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Real Estate - May 2006

Property Buying Tips - More Pest and Building Insp

May 31st 2006 00:12
This is some further information relating to the previous post about pest and building inspection advice...

Only in the ACT does the vendor pay the costs of a pest and property inspection report. In all other Australian states and territories it is the responsibility of the buyer to arrange and pay for a pest and property inspection. It is prudent to get a reliable property report which means that skimping and opting for the cheapest available is not always the best idea. Furthermore, using an inspector recommended by the vendor is not necessarily a good idea as they may be reporting in the interests of the vendor and may not necessary provide a fair or accurate report. The best idea is to find an inspector that has been recommended by a friend, business associate or solicitor. Make sure that you consult with the inspectors prior to their inspection. View a sample report to ensure all the information you require is available in their typical reports. Ask questions and clarify anything you are not sure about and address any specific issues you would like covered in their report.

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Property Buying Tips - Building and Pest Inspectio

May 30th 2006 01:15
Building and Pest Inspections:

The legal responsibility of vendors to disclose information about the property is very relaxed. For this reason, it pays to get any prospective property purchase inspected by a professional before you commit to buying. The cost of a thorough inspection is going to vary depending on the type of property, the size and location. Whatever the cost, it is money well invested. In the best case scenario, a professional property inspection will give piece of mind and can potential save you from a disastrous situation of committing to a financial bottomless pit of restorations and fixes.

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Property Buying Tips - The Block

May 29th 2006 04:47
This week, I’m continuing on with my tips for property investments. Last post I had a look at some of the issues concerning the state of the dwelling. Today, I’m focusing on the block of land.

The block:
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Property Buying Tips - The House

May 26th 2006 02:57
When purchasing real estate it is always good practice to look for attributes in the dwelling and block which will increase the future selling power of the property. Good features of a property are largely dependent on the surrounding area. A good way to assess whether a property you intend to purchase is good value for money and a sound investment is to research the surrounding area. Take a drive or have a look at the surrounding neighbourhood and take not of points which may your intended investment unique compared to other properties in the area. In terms of investment reward, a property with unique features for the area will have greater selling and return power and fair much better in a sluggish market.

Over the next few weeks I’ll look over some pertinent property factors which can help identify a good property investment.
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Introduction To Land Tax

May 25th 2006 02:06
Once you have purchased property in Australia, you will probably be required to pay an annual tax on this property. Only the Northern Territory does not have an annual tax tagged onto an investment in property. Land taxes vary widely within Australia, Usually a threshold is defined. Land which has a value below this given threshold is exempt from land tax. So one way of avoiding land tax is to purchase land with a value below the taxable threshold. This would seem like a nifty way of getting around land tax, however, the thresholds are revised annually, this means that your land tax liability could change annually. The other apparent way around land tax is to own land in multiple States, unfortunately, the government has cottoned on and a property owner’s payable land tax is calculated on all their owned land value, irrespective of State. When it comes to taxes, the government is remarkably efficient at closing loop holes.

For this financial year the land tax thresholds (ie the value of land up to which is not taxable) in Australia’s various states are;
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What Does $500k Get You in Darwin?

May 24th 2006 03:26
Finishing up the navigation around Australian’s property market with a look at real estate in Darwin. Darwin represents great value for money and is another growth property sector within Australia. $500k will get a good sized family home with several bathrooms, off street parking and a central location.

In the suburb of Bakewell, the two storey family home is fetching $490,000. The property has four large bedrooms all with built in wardrobes and there are three bathrooms. There is a large entertainment area in the first floor with a bar area and separate lounge and study areas. The kitchen is newly equipped with stainless steel benchtops and modern appliances. There are family rooms and formal dining rooms adjacent to the spacious kitchen and a large outdoor entertainment area overlooking an inground pool. The exterior entertaining areas are undercover and internally, air conditioning keeps the entire interior mild during the humid seasons. The garden has a outdoor tool shed, paved driveway and security fencing.
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What Does $500k Get You in Perth?

May 23rd 2006 02:29
To the west coast and properties in and around Perth are reasonable priced on a national scale. A family home with off street parking and modern convieniences are well within reach of a $500k budget. Perth has been recently earmarked as a grown property area within Australia. Be expecting healthy returns on property investments in the West Australian capital.

In Currambine, this huge family estate is fetching offers just shy of the $500k mark. The property features 4 double bedrooms, 2 bathrooms and a master bedroom with walk in wardrobe and ensuite. Enough space for any avid catholic family. The are seperate formal and informal dining/living areas. The kitchen is large with modern appliances including a dishwasher. A rumpus room provides ample space for children's indoor activities and the total block size is a massice 448 sq metres. The backyard includes a shed for storage. Added features are insulation, air conditioning, reticulation and modern appliances throughout. There is off street parking for two cars in a fully automatic lock up garage.
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What Does $500k Get You in Adelaide?

