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If you get an agent who is readily willing to discount their commission (which is money out of their pocket, it takes money off the table for their families) then why would they negotiate to get you a top price???
In some markets around australia, yes your home will sell in a few weeks, and with not much effort, but when the effort is applied, you can get even more money in a top market, and the agents that are good, they actually spend alot of time working with buyers to ensure that the buyers they bring through your home are qualified and ready to buy, and the good agents will know exactly what properties will suit who. And it has been proven that buyers will pay more money through an agent they trust, so you want an agent who has a good relationship with their buyers, and a proven success record of preimum prices.
Never ever play agents off against each other. The good agents will walk away because they wont want to be a part of that, and all you will be left with are the sharks, and it wont be a pleasant experience. These are the people who will tell you your home is worth 600, then pressure you into selling for 450k, and your left hating all real estate agents. In case you cant tell, i am an agent, but before i was an agent, i was an investor, so i understand your trying to keep costs down, but its like accounting, or lawyers services, you get what you pay for, and you do have to pay more money to get a premium price, and first class service. Look at it this way, the fee you pay to an agent, its an investment into your profits. The profit wont be nearly as high if you use a dodgy brothers agent.
Good luck, its tough trying to tell who is a good agent, and who is bad!young investor01 wrote:Hi guys i know out there in the property investing world there are hundreds or even thousands including myself who want to now where to start when renovating that ex-housing commision 3 bedder down the road or that old run down miner's cottage on the outskirts of town. What i'm trying to say is where do you start when renovating a property. Do you start inside or out? Painting the walls or repolishing the floor boards? All you professional reno men and women please enlighten us (especially me) on the A-Z and step-by step of renovations. Do you first create a list of jobs and quotes from contractors . This is a topic so mind boggling to me . When do you start the reno during settlement? What if the contract falls through don't you lose all the work you've already started on the place. Thanks for all your replies guys, if anyone has any books or info on the first till the last job you do please help out. It would be great if you guys shared your experiences or even a list of jobs you do time and time again.
Hi,
I too had the same questions when I did my first renovation. How do you know what the best things to do are?
Best value for money? Paint Paint Paint
You can also update fixtures and fittings very cheaply and it does enhance end value. For example, light fittings, door handles, new mirrors in bathroom, even replace a tired olf shower rail with glass door quite cheaply. Even put in new curtains or blinds. The curtains are a number one outdater! Dont spend a fortune on the bathroom and kitchen. You want to spend as little as possible and keep a track of the budget at all times. Sounds simple, but very easy to forget!
Number one rule which sounds like common sense but I didnt figure it out until it was too late? When painting (if you DIY) start from the top and work your way down! I started at the bottom because im quite short, and to do the high ceilings needed the ladder, but when we did the ceilings it was a mess trying not to splatter the newly painted walls!
Now ill try and answer your questions:Do the messy jobs first. In your example, do the floorboards first. Sanding down will create so much dust!
Unless you have a licence to occupy, you cant do any work until settlement. If you can get a Lic to Occupy, then yes any work you do you will lose if the contract falls through. Depending on what state your in though, here in SA, once the contract is signed, the only one who can make the contract fall over is you. And you wouldnt do that if youd done all work on it.
If you havent got a Lic 2 Occupy, then in the time before settlement, you would organise your tradies, book them ready to go for when you do settle. But try and structure a few days difference between them because they can take longer than they say they will. With your first reno, you will have mucho fun trying to a) find the good tradies, and b) getting them to work and finish on time! No offense to the tradies out there!Get the book by the reno kings, it has heaps of tips you can pick up on there. Just google the reno kings and go to their site to buy it.
Good luck.Wow, I love these suggestions guys!
They are all really good, and I especially loved Properly Managed Real Estate, what an awesome play on words, my only worry being that it is a bit of a mouthful, but I really like it. In fact, as soon as I check with my accountant to make sure someone else hasnt thought of the idea (I doubt it) this shall be the name of my new PM company!!
So thank you to the rest of you who thought of great ideas, I really appreciate your help, and to chele, can you please contact me?
Properly Managed Real Estate
i love love love it!
Phil,
Really enjoyed reading your post. Good luck to you mate! That is awesome that you have it all planned out!
Ive been through a similar scenario myself, sorted everything financial, get it all in order, and set goals so you know where you are going to be at any given time. It sure helps when you have to go to work, at least you know now you are working for something, not just working to pay bills and lifestyle expenses. It definately changes your outlook, and anyone serious about property investing needs to get all their finances sorted out pronto, because if you cant manage your own finances, your going to struggle with an investment property!
