Viewing by month: May 2017

How Do The New Strata Laws Affect Me?

On November 30, 2016, the New South Wales Department of Fair Trading announced more than 90 changes to strata laws, affecting thousands of owners, renters, strata managers and landlords of apartments and townhouses under strata title throughout the state. In fact, the Department estimates that a quarter of the NSW population lives in, owns or manages a strata titled property. If you are in the market for an apartment or townhouse in New South Wales, then you need to be aware of these changes and how they could affect you in your new home. 

Most of the changes are designed to make living in an apartment or townhouse easier and more pleasant for both owners and tenants and they have largely been welcomed. Here are some key changes to be aware of. 

Sale of blocks to developers

Up until the recent changes, developers could not purchase whole apartment blocks if just one owner objected to the sale. Now it will take a vote of 75 per cent of owners to sell an apartment block to developers, allowing many more older apartment blocks to be redeveloped. 

More pet-friendly apartments

The new strata by laws ensure that both owners and tenants can approach the strata committee for permission to have a pet.

Smoking complaints

It will now be easier for apartment residents to make a complaint if cigarette smoke from a neighbouring apartment wafts into their home. Smoking zones can also be implemented outside of common outdoor areas. 

Renovating 

The new by-laws split renovations into cosmetic, minor and major categories. You won’t need to apply to the strata committee if you are planning a cosmetic update (such as painting a common wall) but a minor renovation will require a vote by the committee and a major reno involving structural changes will require a special resolution at a general meeting. 

More say for tenants

Renters now have the right to attend owners’ corporation meetings and express their opinions if they wish. The strata committee can only exclude tenants when purely financial matters are being discussed. If more than 50 per cent of the residents are tenants, then a tenants’ rep must be elected to the strata committee, but he or she will not have any voting rights. 

Solving parking problems

Owners’ corporations can now make arrangements to move cars illegally parked on common property and for local council parking rangers to patrol their building’s carpark. This by law is aimed at preventing commuters from using strata-owned car parks.

Getting rid of dumped items

Too many apartment dwellers simply dump goods on common property when they move. Owners’ corporations can now remove or sell any goods that are left dumped on common property by former residents. 

Further changes are aimed at strengthening the accountability of strata managers, providing a simpler, clearer process for disputes and reducing red tape. All strata schemes must review their current by laws for November 30, 2017. 

For more information on how the changes will or could affect you, visit the Department of Fair Trading to download fact sheets, subscribe to the strata update newsletter or sign up for a free strata reforms information session. If however, you’re after further information about buying, selling or managing a property, please talk to your local Century 21 agent today.


0 comments | Posted by Administrator on 31/05/2017 at 3:52 PM | Categories:

How to Avoid Capital Gains Tax When Selling Property

Unlike buying your own home, investing in property is a business venture and there’s a lot you need to know well before you dive in and buy. All those house flipping TV shows featuring harassed couples battling to renovate investment properties in record time in pursuit of big profits can be fun to watch. However, how many of them mention potential hiccups such as capital gains tax? 

What is capital gains tax?

Before you take your first big step into property investment there’s a lot to learn about the tax implications, including capital gains tax (CGT) which comes into play when it comes time to sell your property. Capital gains tax does not apply when you sell your own home (your principal place of residence) but can create a significant dent in your profits when selling an investment property. 

In short, capital gains tax is levied on the profits you make when you sell an investment property purchased on or after September 20, 1985. Any gain you make on the sale of an investment property is included in your assessable income in the financial year in which you sell the property and this gain is calculated by subtracting the costs involved in acquiring and holding the property from the proceeds of sale of the property. 

What CGT exemptions apply?

Both full and partial exemptions from capital gains tax apply in certain circumstances. For example, if you have held the property for more than 12 months you are entitled to a 50 per cent discount off your CGT liability. In some cases, you may be able to avoid CGT entirely. You may be eligible for a full exemption if:

You purchased the property before September 20, 1985.

You sell a property that is considered your principal place of residence. In this case, you need to be living in the property while you renovate it to on-sell rather than renting it out. You will miss out on rental income, but all profits on the sale will be CGT-free as long as the land area is less than two hectares. If you buy an investment property, rent it out, then later move into yourself then you are partially exempt from CGT should you decide to sell the property at a later date. 

Under the ‘Temporary Absence Rule’, if you move out of your home and rent it out the property will still be treated as your principal place of residence for a period of six years, so if you sell within this time you are exempt from CGT if you make a profit from the sale. 

You purchase a residential investment property through your Self-Managed Super Fund (SMSF). If you wait to sell the property until after you retire, then you’ll pay no CGT on the sale. 

Under the recently announced 2017 Federal Budget, from January 1, 2018, there will be a new CGT discount for people who invest in affordable housing managed by registered community housing providers and hold the property for a minimum of three years. 

What happens if I make a loss?

