing from our contractor Hedland Air Conditioning had offered which we feel will make it a lot easier coming into Summer to ensure the air cons are in good working order.

Between Port and South Hedland we have 90 properties available for rent across all agencies, 33 of those in port, the other 57 in South.  As you can see in the graph below, we have seen a steady increase in rent compared to this time last year.

Hedland Property Shop’s residential rental Vacancy rate is sitting at 3% as of today, and our average weekly rental amount is sitting at $440.00 per week.

We are all excited to see what the next quarter brings!

Contact me on 0429 200 452 or on jemma@propshop.com.au if you have any questions.

How is the sales market going in Hedland?

By Victoria Thoegersen – Residential Sales Consultant

Overall the past three months have been busy for our sales department! Our Sales Consultant Victoria got a lovely review from one of our owners that choose to sell her property through our sales team. This came in perfect time to celebrate her anniversary of being a registered sales rep for a whole year.

Check out the cool gift the seller sent to show her appreciation of a job well done.

Within Hedland Property Shop we have seen a total of 7 properties going under offer, while a total of 6 properties have settled in the past few months. We have also listed 7 new properties for sale in this period.

The median price for South Hedland is currently sitting around $215,000. While the median price for
Port Hedland is sitting around $415,000. Over the past year this has slowly been increasing as you can see in the graph. While the prices for houses in South Hedland have seen a similar increase, we are seeing that units are still showing a slight decrease in median prices.

South Hedland

Port Hedland

We expect to see this growth continue in the coming months and into the next year!

Contact me on 0400 993 200 or victoria@propshop.com.au with any questions or if you would like me to provide you with a FREE market appraisal of your property.

A little about our awesome Boss and owner of the business

• How long have you been in the real estate business? Since 1981 (38 years)
• What inspires you to succeed? Serving people
• What is the most meaningful part of your job? Team work
• Where are you from? Born of Irish parents in England and arrived in Australia at 21 years old.
• What are you passionate about the most? Like everyone else, health, wealth and happiness
• What is your biggest hope for our town? That we are allowed to diversify away from the resource sector in order to build the residential population and diversify the economy of the Pilbara.

Wonder what we have happening in the office and how our team works for you?

Our office has weekly meetings every Friday 8:30AM – 9:30AM, we may miss your call or email during this time, but we will get back to you!

Tips for owners: Town of Port Hedland and Water Corp are helping to save water! Offering free showerhead swaps and irrigation checks for your home.

• Free Showerhead swap more information: https://www.watercorporation.com.au/save-water/water-saving-offers/showerhead-swap?utm_id=eml:dm:wt:exm:shwhed:pshss:
• Free irrigation check information: https://www.watercorporation.com.au/save-water/water-saving-offers/irrigation-system-check?utm_id=eml:dm:wt:exm:srik:pshic:

Sign up to Property tree as owners to keep up to date with your property, call us for more information!

Tips for our tenants: Sign up to Property Tree as tenants to get all of your information today. This shows payments made, rent due and any outstanding bills and more. For more information contact us today.

We offer FREE appraisals for both Rental and Sales properties, don’t be shy, come on by and have a chat with our experienced team today.

A little about what our rental team does for you

By Leah Taylor – Accounts Manager

Hello,

My name is Leah and I do the Trust Accounts at Hedland Property Shop. I have nearly been here 2 years and have to say I am one of those people who love’s my job. We have a great friendly team here who also take a lot of pride in what they do. In saying that there is always room for improvement so we target certain problem areas or look into updating our procedures regularly. This quarter we have worked on the following.

• Pet Bonds – It was brought up a couple of times by our owners that tenants may have purchased a pet throughout their lease and forgotten to pay their pet bond. To rectify this we have been and will continue to monitor this more closely in our inspections. Please if you are a tenant and you do have a pet let us know prior to an inspection so that we are following the correct procedures. A pet Bond is $260 and used to cover a pet spray as part of your vacating checklist, the rest is refunded.
• Contractors – With a rise to the rental market there has been a lot of maintenance being approved. I’m very proud to say that invoices are being paid correctly, and on time which was a struggle in the past market. This is a lot to do with great staff, but also great tenants. Without tenants paying rent on time and regularly it makes it hard for owners to approve maintenance requests and to find a willing contractor to do the works. So on behalf of Hedland Property Shop I just want to say a big thank you to our amazing tenants.
• Breach Procedure – We have also updated our breach procedure so please be aware of the following changes. A breach will be issued if the rent is 5 or more days in arrears or if you have a tenant invoice (water, electricity, etc) that has not been paid within the 21 days from the date it was issued. If the amount stated isn’t rectified within the 2 weeks of receiving the breach a termination notice may be sent. Also if you have made a payment plan with Hedland property shop and you have not honoured a payment, we will breach the tenant immediately. If you do fall in arrears or you do feel like you are unable to keep up with your payment plan, it is in your best interest to contact us immediately so we can re-evaluate the situation.
• Friday Meeting – We have a staff meeting every morning from 8:30am to 9:30am, we are always discussing ways to improve our overall business. If you are an owner, tenant or contractor, please feel free to email me with any input you may have, the more efficient we are the better for everyone. I love hearing people’s thoughts and ideas, so don’t hold back.

 Contact me on invoices@propshop.com.au or call the office on (08) 9173 5555 and ask for me!

Contractor of the month – Red Dog Property Partnership

We have chosen Red Dog as our contractor of the month because they are prompt to reply to our quote requests and work orders. Their work is done well and efficiently to ensure our tenants can enjoy a well-functioning property, and at least because of their bubbly personalities that makes us laugh, and leaves us with a smile every time they have been by our office.

Check out below what Red Dog can do for YOU!

1. FREE quotes on our sales properties only – for both buyers and owners so YOU know more about the property condition, and actual costs of repairs.
2. Retic systems – Red Dog can install from scratch and repair damaged systems.
3. General maintenance – There isn’t much that Red Dog can’t do for you!

Contact them to have a chat about what else they can do for you.

Reddoghedland@gmail.com

Dave – 0455 280 765

Marc – 0476 153 998