May 22nd 2006 02:29
Getting back to the mainland, today I’m loking at some properties for sale in Adelaide. Adelaide is another city offering property investors great value for money. Central city family style housing can be purchased in the $500k mark which is almost all but impossible in some of the other larger cities of Australia.

This two bedroom townhouse is perfectly located in the inner city for easy commutes to the city centre. It is situated in the East End surrounded by trendy cafes, shops and chic living. The house is fully renovated with modern appliances and focus’ on a low maintenance open plan living design. The main bedroom has a walk in wardrobe and separate ensuite with a spa bath. A great feature is the lock up garage and private front and rear courtyards for entertaining and hassle free outdoor decorating. The house is spilt over two levels and provides ample space for a small family or home office set up.
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What Does $500k Get You In Hobart?

May 19th 2006 02:06
Moving across Bass Strait and onto Tasmania. Housing prices in Tasmania are some of the most affordable within Australia. $500k is going to get the home investor a lot of value for money. Large family style homes with modern finishes or newly built developments can all be picked up in this price bracket.

In Austins Ferry this deluxe resisdence has all the modern features any family could possibly desire. The property is packed with three bedrooms, 2.5 bathrooms and one space for off street parking. The bedrooms are all spacious and the master bedroom has a separate ensuite. The main bathroom is luxuriously fitted with a spa bath and there will be no fighting for space with his and hers vanity and shower spaces. The kitchen is newly fitted with sleek lines and modern appliances. There is a large living space and ducted heating throughout the home. There is a rear deck for entertaining and a large yard prime for landscaping. Polished floors feature throughout the living spaces.
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What Does $500k Get You in Melbourne?

May 18th 2006 02:31
On to another larger cosmopolitan city, Melbourne. The prices begin to jack up again, although not to the same extent of Sydney’s property market. It seems that as a $500k investor, you could aspire to a modestly sized two to three bedroom home in the inner city suburbs.

In Fitzroy, this three bedroom/one bathroom terrace is advertised for auction around the $480-$500k mark. The land size is decent and floor plan is open. There is car access from a side lane which is very handy for city fringe living. Some renovations may be required although on the whole, the property is in good shape. It is located very close to shops, restaurants and amenities which are all within walking distance.
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What Does $500k Get You In Canberra?

May 17th 2006 02:29
Heading on south to Canberra and family sized properties start edging back into affordable territory.

In Ngunnawal, $500k is going to get you a five bedroom modern, single storey home with water and golf course views. There is ample outdoor entertaining space and a timber deck for outdoor bbq’s which can be covered by an automatic Vergola. Internally the house features formal and casual living areas, generously sized bedrooms, large separate laundry and a brand new white kitchen. The house is situated in a quite location close to local schools and shopping centre. There are a host of mod cons included in the house, ducted vacuum outlets, stainless steel appliances, ADSL connections, landscaped gardens, ducted heating and security doors and sensors.
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What Does $500k Get You in Sydney?

May 16th 2006 03:53
Moving down south to Sydney and its clear that $500k isn’t going to stretch nearly as far as in Brisbane. Its likely you’ll be settling for a semi or townhouse if you want a property easily accessible to the city centre.

In Newtown, $500k will buy you a pokey townhouse with great accessibility to the city, local nightlife and bohemian culture. The property is located in townhouse complex which can make for apartment like living. If you’ve got noisy or annoying neighbours – watch out. The house has two double bedrooms with built-ins, a gourmet kitchen and 1.5 bathrooms. There is also a private courtyard and double lock up parking. One potential downfall is that this property is directly under the Mascot Airport’s flight path.
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What Does $500k Get You in Brisbane?

May 15th 2006 02:33
So I thought I’d trip around the major cities of Australia and see what $500k will get you in terms of real estate. I’m just going to be looking at houses for this trip rather than apartments. It should give a good indication of the relative housing markets in the different areas of Australia. It will also highlight which cities are bargain buys and where the property market may have inflated values.