Anyway, I wish you all the best, and here's hoping all this planning pays off for us all hey? Which it will, because Ive read the Secret.
v8ghia,
I believe your very close. I work in a bank, and im the one they talk to about their home loans. I work for one of the big 4, and I would say that yes, 1 in 5 have fixed their home loans, but the important part is, 4 our of 5 are thinking about doing it. People are very scared, and im not talking about investors for the moment, im talking about first home buyers and your older generations, ones who saw what they 80's did to people with mortgages.
I do agree, if you are a high activity investor, meaning you buy at least 2 a year, then dont fix. Especially dont fix if you have lots of equity in your property because you cant access it.
Bottom line for most people, its an affordability issue, and if it helps you sleep at night, then do it.
(Personally, just for the record, ive gone with the theory of diversification. I have fixed the loans of half of my properties, and left the other half as variable. I havent got all my eggs in one basket!) Say you had 10 properties, fix 5.Good luck everyone, and lets hope we dont see the rates from the 1980's!!
Hi
But yes, simon is right, go for more land, you will definately have more gains than a unit in the ‘right’ suburb.
But you need to figure out why you are investing in the first place. What is the end goal for you? Then you will have more direction in what to buy first up.
You need to look more into the town itself. What is the main employment in the area? And is that employment looking like it will stay strong for a few years? What is the council like? Some are backwards in these sorts of towns and will wreck the town.
Here is a trick i used, i rang agents in surrounding areas of a town i was looking at, and asked their opinion. Most were more than happy to help, and i got some great advice. Its free and it cant hurt.
How many property managers in the town? if there is only one, your investment could go haywire. You have to know that the PM is good, because if there is no competition in the area, they dont neccessarily have to do a good job because they know there isnt anyone else.
I’d say at this price, and with that rent, id use it as a buy and hold, and no i would put this one at principal and interest, seeing as your yield is going to be high. Let the tenants pay it off, not just meet interest payments. That way you can always access equity. You cant access equity on an IO loan, because there wont be any there!
Good luck with it all, it sounds like youve found a little ripper, just make sure you do more due diligence than ever with regional properties.[biggrin]Hi,
I just wanted to confim a couple of things –
the price you pay is also affected by who it is managed by. By this i mean if you have a small group, it can sometimes be better to have it self managed. I do this for one of my units, and it means that we only pay 400 a year, whereas that can be a starting point for most body corps per quarter. That said, this can only be done if its a small group, or if you have alot of knowledge on how to run these things. There is a reason you pay so much money.Also, your body corp insurance, usually, you will find if you looked into the small print, that your only covered for the building itself. This is what you pay for, but you need to separately insure your contents, things like carpet, curtains, anything on the inside needs to be covered, because the outside is only covered by strata. I think youll find this is fairly standard with all property. Also, if you have bought a strata property, you will not be able to get landlords insurance at all. I rang a few of the top landlords insurers, and because there is already a policy in place, i couldnt get it. Definately check out all your options with insurance.
Every property may pay differently, because it is worked out on the size or allocation of the unit. But it wont be a big difference, unless youve got a penthouse or something!
Good luck, and make sure you check out the minutes of the meetings, they will tell you a lot!
Hi,
Yes you are likely to be undone by this, as they will do a credit check. Never mind that your committing fraud by lying.
I understand things can be tricky sometimes, but basically lenders view credit cards and personal loans as unsecured debt. This is dangerous debt to a lender, and the more you have, the less you will get from them.
Say you had 10,000 in credit cards, but you owed nothing against them, the lender still views this as a 10,000 debt. Because what is to say you go out after getting loan approval and blow the whole lot shopping? Then you will have the debt! They need to protect themselves against that. So keep that in mind when you apply for more. If you have a credit card with nothing owing, either reduce the limit, or close it off completely.
You should also talk to your lender about refinancing if you have personal debt. This might slow you down in terms of investment, but your going to be much better off in the long run in terms of saving on interest, and paying those debts off faster. Get rid of it all onto your home loan and never get it again! At least your home loan is good debt, in that you have borrowed for an asset that will appreciate.
Keep in mind though, dont refinance all the time to put all personal stuff on your home loan as this defeats the purpose of good debt.
Good luck, and have a chat to your lender, if they wont help you, find a new one!Hi All,
Personally, you should go to a property manager you really like, but go to their principal. Explain that your not happy with all the added charges, and you want to pay a flat fee.
Tell them that they have more to gain as their rent roll will be worth more, and you can only speak about this to the principal, as the property manager is not going to give a rats a$$, but the prinicpal will. If they still refuse, keep trying until you find a prinicpal that does. Theyre silly if they dont!
