Viewing by month: April 2010

Holiday homes and investment properties - have you considered these locations?

I was recently talking to some ski fanatic friends of mine who are thinking about buying a place in the NSW snow fields to visit once a year.  Based on their research so far, the limited number of properties available and their associated (often high) prices are proving to be a bit of a barrier.  I’m sure my friends are not alone in this finding. 

Our conversation got me thinking about others who own holiday homes or investment properties, basically properties that are not used as a primary residence, and the quite distinct locations that people seem to lean towards.  With house prices increasing at the rate we’re seeing now, perhaps the purse strings may be a little strained by a purchase in an area that is an obvious choice.  I thought I’d use this blog to explore the notion of buying in less obvious areas and thinking outside the box when it comes to property.   

When it comes to holiday homes, the majority of the people that I talk to seem to want to be near the beach in summer and the snow in winter.   I’m not denying that these types of areas are both fantastic to visit, but some waterfront properties can definitely cause a bit of pain to your bank account.  How can you look for something that fits comfortably within your price range, yet satisfies what you want to get from your time away?

I would start with identifying what it is that you want to achieve through buying a holiday home.  Is it time away from the city in a beautiful location? A peaceful environment to clear your head after a busy week at work? Perhaps you want to be close to people and amenities such as food supplies?

There are a great number of different locations that you may not have even considered looking in, because they don’t immediately fit with your idea of where a holiday home should be.  Mountainous regions, for instance, can be amazing getaway locations.  There’s nothing like a bit of mountain air to clear the head, and the scenery can be truly stunning.  If it really is the beach you’re after, why not look in the next couple of suburbs along or back from the water.  It may not be as close as you’d like to be, but the price tag will certainly look a bit more attractive.   The same goes for the snow as well.      

The same ‘thinking outside the box’ approach can also be applied when considering the purchase of an investment property.  I constantly come across people who are hesitant to buy in areas outside of where they live themselves.  If you are comfortable with prices in your own area, then by all means purchase nearby.  However with many locations reportedly experiencing soaring house prices, close by may be out of the question. 

Buying interstate or intercity does not have to be daunting.  Property managers can be appointed to run your investment, a tactic which would often be recommended even if the property was nearby.  Without the restriction of location, you can really do your research and nut out the areas that you feel are growing in value, but where prices are reasonable and within your budget now. 

I suppose the essence of what I’m saying is that you don’t have to purchase a holiday home or investment property in areas that you’d always assumed were the best in which to do so.  If you put a little bit of creative thought into it, you may realize more from your investment value-wise or find an unexpectedly great home away from home. 

1 comments | Posted by Charles Tarbey on 28/04/2010 at 4:14 PM | Categories:

Tips for selling your home in the winter months

I probably sound like a broken record, but who can believe how quickly time is flying? It seems like only yesterday that I blogged about how best to approach selling in the hotter months.  Now there is that distinct chill in the nighttime air that can only mean winter is fast approaching.

Interestingly, people often shy away from selling during the colder times of the year. I think there is often an assumption that as other sellers will be waiting for the busy activity of the warmer months, so too should you.  Although I can understand the thinking, this view tends to frustrate me a little bit.  

Why not embrace the quieter competition that the middle of the year usually offers? There will always be active buyers in the market at any time.  Think of those who sold properties in February and March who will now be looking to buy before settlement periods end.  Or people who have been house hunting for an extended period – they won’t stop looking just because it’s winter!  The reduced competition may mean you end up with a better price than if you’d sold in the high volume warmer weather. 

Throughout my time at CENTURY 21, I have seen some great ways of making properties seem more attractive in the winter months.   A good start is to make sure all outside areas are tidy.  This means raking up leaves and clearing away any dead flowers. 

Let in as much natural light as you can during times that prospective buyers are inspecting your property.  Curtains, shutters and blinds should be opened wherever possible – this simple act will make rooms feel more spacious regardless of the weather outside.   Try to also ensure that windows and light fixtures are sparkling clean. 