Firstly starting way up north with Brisbane,
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Bamboo Love Shack

May 12th 2006 02:10
Clever, innovative kids at the Faculty of Built Environment UNSW can undertake a three week intensive winter elective class focusing on construction with bamboo. The combined efforts of 30 students, a lecturer and two bamboo experts, yielded The Love Shack. According to the FBE website,

“The Love Shack highlights bamboo as a building material that could potentially be used for building sheds, gazebos and even houses. “Bamboo has a lower environmental impact than steel, is cheaper to buy, strong and lightweight and when it comes to aesthetics, bamboo wins hands down. With some varieties of bamboo taking only five months to grow to full size, bamboo is a readily available, environmentally friendly alternative to steel.”
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A Renter’s Desires Part Deux

May 11th 2006 01:19
So we’ve checkout the desires of the student demographic, what about the young family demographic. Money can be tight within this band although generally not as tight as students, you don’t want to overcapitalize your property to the point where the rent is not financially attractive to the family. At the same time, a certain degree of creature comforts are essential. It is really important to make sure you capitalize in areas of the house which are going to boost the attractiveness of your property to a young family. With an rental property location is extremely important. A young family would probably be relying on a private source of transport so public transport facilities are probably not as crucial. A local bus service could be a handy feature but is not as high a priority for a young family as it is for a student. Security and a quiet location tend to be higher on the priority list for young families. Quite streets away from busy roads are safer with young children about. High local crime rates are very unattractive. If there are a lot of passive security devices on the local houses, any parent is going to think twice about raising children there.

Desirable local amenities for young families include schooling and child care facilities. Family orientated recreation areas such as parks, tracks, public pools and leisure centres are good to have nearby. Also look for local clubs which families might enjoy and would be points of contact for other families with similar interests. Generally, a quieter, secure and suburban type area is going to be attractive to the young family type.
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Renter’s Desires

May 10th 2006 03:49
Continuing from the prior discussion of identify where to purchase investment property, today I’m going to look a little further into the type of features renters look for in rental properties. I can’t stress how important catering to the rental market is when you purchase and renovate an investment property. Reliable rentals and tenancies are essential as this is where the ongoing revenue of your property is generated. In lean times, you want to make sure renters are attracted to your property so as to minimize losses and the possibility of extended periods of vacancy. In competitive markets, you want to ensure that your rental property has an attractive edge over the other properties in the area. Always remember that whilst a property is unoccupied, it is not generating any income, all the while, mortgage, maintenance and tax bills will be stacking up.

The first step is to look at the area and decide who are the likely rental candidates for the area. This will help determine what feature your property should have. For example, if you are looking to invest in an area close to a university, it would be reasonable to expect a decent number of tenants in the area would be students. An area closer to the CBD would probably be catering to executives or those whose place of employment is located within the city. Some areas are more family friendly and thus attract families. Some areas can be classified as blue collar, other white collar. The general area is the first and most important factor in determining what are terrific property features for the likely rental market and what features are not so important. Some key indicators of the area include local amenities, are there any schools, train stations, universities, major employment centres, nightlife etc. Also look at the local political party and Council, their values will tend to reflect the general values of the residents. Have a walk around the area and take note of the people living in the area. Are they single types, young families, childless couples, business types, students???? All these factors can be used to assess the rental prospects of an investment property.
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Where to Buy Investment Property

May 9th 2006 02:55
If you are purchasing a property as investment, you should be able to take a lot of the emotion out of deciding where and what to buy.
If you want to maximize your capital growth potential, a key step is to purchase in an area with investment growth trends. Furthermore, you should be aiming to invest in areas that have a high level of growth, sustainable growth prospects as well as signs of growth stability. Property experts recommend that suburbs located up to 10 kilometres from a city’s CBD is likely to be within a growth area. A good idea is to get a regional map, identify properties for sale within a reasonable distance from the CBD and visit the area to see what amenities and lifestyle is associated with in the suburb. Since an investment property is going to be rented, it’s a good idea to consider the rental aspects of the property. Try to identify the requirements of a typical renter in the area and decide what features they would desire in a rental property.

Some universal features renters tend to like are good access to transportation, shops and leisure facilities. Some other things to consider specifically related to the property are bedroom sizes, off street parking or secure parking facilities, bathroom features such as a bathtub, kitchen facilities, enclosed yards, laundry facilities and storage spaces. From an investment perspective it is important to select a property which will be attractive to renters are this will ensure ongoing returns and tenancies.
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How To Win An Auction

May 8th 2006 03:59
You’ve found the property of your dreams, viewed it multiple times, fallen in love with all it offers, devised grand dreams of renovations and additions and now it’s the day of reckoning… auction day. I’ve been to a couple auctions and even bid on a few properties. It can be nerve racking. To the unseasoned bidder, and lets face it property auctions aren’t something most of use practice on a regular basis, the whole experience can be very intimidating. These are some tips which will help you keep your cool and hopefully land the place of your dreams at a price you can afford.