I wish i was in WA, because I charge a flat fee, there are definately no added charges! I’d make a killing offering a flat fee there! HeeheeheeGood luck, and as suggested before, last ditch effort, just use a PM to let the property out. Its about two weeks rent, and then manage it yourself. If the PM has done a good job in the first place, there shouldnt be too much work for you to do!
yep,
there is a community which aims to help investors and link up people with the same interests.
The contact person in perth is anita ottobrino, and her email is [email protected].
She is currently overseas at the moment though, so the best thing you can do is go to http://www.888abundance.com.au, and have a look at the young at heart propery investors community site. Its kind of like this forum, except we meet up regularly.[specool]Hey Stephen,
Well done, i bet you worked very hard to save that money. Thats awesome just on its own, and good on you for not wanting to waste it and create a life for yourself through property. I started at 17 myself, and it has only done me favours.
First thing you should do is go into your bank, and ask to speak to the lender. If they dont help you, find one that will. I dont know what your dad is into, but i think for your first one, you should go through a bank, its a bit safer until you know more about financing.
The lender will tell you the sort of fees you will need, with a good deposit like that, you will be able yo purchase something for 300,000, but you will probably pay lenders mortgage insurance, if you buy something for 300k, but with house prices the way they are, it means you dont have to wait, and its a factor that can sometimes not be avoided. Its like stamp duty, we all hate paying it, but its gotta be done!
Second of all, go into your local bookstore and buy as many books as you can. Id even take some of your savings, maybe 500 and buy heaps. 500 might seem like a lot of money, but its not when you factor in the information you can soak up out of these books. This is how i learnt everything in the beginning, and no one person can tell you everything, no one simlply has the time! There is a lot to learn, and if you truly want to do it, youll read as many books as you can. There are hundreds available, but here are a few of my favourites:
rich dad poor dad changed my life and lots of other people i know, its by robert kiyosaki.
real estate riches by dolf de roos is a good starter book. its packed with lots of stuff all of it good.
1,000,000 in property in one year by steve mcknight. this started me off oneof the first books i read.
this is just to name a few, there are plenty more.Thirdly, get out there!!!
go to opens every saturday, and speak to the agents, you will learn so much by doing this, and it will also give you a feel for your area, in terms of prices etc. it can be a bit scary going to your first one, but the payoff is huge. you will learn heaps. Also, check out the net, there is heaps of free information on here, but be wary of all the so called experts. take it all with a grain of salt. http://www.realestate.com is the best site ever to learn about prices, and you can save alot of time by being on here weeding through the crappy ones. its actually my homepage im on there that much!Ask your dad lots of questions, i think what he is trying to do is to get you to learn it all for yourself. he doesnt want to just give it to you, youll appreciate it so much more if you learn it yourself. And im sure if you went to him and said, what is lenders mortgage insurance, he would tell you as he would see that your trying to learn.
Most of all, never give up, and remember, a good deal comes along every week, so never think you have to buy this one because you wont see anoyher great deal come up, you will!
I have thought so many times, oh ill never see a good deal like that again, but you do if your hunting for them!Good luck!!!!!!!!!!!!!!!!!!!!!!!!!!!![thumbsupanim]
Hi,
Good on you for starting early.There is a group called Young At Heart Investors Community, which offer all the things you seek. It is a non profit community that are there to offer like minded individuals and real answers to any questions, and might be very good to start you off. Go to http://www.888abundance.com.au
Point of advice – go to a bookstore, and buy as many books on investing as you can, very cheap way to learn alot.
Good luck[happy3]
I had the same view as terry.
I used a will kit and the exact words on that are:
“you should also bear in mind that the interest in property known as a ‘joint tenancy’ passes to the surviving joint owner on the other joint owners death, and does not pass by will”I used a will kit because ill have to do a new one when i get married, which is in 6 months yey! but for my next one i will definately be using a solicitor and i suggest you do the same. Get their advice, its really the only one you can trust. bear in mind, i am from sa, and laws can be different in each state.
terry had a good idea with the structuring of the will too, for that you will definately need a solicitor!
Good on ya for getting into the game though![grad]
Hi,
While nobody likes paying fees, what the agent says is a fair point.
Why would you want to hire someone who is so quick to drop their price to get your business? Then it is extremely possible that that agent who dropped their fees, would drop the price of YOUR home just to get a sale.
Not just coincidence, I see it all the time. A very valid point. A good agnet will be one who will get what your property is worth plus more to cover their fees. So say your property is worth 500k, they will get 550k, therefore making their fees reasonable. I guarantee you that if you sell it yourself, you will struggle to get that extra, as no offense, but you dont spend your life honing your negotiation skills like agents do. That is their job. Plus it takes longer to sell FSBO, and people will be out to scam you thinking youll be easy because your not an agent.At the end of the day, only pick an agent you feel comfortable with, and remember, if you try to sell it yourself, and its on the market a long time, you cant then send it to an agent and expect good results. Properties become stale when on the market too long.
Howver, I dont know how long things take to sell in Perth, but maybe your right. Think long and hard about this one, as the selling process is not much fun.[confused2]Maybe now is the time to consider a real estate career if your frustrated they update their beemers?
Hi,
I dont know about other states contracts, but here in SA, a default clause is in every single contract. It is in the terms and conditions, which no one ever reads until something like this happens.
I quote for you:
‘If the purchaser breaches this agreement and as a result, the purchase of the property is not completed on the settlement date, or the price or any part of the price is not paid on its due date, the purchaser must pay interest on the full price (less the amount of any deposit monies paid) from the settlement date until either…’ blah blah and it goes on. Basically yes you have to pay interest until the money is paid.
This is a basic default clause, and i would be 99% certain it would be on all contracts in the country.
I have defaulted myself once due to an incompetent lender, and luckily, my vendor didnt charge me, but I would be going after the lender for the money. If its their fault, they should pay.
good luck, and read your terms and conditions on your contract!Hi Steve,
The above post was great advice. When investing in anything, dont rush it. A good deal comes around once a week, they will always be there.
Or you could always use a buyers agent. They can help you find properties that your after, and you might learn alot on the way.
I know a good one if you interested.Good luck,
Skye
It does depend on what state your in, find your local REI, they will probably have an information line, and they will be able to tell you the law in our state.
im just wanting to confirm about SA. You can make a written offer, and while i guess it would be considered binding, if you are writing the offers properly, you would have a clause in there.
Example: Subject to Purchasers satisfactory finance approval. Make sure you say its to the purchasers satisfaction. If you leave it open like ‘subject to satisfactory finance’, who is it satisfactory to? Ive heard stories where someone tried to pull out using a finance clause, using the open example above, and the vendor turned around and offered finance at something ridiculous like 30% for 30 years or something like that. So in the end they were forced to buy it and try hard for finance through a bank!
Read as much as you can about it. Plenty of info available in books with the negotiating powers offers can have.
Also, dependant on your state, but in SA, never let an agent not accept your written offer. They are required by law to accept all written offers and present them to their vendor. Many agents will tell you otherwise and try and get you to sign a contract!
This is why i go to opens with a pre-written offer, with all my conditions on there. Saves time and makes it easier for the agent to accept it.
Also, you shouldnt worry too much about having to pull out of offers. If all your offers are being accepted, then your price is too high! The whole point of offers is to negotiate either a good price or good terms! You might make 20 offers, and have only 2 accepted. If your getting more than that, then your offering too much!!!Good luck!!!!!!!!!!
Hi
Check with your state version of the real estate institute. I know in my state to operate like this, you need to be a registered real estate agent, and you have to do these courses that if you do them at the real estate institute, in my state, costs close to ten grand. Just to fulfil the legal obligations. This is why not everyone can operate a real estate business. I believe the legal part of it is, to trade or to be seen trading in the business of real estate, you must be a regiestered real estate agent. This is just in SA, check with your relevant state.
Again, to obtain business contracts, you need to be part of your REI, as this is where everyone else gets them from. That way, your customers know its legit.
The real estate institute will give you all the info you need, and customers know the REI and if your a member, it is appears that you would be legit and ethical. Puts their minds at ease.
Good luck with your venture, its hard starting a business from scratch![thumbsupanim]hey no offense to frank, but this is exactly the problem with that company. A buyers agent is supposed to work exclusively for the buyer, but capital cashflow are selling properties too. While franks property with a 10% return, might well indeed be a cheap way to sell, and it might be very good property, they arent looking out for buyers best interests, and you dont want to go there.
Also, ive seen some of the locations of the properties that they ‘market’, and they recommended one particular town that is dying. Yes the returns are there, but the town itself is so bad your property will probably go backwards, just like the town is.
I had thought of buying from them, until i saw them advertise property in the dying town, and i realised that they must not know a thing to be recommending property there.
If your thinking of using a buyers agent, i know a good one, email me for more info, but please dont buy from this company. I dont normally disrespect other companies with what they are trying to do, but i worry that this company is advising people when they dont appear to know anything themselves.
good luck