If you make a capital loss on the sale of an investment property you will not be liable for CGT plus you will need to speak with your accountant as this need not be a complete disaster. The loss can be carried forward in future years and be offset against capital gains you make. 

As you can see, capital gains tax is a complex issue with many variables. Always seek expert and up-to-date advice from your accountant and local Century 21 real estate agent before buying or selling an investment property.


3 comments | Posted by Administrator on 24/05/2017 at 3:57 PM | Categories:

The Complete DIY Building Inspection Checklist

Buying a house is a major financial commitment, so the last thing you want is to move in and then find a major problem that could be extremely costly to rectify and not have the budget to fix. Having professionals conduct building and pest inspections on every property you are interested in would also be an expensive exercise. One solution is to take the time and trouble to do a thorough DIY inspection of each property yourself using a building inspection checklist, eliminate the properties on your shortlist with the most obvious or potentially costly problems, then call in the professionals to do a full inspection of the property of your choice. 

Doing building checks yourself also has another advantage. Should you find flaws that you would be prepared to live with or can deal with in your budget, you are in a stronger position to negotiate the asking price downwards. 

Here’s a checklist to print out and take with you when you go to inspect a property. 

What to take along with you

A print-out of the checklist

Safety boots

Sturdy gloves

A good torch

Flathead and Phillips head screwdrivers

A power point tester (this can be purchased inexpensively from a hardware store)

A ladder (if the current homeowners don’t have one you can borrow) 

On the outside

If you can access the roof, take a look for broken or missing tiles, rust patches in tin or faded colour in concrete tiles that may indicate the need for new sealant. A sagging or undulating roof could be a red flag indicating underlying structural problems.

Check the guttering for rust, leaks and warping and that downpipes and drainage are in order.

Check all external plumbing for potential leaks or rust.

Ask if any asbestos has been used in the house and, if so, where. If you are planning renovations, asbestos can be very expensive to have removed professionally.  

Check for termite damage. This will most likely show up where timber touches the ground, e.g. the base of walls, pergolas and decking. 

Check all timber, such as veranda flooring, decks and window surrounds for signs of damp and wood rot. 

On the inside

Turn on each tap in the house to check the water pressure, water colour and drainage.

Check all walls and ceilings for mould, stains, water marks and any other signs of ventilation problems, damp or roof leaks.

Check for cracks in walls or doors that stick when you try to open them as these could be signs of subsidence or serious structural problems.

Check that all windows open and close properly and note any cracked or broken panes that will need replacing. If the windows have timber surrounds, then check these for wood rot.

Check that there are no problems with loose grout, cracked or lifting tiles that may indicate water damage in bathrooms.

Check the hot water service for leaks and rust and ask when it was last serviced.

Ask if the roof and walls are insulated and check in the roof cavity if possible.

Inspect all electrical switches and sockets and check all power points with your power point tester. 

Ask for permission to turn on any heating or cooling systems to check they are running well. 

Check over floors carefully and lift all rugs to check they are not hiding problems.

Around the house

Check any trees around the house and in neighbouring properties that could pose a danger and damage the property if they fell down or dropped large branches. 

Check if there are taps in the garden and their condition. 

Check the condition of all fences, gates and external structures such as sheds, carports, pergolas and garages. 

If the property includes a pool or spa, check for cracks or bulges in the bottom or sides, and inspect the filtration system, heating system and lighting. Check the condition of all surrounding paving or decking. 

Check for any wet or muddy patches in lawns that could indicate poor drainage. 

Once you have completed your inspection, go through your notes and consider your findings. What problems did you uncover? How much would they cost to fix? If the problems seem overwhelming then it could be best to move on. If you think the problems are fairly minor and you love the house and think it could be perfect for your needs, then it could be time to put in an offer in writing (citing that it is pending a full building and pest inspection by professionals). 

Taking the time and effort to carry out an inspection using the above DIY building inspection checklist is a great way to consider a property purchase in greater detail and allows you to take off the rose-coloured glasses and make a considered purchase rather than a purely emotional one. For further information about buying property, please speak to a local member of our team now. 


0 comments | Posted by Administrator on 17/05/2017 at 3:59 PM | Categories:

What You Need to Know About Insurance For Your First Home

Amid all the excitement of buying your first home, there’s one important matter you mustn’t forget to arrange before exchange of contracts: insuring your new property. As soon as your offer has been accepted by the vendor it’s advisable to start gathering quotes on home and contents insurance and to lock in a home insurance policy that will be active from the day of settlement. 

This is important not only to protect yourself from loss, but also because one of the conditions of most mortgages is a requirement that you have adequate building insurance cover. In all likelihood, you will need to send the policy details to your lender in order for your loan approval to be finalised prior to exchange of contracts.

What is a home and contents insurance policy?

Most home insurance policies cover both the building itself and your possessions (the contents). The policy should cover the cost of repairing or rebuilding your home in case of natural disasters or accidental damage and also loss or damage to your possessions. 

