Monthly Archives: April 2016

Taking control of the F.E.A.R.

False Evidence Appearing Real

I know it and you know it too!

Congratulations! You are reading another fantastic Property ‘Women Member email and getting more great information to help you move on towards your success in property investment. Consistently searching for hints, tips and guidance that can help you is a strong step in the right direction. So hold tight to this success habit of reading your Property Women emails! It is vital to stay plugged into a source of great inspiration, information and association. I know it and you know it too!

Many of you have already started to take steps towards moving on in property investing. Investigating finance options, researching and deciding on strategies, looking for suitable properties, perhaps even buying. Well done!

Some of you may still be holding back from taking those first steps due to this  “dream stealing” four letter word! F.E.A.R

We have all felt it! The fear of stepping out into, (for you), new and unchartered waters. Will we fail? Will we look foolish? What if it doesn’t work? What if, what if, what if…! Many people are paralysed by fear and end up doing nothing and we all know what happens when you do nothing…….NOTHING!!  I know it and you know it too!

There is no doubt that in these interesting economic times the “doomsdayers” and “naysayers” are having a field day! Unless you are hiding under a rock it is hard to get through the day without some negative media or comment about the current economic situation. Negative and drama sells! But consider this perspective on F.E.A.R   it is very often….

False Evidence Appearing Real!!!

Research has shown that up to 80% of what we worry about and fear will never actually happen! That is a lot of wasted energy and it is totally non productive! Imagine if you could put that same energy into finding ways to achieve your goals! Be a solution seeker and look for opportunity in every situation. It is often easier to find than you think. But what about all that negative out there?

One of the first and most important things we all need to do is to sort out what is fiction and what is fact. It is critical that when you hear a comment about something from anyone including (and perhaps especially) the media that you ask yourself this question. Is this information an opinion or is it fact?

They” is often the source given to us by others for information. “They” say interest rates will go down. By the end of the day you have heard another report that “they” say interest rates will go up! Just who exactly are “they”!

Opinion is what someone thinks about something, fact is just that, fact. Listening to and learning from people who have actually done what you want to do is a great way to start to sort fact from opinion. When you decide certain information is opinion, next ask what is this person’s qualification to give such an opinion?

For example if you wanted to learn how to play golf would you listen to Tiger Woods or your Uncle Fred, who watches a lot of golf on TV and loves to give advice, (loudly and often) about the game!? Many people also have well intentioned friends and relatives who give (often not asked for) advice to us. They tell us all the reasons (in their opinion) and based on their (often no) experience, why we shouldn’t try something.

If false evidence which appears real (often in the form of opinions that are made to appear like fact) is stopping you from taking action I hope this simple but  potentially very valuable perspective can help you to make sure you do what is right for you based on facts and qualified opinion.

Stay focused on your dreams and goals don’t let the negative unqualified opinions of others put so much fear into you that you end up doing nothing!  If you go looking, there will always be “100 good reasons not to do something” but often it only takes one good reason to actually do it and make it work. What better reason to do something than to bring a better lifestyle and secure financial future to you and your family. I know it and you know it too.

There is no doubt at all that in the coming years we will be reading the success stories of those who capitalized on these special economic times.  They sorted the reality from the sensationalism, the facts from the fiction, the qualified from the unqualified opinions and looked for the opportunity in the moments we have now, before times (as they most certainly will), change again. Many will be saying…”If only I had…..” Others will be saying, “Thank goodness I did!” I know it and you know it too.

Someone once said to me “It’s like I have two dogs inside me fighting all the time. The white dog is positive, optimistic and thinks big, the black dog is negative, a pessimist and destroys my confidence. “Which dog usually wins?” I asked.

They pondered this question and gave this memorable answer…

The dog that always wins is the one I say, ‘Sic em!’to.”

Once again, how you think, what you choose to fear or not fear, and what you choose to do or not do, is ultimately up toyou.

I know it and you know it too.

Sic em!

Risks And Pitfalls In Investing In Property

From A Legal Perspective

Avoiding or minimising the risks and pitfalls with property investment can be accomplished following these three simple rules:

  1. Obtain the right advice from the right consultants.
  2. Obtain the right advice early.
  3. Be commercial and follow through with the advice.

Without obtaining the right advice upfront before you enter into any contract or agreement the consequences can be fatal, regardless of the size of the property small or large.

Here are some common pitfalls and traps people may fall into when investing in property:

  • Signing an agreement without obtaining advice – BIG MISTAKE. Even the smallest of investment properties can cost you thousands of dollars down the track in unwanted legal fees and potentially, payment of damages and penalty interest if no advice or the wrong advice is received;
  • Incorrect purchasing entity – if you obtain the right advice upfront before you sign this should lead you to ensuring the right legal entity is purchasing the property and is noted on the contract accordingly;
  • No conditions – every transaction is unique, therefore almost always there are some form of conditions required for both seller and buyer. The type of deal you are wanting to enter into must be discussed upfront and conditions included to favour and protect you, whether as buyer or seller;
  • Incorrect conditions – this is sometimes worse than having no conditions. What is the point;
  • Ambiguous conditions – if the conditions are ambiguous how can each party interpret what they mean. The conditions need to be clear and simple but effective;
  • Deposit details –these must be clear as to the amount, when payable and how. Methos of payment can vary. In long terms deals the deposit is usually invested.

Liability limited by a scheme approved under professional standards legislation. Who is entitled to the interest when the deal is completed would need to be accounted for;

  • Type of agreement and structure – getting the right agreement and structure for your investment is paramount. Obtaining the right taxation advice is critical;
  • Stamp duty considerations – very important. You do not want to paying out more money in government taxes than you have to;
  • GST considerations – important and often missed or not discussed. The sale and purchase of property can have GST consequences and a buyer may be misled as to whether a purchase price is inclusive or exclusive of GST;
  • Legal & accountancy advice – always obtain the right legal and taxation advice upfront before you sign and commit to the terms of the deal.

If you obtain the right advice upfront you should be able to avoid or minimise most if not all of the above issues. Getting no advice, or getting the wrong advice from the wrong consultants or professionals can be materially damaging to you reaching your end goal, and in some cases, can have detrimental and costly legal consequences for you.

This article has been provided by Despina Priala from Priala Legal.

Maximising Your Rent

How Do You Determine the Best Rent For Your Property?

Every investor should be striving to get the maximum rent possible for their property; so why not just pick the rent you want to achieve and advertise it at that? That may seem the simple approach but it’s certainly not the most effective and is likely to actually reduce your overall rental income rather than increase it.

Yes it is important that you strive to get the maximum rent possible, however you also must keep in mind setting the correct market rent to get your property rented as soon as possible; the longer you have a property vacant, the more it’s going to cost you. As an investor you no doubt realise that time is money!

So how do you get the highest rent in the shortest time? Well I believe there are 3 factors to consider:

  • Demand– Is there a high or low demand for properties at present.  are there lost of adverts which have been there consistently, or do real estate agents appear to have many properties available. This can be seasonal and affected by a number of factors. If there’s high demand you are more likely to get a higher rent. If there’s low demand you could be competing with other landlords.
  • What Is Available Now– look at properties currently available for rent in the newspaper and/or the internet, and consider their location and features for comparison to yours. Have they been on the market for a while? Are they asking too high a rent? Are they lacking in facilities that you can focus on when marketing your own property?
  • What Is Rented Right Now– Compare your property with what is currently rented, taking into account property location and features. Find out by asking other local property investors or your property manager. This will give you an indication of what type of property rents more easily at what price.

These 3 key factors should give you enough information to set the right rent for your property to get your income flowing quickly.

What if I want a rent amount that is higher?

As I mentioned at the beginning of this article, you could potentially just advertise the high rental that you want to charge – you can of course place your property on the market at any rental amount you wish.

However, after reading the 3 key factors above I hope you understand that it is the market demand that sets the rent and if the market (prospective tenants looking for a rental property) deem the amount of rent too high; your property may stay vacant longer than necessary.

With this in mind, be aware your annual rental return will be reduced by 2% for every week it is vacant!

If you want to charge high than market rent, and you also want to get a tenant quickly, you need to be providing something that the other landlords are not, which is important or attractive enough to the prospective tenant for them to pay a higher rental amount.

How should the rent be reviewed?

Everything comes in 3’s and this is no exception!

  1. The ideal opportunity to review the rent is when you are looking to secure a new tenant, but always review the rent against market conditions as mentioned above.
  2. Lease renewal time is a great time to review the rent, but again, make sure you’ve done your homework if you’re self managing.
  3. Negotiating with a periodic tenant to make some improvements to the property or offer benefits to them allowing you the opportuhi8ty to review the rent, at the same time. You may even want to negotiate to change them to a fixed term lease at the same time, too.

It should be noted here also that there may be some legal limitations which apply to when you can increase the rent in your area so make sure if you self manage you have done your research on those requirements. If your property is being managed the property manager should contact you for your permission before the rent is increased.

As property managers working in the market day to day it’s easy for us to keep up to date with the market and the local legislations relating to rental properties, but if you’re self managing it may be something you only do occasionally, so keep these notes ready for your next opportunity to review your rent and make the most of your investment!

This article has been supplied by Ros Hurn, Principal at Real Tenants, Real Property Management www.realtenants.com.au Real Tenants is dedicated to providing its clients with the highest possible quality of service and standards, seeking to deliver on their promise of reliability and quality above all else.



What is a Buyers’ Agent?

Buyers Agents are licensed agents who represent the buyer in a real estate purchase. Typically, this involves finding properties that satisfy clients purchasing criteria, carrying out the due diligence and assistance in acquiring the property by negotiation or at auction.

Buyers Agents are governed by legislation and codes of conduct as prescribed by the Office of Fair Trade.

You can expect the following from a Buyers Agent (or Buyers Advocate)

  • Sourcing off-market or pre-market listings
  • Reduce your investment of time
  • Understands the market very well
  • Knows how to look out for clever purchasing opportunities
  • Can provide clear feedback
  • Liaise with your solicitor, broker and sometimes architect
  • Call council on your behalf
  • Arrange strata reports and pest and building inspections
  • Save you stress and act as your wingman (or woman)
  • Negotiate the best deal for you
  • Provide valuable advice throughout the buying process

Buyers Agents work for the buyer and by law must disclose any commissions payable or received. It is illegal for a Buyers’ Agent to receive a commission from their client and then from a vendor.

Through industry experience and networks established a good buyers’ agent will have greater experience, access to more data and information that results in benefits passed on to their clients ensuring you make a well informed and educated decision.

As a third party there is no emotion in the deal, a good buyers’ agent will look at facts and market factors for decisions. They are skilled negotiators and save you time by narrowing down your property search.

Buyers Agents can save their clients tens of thousands of dollars, from not buying the wrong property to ensuring they negotiate the lowest achievable price for the right property.

To find a reputable Buyers’ Agent you can look to industry bodies such as www.REBAA.com.au or your states Real Estate Institute or sites such as www.localhost/propertywomen who have affiliate partners in all capital cities.

if you’d like to take a look at the buyers agents we have on our Property Professionals Network please follow this link
https://propertywomen-au.sslsvc.com/ppn/directory/

Market Wrap March 2016

Sydney – Brisbane – Melbourne – Newcastle

So what is happening in Property on the East Coast of Australia?

We asked 4 buyers agents in the know for their opinion and here is what they have to say…

Sydney

Despite the media’s best attempts to put fear into the hearts of Sydney buyers the real estate landscape is still quite buoyant.

We are not seeing significant discounting although agents are more actively following up on sales enquiries which is a slight hint that change is coming.

The Easter auction clearance rates were 68.6% so whilst the 80% weeks are behind us that is still a very significant number.

A lot of investor enquiries we receive tends to be for outer lying areas – Central Coast through to Newcastle. A lot of Sydney investors are also buying in Brisbane.

Overseas buyer enquiry is steady with expats securing property in premium pockets. These areas have 3-4% rental yields so these buyers are chasing capital growth and securing their slice of Sydney for the future.

Jo Vadillo
Buyers Agent Sydney
Advocate Services

Brisbane

We tend to focus on investor buying in Brisbane. We have Carol Lawson our local buyers’ agent who is an active investor herself and she knows the market very well. As such we have strong referral networks too with a lot of property presented to us off-market.

Properties are selling the fastest we have seen in 7 years with some selling in a day. We are often buying when there are multiple offers on the table which wasn’t an issue a year ago.

There is a lot of buyers’ agent activity in the outer suburbs of Brisbane. Demand from interstate buyers is driving this.

There are a large number of Sydney and Melbourne investors which is contributing to the prices rising. Brisbane is sitting at about 9pm on the property clock.

Be cautious buying any off-the-plan apartments in the city of Brisbane with expected developments likely to outstrip demand for the next 7 to 10 years according to valuers Herron Todd White. This will impact vacancy rates and prices in the inner city ring.

We always suggest to buyers to look for infrastructure, schools, shops, public transport, parks, entertainment and employment. There is always an opportunity for those that know what to look for.
Greg Vadillo
Buyers Agent Brisbane/Sydney
Advocate Property Services

Victoria

Melbourne has just passed the pressure test of the year with 1476 properties going up for auction and with a clearance of 75%. The same Saturday last year we had 1170 with a clearance of 76%.

The inner suburbs of Melbourne are still performing extremely well with the eastern premium suburbs still out performing any expectations of a downturn in the market place. Family homes in inner Melbourne will be the stand out performers for capital growth. There is a huge shortage of family homes and that is what will drive the capital growth for 2016.

Period homes in Hawthorn, Kew, Camberwell, Prahran, North Carlton all sold well over the expected reserves.

However you can still buy a house in the inner northern and inner western suburbs for under $1m.  A property in Thornbury struck a record price of $1,945,000 with strong bidding from several bidders.

For you who would like to develop a property it is getting harder and harder. You really need to live in the property and renovate it over a period of time to achieve a good return on investment. House blocks with 600sqm + are being heavily sort after by developers.

In Spotswood which is in the inner west two properties sold to investors in the same street. 10 Strong Street was sold for $560,000 in 2013. On Saturday it sold with plans and permits for $1,117,000. 14 Strong Street was sold for $205,000 in 2006. On Saturday it sold for $977,000 to a developer.

There will not be any real capital growth in apartments and units. However you can be adding value by renovating the older style properties.

Capital growth will not decline within a 12km radius of Melbourne. The reason property grows in value is because land is a scarce commodity. They are not making any more.

Outer suburbs like Frankston, Skye, Rowville, Ferntree Gully Lilydale, Diamond Creek, Epping, Broadmeadows, Deer Park are stagnating with minimal growth.

Karin Mackay
Buyers Agent Melbourne
Australian Property Buyers

Newcastle

Newcastle is Australia’s 7th largest City, with a population of just under 500,000 for Newcastle/Lake Macquarie.  There is a broad range of industry including manufacture, power generation, agriculture, wineries, cattle and equine, tourism, health, medical research and education.  Newcastle boasts the largest working harbour in Australia.

The vibrancy is obvious and it’s a great place to call home with a relaxed lifestyle of harbour side living, fishing and water activities on Lake Macquarie, Australia’s largest Saltwater Lake and world Class beaches.

The Hunter Valley has been awarded Australia’s Best Wine Region in the 2015 Australian Traveller People’s Choice award.

Infrastructure continues to expand:

·        The $1.7 Billion Hunter Expressway to the Hunter Valley has considerably reduced travel time from Newcastle and Sydney.

·        The airport, located 20 minutes from the city, has undergone $15.4 Million in upgrades allowing for extra domestic routes and has been declared “international ready”.

·        The termination of the heavy rail line at Wickham has opened up the harbor foreshore into the older CBD area of Newcastle resulting in high desirability of Inner City living, with 17 major developments DA lodged, approved or under construction.

·        The New $90 Million Court House has just opened and construction is underway for the world first $95 Million University Flexible Learning Centre CBD campus to cater for an additional 4000 students.

·        A walking path from the foreshore extends around the beaches to the recently completed $4.5 Million ANZAC Memorial Walk, a 450m walkway with spectacular 360 degree views of the ocean and city.

With more affordable, lower entry prices compared to Capital Cities, good rental yields and low vacancy rates makes Newcastle an attractive location for property investors.  Well located properties with value adding potential are available in the range of high $300k’s to mid $400k’s. Steady growth without the reactive spikes and dips of other locations, makes the area attractive for long term investment.  Land is in short supply, especially in the inner city suburbs, providing opportunity and support from council to increase density with granny flats, dual occupancy, subdivision and development.  The ease of adding value is also useful for a flipping strategy for those wishing to create extra cash flow.  An example might be to buy a house to renovate, build another dwelling at the rear, subdivide and then either sell both, keep both or sell one/keep one.

The growth in Newcastle is suggested to continue with anticipated to flow on from Sydney. The latest Residential Property Prospects 2015-2018 report for BIS Schrapnel, highlights that Newcastle could see a rise in property prices by 10% over the next 3 years.

Judith Taylor
Buyers Agent/Sellers Advocate
Select Property Finder

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