Mirrors are also very effective in making your home feel and appear much more open.  This is true in summer too; however the daytime grey that often accompanies rainy winter days can require a little bit more effort to combat.  Create a feeling of space by positioning mirrors opposite windows and in especially dark rooms.   

If your interior needs a fresh paint, try to avoid dark colours, which will simply make a room feel smaller.  And if it’s a bit chilly outside, turn up the heat! You want people to feel as at home straight away.  But try to make sure the temperature is comfortable – some people tend to get nervous if they start to perspire. 

My CENTURY 21 colleagues and I really do believe that selling your home in the colder months can have significant advantages.  If you’d like to sell your property, or would just like some advice on timing, please pop into one of our many CENTURY 21 offices nationwide for a chat! 

1 comments | Posted by Charles Tarbey on 22/04/2010 at 4:37 PM | Categories:

The benefits of using a property manager for your investment

Everywhere I look at the moment, people seem to be buying investment properties. I find interesting the number of people who don’t understand the effort and time that is often required to successfully rent a property out to tenants and maximize the return on your investment. 

As a time-poor investor myself, I usually find that the most cost effective and time efficient way to manage a property is to use a professional management service.  Many people doubt this, probably because there’s usually a fee involved, but I really do believe that the experience of a manager can help to maximize the value of your property and the returns you receive. 

Guess what? Properties don’t just rent themselves out!  Good quality tenants need to found (i.e. advertised to) and then deemed suitable.  Experienced property managers will have proven screening systems in place and possess the know-how required to approve credible applicants.  Remember, vacant days and high tenant turnover are expensive and can reduce the return you will receive in the long run.  

A property manager may also be hugely helpful when it comes to difficult tenants.  Do you want disgruntled residents calling you about a leaking roof or broken toilet? I certainly don’t! A manager acts as a third party between you and your tenant so you don’t have to deal with any disputes. 

Setting a market appropriate rental price is a very important aspect of maximizing your investment returns.  Property managers have the experience in market analysis needed so as to maximize the rental rate your tenants are paying, without setting it so high that the property is empty.  

Tenant inspection and property maintenance are ongoing issues with investment properties.  Not only can these activities be time-consuming if you take it on yourself, they can also be expensive.  Property managers have a huge network of contacts with whom relationships have been established over time, the same as you will have in your own profession.  These contractors will often charge the manager less than if you as an owner were to just pick somebody out of the phone book.     

The process of renting out a property is accompanied by a vast array of legal requirements, covering everything from when rent is considered overdue to the use of double sided deadbolts on doors.  These laws tend to be complicated and can be accompanied by inconvenient consequences if not followed correctly.  Dealing with rental properties everyday, a professional property manager will be well-versed with all legal aspects concerning your property and can thus reduce the liability on your part.   

As you can see, there really is a lot to take into account when renting out your property.   In my experience, the value of using an experienced professional property manager can often outweigh the costs associated with doing so.   Please feel free to contact any member of the CENTURY 21 team for information about buying an investment property or our property management services.  



0 comments | Posted by Charles Tarbey on 20/04/2010 at 4:42 PM | Categories:

Where will you be living in 2036?

The subject of Australia’s population seems to be quite a hot topic in the news at the moment.  Over the last few weeks I’ve read in The Australian that our country’s population is growing at double the world average, with Sydney alone expected to top six million people by 2036 according to The Sydney Morning Herald. 

Being in the real estate industry, these figures are of great interest to my colleagues and I at CENTURY 21, and I’m sure you’ll be able to guess why.  With other reports in the media of late about Australia potentially facing a bit of a housing supply issue, where are all these people going to live?  I’ve used this blog to bring together some of the ideas I have about where we’ll all be living in the not too distant future. 

I think it’s fair to assume that with such massive growth predicted Australia-wide, we’re going to be able to expect percentage increases similar to that anticipated in Sydney in all of the country’s other capital cities.  I can see state governments being forced to release more land for development and mass residential construction projects getting underway.  Australia’s cities may develop into regions of predominantly high rise living, not just in the core CBD areas, but in suburbia as well.  We’re already starting to see this now. 