Most standard home insurance policies do not cover flood damage, but if you are buying in a flood zone, cover may be available for an additional premium. 

Some other potential problems, such as damage caused by electrical failure, may also not be included in the standard cover but can be added at your request. 

How to decide how much cover you need

Before you look for quotes on your home and contents insurance, you will need to calculate how much cover you will need. 

For building insurance, you will need to calculate the cost of rebuilding your home in the event of a total disaster. Remember that this is not the same amount as you paid for the home, as this includes land value. Be careful not to underinsure, especially if you are buying in a high-risk bushfire or cyclone area. 

For your contents insurance, you will need to calculate the replacement cost of all your possessions. Make a list of everything, not just valuables. Articles like clothing, bedlinen, kitchen goods and even your CD and DVD collections can add up to a sizeable amount. If you own any items of significant value, most policies will allow you to insure these separately for an extra premium.  

How to save money on home insurance

There are several ways you can look at to save money on your home and contents insurance, including:

Bundling your home and contents insurance with other insurance you already have, such as car insurance, may lead to discounts

Look for online only discounts

Pay your premium on an annual rather than monthly basis

Set a high level of excess you are willing to pay upfront if you need to make a claim. The higher the excess level you agree to, the lower your insurance premium will be. 

So be prepared to have your home and contents insurance sorted before exchange of contracts and also check with your insurer if the insurance covers your contents during removal to your new home (this is usually the case if you are using professional removalists). 

Once you have moved into your new home, you can rest easy in the knowledge you are covered for any number of eventualities life could throw at you, but be sure to update your policy on an annual basis or if you make an expensive purchase that needs to be added to your contents cover. For more information regarding your first home purchase, please don’t hesitate to get in touch with a member of the friendly Century 21 team today.


0 comments | Posted by Administrator on 10/05/2017 at 3:30 PM | Categories:

10 Questions To Ask Before Hiring a Property Manager

You’ve bought your first investment property and you’re now a landlord. Congratulations! Your next essential step is to engage the services of a property manager. Many investors simply hand over the property management to the real estate agency that sold the property to them. This is not necessarily the right way to go. Your choice of property manager is crucial to your success as a property investor as he or she will be vetting and selecting your tenants, preparing the lease, handling the bond and rental monies, inspecting the property at regular intervals and organising any urgent repairs or maintenance. 

Your relationship with your property manager is essentially an ongoing business partnership, so don’t choose one on fees alone. You are looking for a top professional. 

Before selecting a property manager you can trust, here are some questions you should ask when visiting real estate agencies:

1. Do you have a dedicated property management department?

Many agencies concentrate on the more lucrative arena of sales and consider property management the “poor cousin”.  Ensure that the agency has a dedicated property management department staffed by trained experts.  

2. How many years have you worked in real estate?

Many people start out in real estate in admin roles then choose to move into property management as a career, rather than sales. With this question, you are seeking to learn more about the property manager’s experience and qualifications.

3. How long have you been with this agency?

You want a property manager with excellent local knowledge and stability, so they get to know you and your property, not someone who is likely to move on in six months. 

4. Will you inspect my property and provide a written proposal? 

A professional property manager will take a look at your property and present you with a written proposal presenting the recommended rental pricing and outlining their services, rather than simply phoning you to tell you the rental value of the property. 

5. How many properties do you manage currently?

Make sure the property manager is not handling so many properties that he or she will not be able to devote individual attention to your property. 

6. Would you go to court on my behalf if needed?

Tenancy laws have become increasingly complex. If for some reason, you need to go to the tenancy tribunal to protect your rights as a landlord you will need an expert and experienced property manager to appear on your behalf. 

7. What strategies do you use to attract the best tenants?

Your property manager should have a database of quality tenants looking for rental accommodation, consider the demographic most suited to your property, and market the property accordingly via internet advertising. 

8. How do you manage all the financial aspects?

Your property manager should be able to detail how and when rents are collected, when to expect your payments, the management fee and everything that is included in the fee. 

9. Will you keep me informed on movements in the local property market?

Your property manager should care about increasing your property’s return and inform you on any movements locally in rental returns or capital growth. 

10. How regularly will you inspect my property and check on the tenants?

Make sure your property manager intends to conduct routine inspections of your property as per legislation. Ask for details of what he or she will check on during the inspection and whether you will receive a written report. 

The right property manager will ensure your property is kept in top condition and that you will not have a high turnover of tenants. A professional, proactive property manager can partner with you to considerably increase the return from your investment property, so choose well. 

You will find that if you visit your local Century 21 real estate office and speak with the property management team you needn’t look any further. Our property management professionals will answer the above questions and any others you may have and soon convince you of their expertise and ability to take care of you, your tenants and your new investment property.


0 comments | Posted by Administrator on 04/05/2017 at 3:57 PM | Categories: