The election is over and the Liberal Government has won again. This is good news for investors who want to keep negative gearing their investment properties, but it's even better news for first home buyers who can't afford a deposit to purchase their first home.
Scott Morrison has pledged to help first home buyers purchase their own home without a substantial deposit, by way of his First Home Loan Deposit Scheme.
WHAT IS THE FIRST HOME LOAN DEPOSIT SCHEME?
In the past, if you borrowed more than 20% of the purchase price, the banks would charge you lenders mortgage insurance. The First Home Loan Deposit Scheme helps first home buyers to save $10,000 on their Lenders Mortgage Insurance, enabling them to purchase a house with a deposit as low as 5%. This is a massive reduction from the 20% deposit that banks usually require. With this scheme, you can bypass the bank's lenders mortgage insurance and borrow as much as 95% of the purchase price, which is a blessing to first home buyers who had trouble saving for a house deposit.
WHEN WILL THE FIRST HOME LOAN DEPOSIT SCHEME START?
The First Home Loan Deposit Scheme will start on 1 January next year. So if you're a first home buyer wanting to purchase your first home within the next 6-12 months, but can't seem to save up the required 20% deposit, owning your own home can now be on the cards for you.
WHO CAN APPLY FOR THE FIRST HOME LOAN DEPOSIT SCHEME?
Individuals earning up to $125,000 per year, or couples earning a combined $200,000 per annum, who haven't purchased a home before, can apply for the scheme. Support will be targeted to entry level properties only. The value of home that can be purchased will be determined by the area that you choose to purchase in.
Visit First Home Loan Deposit Scheme for more information on how to apply.
If you would like some more information about buying your first home, please contact me for more information, or have a look through the properties that I currently have for sale.
Property is one of the best investments you can make, if you know what you are doing. With the market as it is right now, it’s a great time to buy an investment property and secure a house, townhouse or unit while prices are low.
We are seeing a lot of longer days on market and vendors are even dropping prices to try to get the home sold quickly. If you're a property investor, this is the perfect time to buy, as there is also a lot of choice of homes listed for sale.
A lot of potential investors sit around and wait for the market to be right for their terms, however if you wait too long, the market can change and you might miss out on some really good investments while you wait. Don’t wait for the market to change, if you are ready to buy an investment property - you are ready!
People have been asking me how the upcoming election is going to affect the property industry. If Labour gets in and abolishes negative gearing, a lot of property investors who use this strategy may end up having to sell their investments, as they won't be able to claim the loss on their tax anymore and they will loose a lot of money if they continue to hold onto a negatively geared property. If this happens, and investors put their properties up for sale, it will continue to be a buyer's market and you will be able to pick and choose from all the cheap properties listed for sale.
POSITIVELY GEARED PROPERTIES
If you purchase a property which needs a quick cosmetic renovation, you can actually benefit from the slump in the market. By purchasing a cheap property, renovating it, getting it re-valued and holding onto it and renting it out to pay off the mortgage, you will create a positively geared property that pays for itself.
If you have a property that is positively geared, when property prices rise again, you can sell the property and have a tidy profit in your back pocket.
property investment checklist
How do you know if you’re in a financial position to invest in property?
To begin your investment property journey, you need to do a number of things:
Download my property investment checklist to make sure you are prepared when it comes time to buy an investment property. If you have any questions regarding property investment, please comment below or give me a call on 0414 520 853.
DO I NEED TO SPEND MONEY TO MAKE MONEY?
When selling your home, it is vital that you spend money on the right things when getting your home ready for sale. Deciding how much money to spend is a tough one though, because you don’t want to over capitalise and end up loosing money if the home doesn’t sell for the price you want. However, there are things you absolutely must spend money on, to ensure you do get the most amount of money back when selling.
WHAT DO I NEED TO SPEND MONEY ON WHEN SELLING?
During an open home, buyers are usually are looking for everything that they can possibly find that is wrong with the house. If they see things that need repairing they will add up all the costs involved to fix the house, before they can move into it. When they do this, they are usually deducting money from their offer price - IF they decide to put in an offer.
So spending money to fix anything that needs repairing before you list the house for sale is vital. It will add value to the property and buyers won’t be able to discount the purchase price if they can’t see anything wrong with the property.
COSMETIC RENOVATIONS ADD VALUE
One thing that will add value to your home is painting. If you paint both the interior and the exterior of your home, it will make it look clean and fresh and this will definitely add value to the property. If you have a larger budget, you could look at replacing or updating tired kitchens and bathrooms, as these rooms add the most value to a property.
If you only have a small budget and can’t afford to replace a whole bathroom, you could do other simple cosmetic renovations such as replacing tap fittings, spray painting old bath tubs or vanities, or replacing fixtures such as towel rails and toilet roll holders.
If you don’t have the skills to complete a cosmetic renovation yourself, you can always hire someone who can. There are a lot of tradespeople out there who will be able to co-ordinate a renovation for you. Yes you need to pay them for their time, but think of it as a short-term investment that will see great returns when you sell the home for much more than it was originally worth.
STREET APPEAL ADDS VALUE WHEN SELLING YOUR PROPERTY
Another thing to think about when getting your property ready for sale, is the street appeal. Make sure your home looks good from the outside, as potential buyers will often drive by before inspecting the property and first impressions are usually seen from a car window. After doing a drive-by, buyers will decide whether the property is worth their time to inspect the interior.
ADVERTISING YOUR PROPERTY ONLINE
When working out a budget for advertising your home for sale, there are several factors to consider. The largest cost when it comes to selling your home is advertising online. realestate.com.au and domain.com.au are the two most common online selling platforms and they’re the most expensive as well. Buyers usually scroll through all the listings until they see properties that suits their needs, and then don’t bother looking through all the rest of the listings. Therefore you want your ad to be one of the first listings at the top of the page, so it gets onto their list of inspections.
Advertising on social media also plays an important role in marketing your property, as through these channels, you can reach people who aren’t even looking to buy a new home. Someone might be scrolling through Facebook when an ad pops up on their screen and this prompts them to think about their brother/mother/friend who is looking for something and they may share it with them. Or they may even fall in love with your property and want to buy it for themselves.
PROFESSIONAL PHOTOGRAPHS, DRONE PHOTOS AND VIDEOGRAPHY
The next thing to consider is getting professional photographs of your home. When you list your home for sale, you want to present your home in the best light. To attract more buyers to your open homes, it helps to have beautiful photos of your home for marketing purposes. If you can afford drone photos (from above) and a video of the property, this is also a great option, as listing with videos are viewed 3 times as often as a listing without a video. Drone images are also a great way to show how close to the city your property is.
One of the first thing that buyers ask for when enquiring about a property for sale, is a floor plan. They want to see if the bathroom is next to the bedrooms and how far the kitchen is away from the back deck etc. Investing some money into a floor plan is one of the ways to keep a buyer looking at your listing for longer.
Another option to consider when selling is a photo signboard at the front of the property. When buyers do their drive-by (while checking out your street appeal) if they see a sign out the front with beautiful images of the interior, this will make them more likely to want to see the inside for themselves.
Professional brochures are also a great marketing tool to have, as buyers don’t just go to one open home on the weekend - they go to multiple. If your property has a beautiful fold out, glossy brochure and the other homes just had simple A4 paper brochures, yours will stand out in their minds more, and they will come back to look at it more often.
how much money do i need to spend when selling?
It really comes down to the area in which you are selling, and how quickly you want to sell. The more you spend, the larger the audience will be that you can reach. Greater advertising exposure means more people at your open homes, which in turn can create competition amongst buyers, driving the sale price up and the sale to a quick close.
who pays for advertising?
It’s the seller’s responsibility to pay for their own advertising, however some cheaper Real Estate Agents will offer to pay for your marketing to ensure they get the listing. I would be reluctant to sign up with a Real Estate Agent who offers to pay for your marketing as they are usually inexperienced and when push comes to shove, if they can’t sell your property for the price you want, they may try to convince you to sell at a reduced rate, so they can recover their marketing costs.
Hopefully this blog post has helped you to decide what to spend your money on when selling your home. Your Real Estate Agent will go through all the different marketing methods that will work for your property and you can both decide on a package that suits your needs. Please feel free to leave a comment below or get in contact with me to discuss the sale of your home.
If you would like some more tips on how to sell your home for more money in less time, please download my guide below.
When it comes time to sell your property, you need to decide on when you will be moving out and into another home. Do you move out before the sale, or after it, or somewhere in between? There are many factors that will help you to decide when the best time to move out should be and I'm here to tell you about the pros and cons for each option.
MOVING OUT BEFORE SELLING
If you decide to move out before selling your property, it can often help to sell the property quicker if it is not lived in. If you have the financial means to move out before selling, this option is the best way to prepare your property for sale.
Pro - Any last-minute repairs or renovations can be done without putting you out, like painting, or floor finishing, etc. If you can afford to bring in an expert, a home stylist can also be brought in to style your home to help to add value to the property. When buyers see a nicely styled home for sale, they automatically perceive the home in a higher price point than if it was empty. If you have moved out of the property, you don’t have to stress about maintaining the styled home constantly while the home is on the market.
Con - The biggest problem with moving out before the home sells, is that the market is unpredictable and it could easily take months to sell your home which in turn would cost you money in interest payments to the bank.
MOVING OUT AFTER THE SALE
The most common option is for the seller to live in the property while it's for sale and then to move out just prior to the settlement date once the property sells. It is most common to move out one or two days before settlement date, so final cleaning can be arranged before the pre-settlement inspection takes place.
Pros - You won't need to pay for two mortgages (or mortgage and rent) if you're still living in the property while it's being marketed.
Cons - You will have to keep the house clean and tiny and put up with disruptions to your day to day living because of open homes and inspections during the week. The house may not present as well as if it was styled, if you have older furniture displayed. It may be hard for buyers to envisage room sizes and how their own furniture would in the property, if yours is still in the house.
Another option for sellers is to rent the home back from the new owners for a period of time after the house is sold. Although not a common option, it does happen from time to time.
I hope this has helped you to make a decision when to vacate your property. If you are considering selling and would like some advice on how much your property would be worth in the current market, please give me a call on 0414 520 853 or flick me an email: email@example.com.
If you would like more tips on how to sell for more money, download my free guide below:
HOW RENTAL YEILD WORKS
Have you heard people talking about rental yield but don't actually know what it means? Let me explain it for you in basic terms.
Rental yield is rental income as a percentage of the property’s value. The rental yield will change depending on which state you own property in.
For example, if you buy a property for $600,000 in Brisbane and it’s currently rented for $500 a week, to work out the rental yield, you would divide your total annual rental income ($26,000) by the value of the property. In this case, your rental yield would be 4.3%.
Example: Property value $600,000 and rent $500 a week.
$26,000 ($500 x 52 weeks) (annual rental income)
/ (divide) $600,000 (property value)
x (times) 100
Rental yield = 4.33%
If you buy a property in Hobart for $120,000 and rent it out for $180 per week, your rental yield would be:
$9,360 ($180 x 52 weeks) (annual rental income)
/ (divide) $120,000 (property value)
x (times) 100
Rental yield = 7.8%
So straight away you can see the difference in rental yield between a property in Queensland and a property in Tasmania.
The more you can close the gap between what your property is worth (through renovating it or capital growth, etc) and the rent it brings in, the higher the rental yield will be.
If you need any help with leasing your property, please get in contact with me.
If you would like to download some of my free real estate guides, to help you along your real estate journey, hit the image below.
If you haven't been hiding under a rock lately, then you would have heard that the housing market is in decline. This is not entirely true. If you own a house in the city of Sydney, Melbourne or Perth, then yes, it's all doom and gloom however, if you own property in Brisbane, you can count yourself lucky because the market is about to turn around.
THE PROPERTY INVESTMENT CYCLE
To understand why I say this, let me show you this image of how the property investment cycle works:
* Source - Cherie Barber (Renovating for Profit)
The Brisbane housing market is about to jump from the slump section of the graph, to the recovery section. We've already seen property prices fall, high rental vacancies, tradespeople advertising for more work, and at the moment there are more properties on the market than late last year and we are starting to see more buyers at our open homes again. Therefore, over the next few months, we are tipped to see rental increases and low rental vacancies, housing levels tightening and prices rising yet again. Now, as no one can predict the future, whether this takes 3-6 months or 1-2 years, is still to be seen. Usually a property cycle lasts 7-10 years, so those who have bought a property in the past 5 years, will have done quite well for themselves in regards to gaining equity in their homes.
THE DECLINE IN BRISBANE UNITS AND TOWNHOUSES
The past year has seen a decline in townhouse prices and days on the market, as the market was saturated with apartments for sale. There wasn't a big demand for units and townhouses in Brisbane, as property developers were building them quicker than we could say "luxury apartments". However, it seems that the market has finally caught up with the property developers and units are becoming in demand again, as buyers are wanting to buy a property close to the city but can't afford the hefty house prices that come with it.
We are starting to see Brisbane units and townhouses with higher listing prices, shorter days on the market and multiple offers popping up here and there, and in my opinion, prices will start to climb for these kinds of properties before the year is out.
Image: Penthouse for sale in Brisbane 1, South Brisbane
WHEN IS THE RIGHT TIME TO BUY?
A lot of people are hesitant to buy when industry experts are saying that prices are dropping, as buyers are waiting for the bottom of the market to hit, but the sad news is that no one can predict when the market will hit rock bottom. If you keep waiting for prices to go down even further, chances are that they will come back up again and you'll have missed your chance to secure a property for a good price.
The best time to buy a property, is whenever it suits your needs. If you're looking to purchase a house to add to your portfolio and you keep waiting for the perfect time to come along, you will probably miss out on a lot of benefits while you're waiting. Savvy investors need to block out a lot of what the media is saying and purchase properties based on what's right for them at the time.
If you're a buyer who's looking to renovate and create some equity in a property, now is a good time to enter the market, while prices are still low. Houses can be renovated, held and rented out until the next property cycle hits and sold for a profit or re-valued and be used a stepping stone to purchase another property.
WHAT MAKES A GOOD INVESTMENT IN A DECLINING MARKET?
We currently have a few good investments listed for sale including some new developments, which are due for completion soon, which come with a rental guarantee for investors. If you purchase these properties in a declining market, when the market goes up again, your property should increase in value too.
If you would like some advice on purchasing a property or would like to see what we currently have on the market, please give Kelly Pack a call on 0414 520 853 to discuss your needs. If you're looking to add to your rental portfolio, we have some fantastic off the plan investment opportunities at the moment, some even come with a rental guarantee of 6% for 2 years.
Enquire now while prices are still low and you never know, if you get in soon, you could gain some equity quite quickly while you're earning an income in the process.
Please feel free to comment below or get in touch with me.
Have you ever wondered why Real Estate Agents charge so much commission? And why should you sell with an Agent, rather than trying to sell your house privately? Let me give you some inside information...
First of all - Real Estate Agents have costs, just like any other profession. There’s a fee to do the courses required to become a Real Estate Agent and keep your skills up to date, there are licence fees to keep registrations current, we need to pay insurance, lease fees for the office, bills like electricity, phones, car costs (we are always in our cars, so we use a LOT of petrol), we have to pay for settlement gifts when a property sells, and marketing (ie. flyers drops and Facebook ads) to get our name out there, and the list goes on. So, in reality, it’s just like any other business, in that respect. Also, if a Real Estate Agent is working for someone else's company (ie. if the Agent has a boss to report back to), we also need to give some of our commission to the principal of the office as well. So we definitely don't get to keep all of it ourselves.
According to Payscale the average Real Estate Agent in Brisbane earns just over $52,000 per year, which is roughly about $25 a hour. But remember - I did say average. Some of the better Agents in the area are probably earning anywhere from $80,000 upwards a year, depending on how many houses they can list and sell. But to be achieving that sort of money, they would probably have spent $1,000's of dollars on training to better themselves in the long run.
Why should you sell through a Real Estate Agent instead of privately?