Innovative architectural practices are going to have to come to the fore – Australia’s capital cities have so many historical buildings of significance, there needs to be a way to incorporate these into practical modern living environments.  I’ve seen a great example of this on Sydney’s York Street, like it or hate it, – where Scots Church was converted into a 146-unit apartment building, with its new towers perched above the old Neo-Gothic style church, whose congregation still meets there.    

To ease the burden on CBDs, governments will likely encourage and incentivize the movement of people and businesses to second tier CBDs like Parramatta in NSW or even the Sunshine Coast/Gold Coast in Queensland. This in turn should see solid growth in commercial and residential real estate markets in those locales. It might be worth taking note of this trend when considering where to buy your investment property.

Moving away from the cities, areas once considered farmland may take on an appearance similar to the city suburbia you see now.  Again, in some areas this is already happening.  All of the areas considered conducive to easy living (i.e. close to a water supply and major transport infrastructure) but not close to the city will eventually be populated and new hubs of activity will come to exist. 

In a nutshell I expect to see new developments sprawling both upwards and outwards in the future and a new vibrancy to ascend on second tier CBDs.  As I’ve said in a previous blog, population growth can bode very well for making capital gains on property. Try to seek independent advice detailing where this growth may occur and you may do very well out of some strategic property investments in the long term.



0 comments | Posted by Charles Tarbey on 19/04/2010 at 3:29 PM | Categories:

Rising interest rates and real estate

Well, I think we can finally assume that it’s official; interest rates are on the rise.  Last Tuesday saw the Reserve Bank lift its cash rate by 0.25 of a percentage point, taking it from 4 to 4.25 per cent.  This was the fifth time the Bank increased rates in a seven month period and they show no sign of slowing down.   

One of the most important things to keep in mind is that rising interest rates usually indicate that an economy is strengthening, which means good news for jobs, incomes and business.   

Having said this, rising interest rates can still be a huge source of concern for homeowners, especially those with mortgages.  However we must still be mindful that rates remain historically low and shouldn’t be a deterrent to owning property.  As the Treasurer, Wayne Swan, said last Wednesday (7 April), although repayments on the average $300,000 mortgage will now be higher, these payments are still more than $500 a month less than what they were in late 2008 before the Reserve Bank started cutting rates in response to the Global Financial Crisis.  

While people may have less money in their pockets now, CENTURY 21 is predicting a steady rise in the value of homes over 2010.  Indeed, this rise is one of the main reasons the RBA is lifting rates.

The Governor of the Reserve Bank, Glenn Stevens, has stated that the housing market is still characterized by considerable buoyancy, with house prices continuing to increase.  If property buyers take the time to research the market, seek good independent advice and appreciate the forces at play currently, they may realize that the detrimental effect rate rises will have on income may not outweigh the capital growth they expect to benefit from in their homes.

 Having said all of this, it is very important for mortgage holders to consider the steps they can take to deal with last week’s interest rate rise and to plan for almost certain future increases.  Homeowners should consider ‘budgeting for the future’- a process that should take into account different interest rate increases.  Try to make changes to your spending and save more now so that you are financially prepared for the rises if and when they do come.   Even the smallest of changes can reduce the life of your mortgage and the interest you pay.  For example, paying an extra $100 per month above your minimum repayment, or moving from monthly to fortnightly repayments, can drastically reduce your principal amount and get you to full home ownership sooner!

With house prices still on the increase, my colleagues and I at CENTURY 21 do not expect demand for property purchases to falter too much with this rate increase announcement.  If you are considering selling your own property, are looking to purchase, or just need some advice, feel free to drop you’re your local CENTURY 21 office for some friendly independent advice.

0 comments | Posted by Charles Tarbey on 14/04/2010 at 4:05 PM | Categories:

For Buyers - How to Confidently Prepare to Buy at Auction!