The first set is to do your homework and make sure you’re well prepared for auction day. If you’re purchasing jointly, make sure you discuss with your financial party exactly how much you are able to financially commit to the purchase. Visit a lending institute and discuss the finances to establish how much you can afford to borrow. This will define an upper limit to which you can bid. You’ll also want to consider what is a reasonable price for the property. You don’t want to overcapitalize or over value the property regardless of how much you are able to borrow. Make sure anyone who is going to be financially committed to the property is completely comfortable with the upper bidding limit and understands all risks and requirements. Factor in a bit of forethought. Situations change and you want to make sure you’re still in a financial position to make any necessary repayments. Job losses, newborns, deaths, interest rate changes and taxes are all future uncertainties. You want to make sure there is a bit of breathing space between your financial commitments and any potential disasters.
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Shopping for a Mortgage?

May 5th 2006 02:43
If you’re looking for a mortgage your first port of call should be the Mortgage Industry Association of Australia, MIAA. The MIAA is a national association for mortgage brokers, managers, lenders and originators. They ensure members operate with ethical business practices and follow policies in accordance with Federal and State government regulations. This is an important consideration for anyone considering the financial commitment of a mortgage. There are currently over 8000 registered members of the MIAA. This is a direct link to their search page which will help you find a mortgage provider in your area.

As a borrower you are entitled to certain legal rights. No matter who you choose to get a loan from, this is a checklist that summarise your rights,
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A Closer Look at Negative Gearing

May 4th 2006 04:36
I briefly covered negative gearing in a previous post. I’m going to expand on it and offer some further advice.

An investment property that's negatively geared is purchased with a loan that has an annual net rental income amount that is less than the annual interest paid on the loan, plus the deductible expenses associated with maintaining the property. You get tax benefits by being negatively geared as you are able to deduct the costs of owning an investment property from your overall income. The biggest part of this deduction is the interest portion of your mortgage, but you can also claim such expenses as property management fees, loan costs and repairs. Negative gearing is favoured by people in the high income bracket as it is used as an income deduction to reduce an overall income into a lower tax bracket. Effectively lowering the taxable income and perhaps the taxable rate. It can be a dangerous temptation, the more you borrow, the more interest you pay and the greater your income deduction. However there are several points to consider when deciding your level of financial debt and commitment.
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What is Capital Growth and Measuring Investment Re

May 3rd 2006 04:15
Capital growth is the money you make as the value of your property appreciates. Whilst there is no written rule or guarantee properties generally appreciate in value with time. In boom times, some properties across Australia have doubled in value over short periods of time. These bursts of appreciation are generally short lived and whilst quick profits can be made, it takes an astute investor to predict a boom and buy into the market prior to the explosion of property value. For long term investment, steady growth can be reasonably expected from the property market. For advice with measuring and assessing the capital growth of your property comes this advice from Personal Investor Magazine,

“Measuring your investment in residential property to a benchmark is brand new for Australian investors. Yet it is essential. Without one, you don't know if your property investment has been a winner or an expensive flop. With one you will be able to set long-term goals and achieve them. Yardsticks are important so that you can compare apples with apples. For shares you would use the ASX 200. For listed property, the listed property index. For fixed interest you would use the UBS Warburg Australia composite bond index… Australian property investors have largely been flying in the dark when they buy residential property with no benchmark to guide them. But an All Housing Accumulation Index from Rothschild and Assirt does give a measure of total return, taking into account rental income on houses and units, capital growth on certain standard dwellings and subtracting the costs of property ownership expenses such as floor coverings, insurance and repairs that are monitored in the consumer price index.”
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Why Invest in Property

May 2nd 2006 03:52
In order to build long term wealth, it’s a no brainer that you need to diligently put aside savings and invest this money wisely so as to firstly offset depreciation by inflation and also maximize your rate of return. There are several investment options, managed funds, bonds, holding accounts, shares and property investment. Rates of return are usually associated with a level of risk. Generally, investments which deliver the greatest rates of return are associated with the greatest risk. That is to say that these investments are highly volatile. In good conditions, an investment can yield astronomical rates of return. Conversely, in bad conditions, these investments can also suffer high levels of loss. The shares market is considered a risker investment compared to the property market. That is to say that the shares market can potentially make greater returns, however, the property market offers greater stability and security in comparison.

For longer term investments, such as retirement funding, the security of the property market makes it a favourable option compared to the risker shares market. The property market is tends to be the haven investors rush to when other assets suffer. In practice, a good retirement investment strategy would include a combination of several types of investment options to insulate against a crash in any given investment. Like all investments, a property asset must be monitored to ensure that adequate returns are being yielded by the property.
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