I'm glad you asked. Once a Real Estate Agent does the course to become certified, they learn special skills such as marketing, copywriting, styling, selling, negotiating, and how to price homes in the current market. They also have knowledge on local council restrictions (what can and can’t be done with the block of land/home renovations). They acquire communication skills that enable the Agent to know what the buyer is thinking when they put an offer in, and if they can offer a higher purchase price. They have skills to create competition in the market to drive prices higher than the asking price and they also have a database of buyers waiting to purchase properties, so as soon as you list your property, you have interest straight away, making the selling time shorter.
So, when you pay for commission, you’re not just paying for the Agent to sell your house, what you’re actually paying for is an Agent’s skills, their database, professional contacts within the industry, knowledge of the current housing market and how to price your home within it. You’re paying for someone who knows how to negotiate and get the best possible price in the shortest amount of time. So why wouldn't you use one when selling the largest asset that you will probably own in your lifetime?
What if I hire a cheap Agent? – I hear you ask yourself. Are cheap Agents worth it? It may be tempting to sign up with the Agent who charges the cheapest commission, however you’ll usually be better off going with the BEST Agent rather than the cheapest, and here’s the reason why - A cheap Agent won’t get the best price for your property, but the best Agent will. That’s why they’re the best. Even if the best Agent charges more in commission, you will usually have more in your pocket after paying their commission because they will get you the most money for your property.
Here’s an example:
A cheap Agent will sell your home for $600,000 and charge you $10,000 in commission, leaving you with $590,000 in your pocket. The best Agent will sell your home for $650,000 and charge you $20,000 in commission, leaving you with $630,000 in your pocket.
See how it works?
Even if you sell your property privately yourself and end up getting $620,000 as a final sales price (with no commission), you would still be $10,000 better off hiring the best Agent, even after paying their commission.
And it’s the same with marketing costs. A cheap Agent will hook you in with cheap marketing costs to get you to sign up with them, even though everyone knows that the more exposure your listing attracts, the more people will see it. ie:
A cheap Agent will charge you around the $1,000 mark for upfront marketing to get the result above. The best Agent will charge you around the $3,000 mark for upfront marketing to get his result above.
So, when you take off the $1,000 for marketing from the cheap Agent, you will only have $589,000 in your pocket, compared to the $627,000 that you would have from the best Agent, after subtracting the marketing fees. That’s an extra $38,000 in your pocket when choosing the best Agent over the cheapest Agent.
And why will the best Agent get you extra money in your pocket when a cheap Agent won’t? Because the best Agent has proven experience dealing with buyers. He’s better at negotiating than the cheaper Agent. He knows how to market a property properly to get the most number of buyers through as possible. He’s not cutting corners like the cheap Agent is. He’s doing absolutely everything in his power to get you the best price for your property. And why is he doing this? Because he wants to keep his reputation as being the best Agent in the suburb.
Ok, so a cheap Agent definitely isn’t the way to go. But you’re confident that you can sell your property privately yourself, without a cheap Agent and without the best Agent?
15 QUESTIONS TO ASK YOURSELF BEFORE SELLING YOUR HOME PRIVATELY:
If you're still thinking of selling privately to save on commission, ask yourself the questions below first:
If you think you have all the above under control and can handle any unexpected situations that pop up during a listing, then by all means, have a go at selling privately and saving the commission that you would normally pay an Agent. Just remember that you probably won’t get as much as the best Agent will get for your property, and that you will end up with less in your pocket than the best Agent in the suburb would get for you, even after they’ve taken their commission out. So why not let someone else do all the hard work for you and reduce your stress load, while achieving a higher sale price because you’ve hired an expert? That’s what we’re here for after all.
When you have lived in your home for a number of years, it becomes easy to overlook little things that need repairing that you have just put up with in the past. However when it comes time to sell, leaving repairs up to the buyer isn't a smart thing to do, as most buyers want to buy a house they can just move in to.
Here is a list of the top 10 things to repair before listing your house for sale:
TOP 10 THINGS TO DO BEFORE SELLING YOUR HOUSE