So you’ve just sold your house (see previous blog –For Sellers – How to Handle the Auction Experience), this is your first time buying, or you’re bidding for an investment property.  Given the auction frenzy that seems to be occurring in the market at the moment, it seems that whatever your reason for purchase, participating in an auction could very well be a process you’ll have to go through to buy a property.  Having been through the auction experience many times myself, I thought I’d use this blog to pass along some tips to help make your experience a success – at the right price! 

Firstly, and I can’t stress this enough, be prepared! Before the auction takes place, do your homework on both the house and the area.  Make sure you’ve inspected the property two or three times and are certain it’s right for you and have a building inspection conducted so that you are well aware of any potential issues in advance.   Try to get an idea about property values in the area by monitoring sales over past months and have a look around the neighbourhood to determine that it has what you’re after in a community. 

It is also important to seek expert advice prior to the big day.  If you intend to get financing for your home, arrange it beforehand and talk to your loan advisor about how much you can actually afford to spend.  Also make sure you have a copy of the contract of sale, and get your solicitor to go through it with a fine-tooth comb. You want to know exactly what is to be included in the sale before going in to buy.    

When it comes to auction day, try to stay calm and make sure you have a plan.  I can’t tell you how many times I’ve seen bidders get caught up and bid way beyond their means, spending much more than planned.  Set yourself a firm limit and stick to it, avoid getting into personal bidding wars with other bidders and try not to get too emotional about a property – there will always be other properties to choose from!  

If the auction hammer falls and you are the highest bidder, congratulations! Remember – you’re going to need your cheque book to pay the deposit on your new home and you’ll need to sign a binding contract.  There are no cooling off periods after an auction, so make sure going in that you are 100% sure that this property is for you.   

CENTURY 21 agents are local area experts and will be able to assist you with identifying the correct property for you.  Pop into a nearby agency and get into your ideal home sooner!     


0 comments | Posted by Charles Tarbey on 09/04/2010 at 9:32 AM | Categories:

How to handle the auction experience (for sellers)

For anybody considering selling their house, the auction method can seem quite daunting.    I mean, who wants to stand around watching a group of strangers play bidding wars to buy your home, or worse still, what if nobody bids at all?   While thoughts of these scenarios can certainly be stressful, as somebody who has had quite a bit of experience with auctions, I can tell you that the benefits of selling your home through the auction process are hard to overlook.  And by doing just a few things to prepare, I can assure you that, on the whole, the experience will be far more enjoyable.  

 Let’s start with the ‘why’.  How will selling your property through auction be advantageous for you? Firstly, the marketing campaign designed around an auction is quick and intensive, cutting down the time that a, you have to wait for your house to be sold and b, you need to have your home looking at its very best.  Believe me, constantly mowing the lawn and cleaning kids’ bedrooms can be very tiresome! 

 Probably the biggest benefit to selling through auction is the competition, where adrenalin-fuelled potential buyers bid against each other, knowing that they must act within a specific timeframe to secure the property, otherwise they risk losing it.  This environment often results in buyers paying more for your property in an unconditional purchase where a binding contract is signed and a deposit is paid on the day.  

 So, what can you do to make an auction less stressful? Always be prepared.  Make sure to set a reserve price that you are comfortable with and will be happy if your home sells for this amount.  Ensure that you have closely read over the Contract of Sale with your agent and know what is to be included in the sale (e.g. curtains, appliances).  Invite a close friend along for support and arrange for young children and pets to be taken care of on the day. 

Most importantly, make sure you have a good bottle of champagne nicely chilled to be popped open after the hammer drops! 

CENTURY 21 Australia successfully auctions properties in all price brackets and locations.  Our expert agents are able to guide you through all aspects of the auction process from legality to setting a reserve price, ensuring the experience is both a successful and happy one! 

0 comments | Posted by Charles Tarbey on 07/04/2010 at 1:28 PM | Categories: