Viewing by month: October 2014

Essential advice for negotiating success

Real estate agents understand better than most that the act of negotiating is inherently risky and rife with difficulty. Everyday agents act as the communicator between buyers and sellers who lay their chips down on the bargaining table, and often parties have inflexible briefs and/or budgets, rendering it challenging at times to strike a satisfying balance. While acting too passively may fail to achieve a particular price, pushing too hard can just as easily stifle the process.

The below points may assist next time you find yourself negotiating:

Do your homework: There is no substitute for preparation and organisation. Conducting research into the issues, people and context which form the overall negotiating situation will provide you with the best possible information advantage from which to begin facing your opponent. For example when negotiating with a seller, it may be helpful to research the properties they’ve sold in the past, the price at which they’ve been sold and the time spent on the market. In this way you’ll better understand if you’re up against someone adept at moving their property quickly, and adapt your strategy accordingly, or if it is someone who will be more willing to compromise in your favour.

Start high: Beginning a negotiating process from a position of strength can provide plenty of rudders on the ladder for opposing parties to move between. When acting for a buyer this will obviously mean suggesting a lower price than what they may eventually be willing to buy for, and so it may be helpful to build a common understanding about what this price might be prior to entering the negotiating table by discussing their final budget and conditions. As an example, they may have sold their house prior to buying and are therefore under a strict six-week settlement yet have reasonable purchasing power.

Understand the process: Negotiation is a progressive practice and it is more than likely that you won’t achieve the desired result using the same negotiating tactic every time. Compromises may have to be made, and as an agent it’s important to know when to forgo unlikely terms and when to settle. For instance, if you ‘ve played boomerang with a potential buyer for some time and have finally secured a decent sale price on the condition of a longer settlement, it would be ideal to underline to your seller that this is a ‘win, win’ situation and a good deal, considering the circumstances.


0 comments | Posted by Reality Bytes - Real Estate Training Blog on 29/10/2014 at 12:00 AM | Categories:

4 ways to reduce the risk of investing in property

 

Whether you're buying new or old properties, cash flow or growth, there are ways to further reduce your risk of investing. 

 

#1. Get an independent valuation

This is the best tip for buying any property, anywhere in the world. Whilst a $50 online valuation might give you an idea, a full $500-600 valuation, complete with comprehensive property inspection, will almost guarantee you don't overpay. You can also seek independent valuations for properties that have been built. In this case the architecture and building plans are reviewed with corresponding suburb data.

 

#2. Get a building inspection

If you're not in the building trade you need to get a full building inspection for every property before you buy. Just because it's a unit and the maintenance is paid by strata you still need to get one done as you'll share that cost. You may discover expensive concrete cancer that they weren't yet aware of.

 

#3. Conduct a strata inspection

There are many old buildings that have $50k-100k special levies per unit allocated to repair common areas, such as the external building and doors and windows. If you stretch yourself to take up the investment, these costs could make or break your budget given lenders often don't lend for this kind of building work until completed.

 

#4. Choose property managers wisely

A quick over the phone survey of property managers can quickly arm you with the knowledge of what is in demand from tenants and the rents they are willing to pay. Be sure to ring managers that aren't connected to the sales agent of the property you are trying to buy. This knowledge can greatly help you plan income and expenditures if you need to make additions to renovations to assist your asset to perform.


0 comments | Posted by Reality Bytes - Real Estate Training Blog on 28/10/2014 at 10:44 AM | Categories:

5 things you MUST know before buying a property to renovate

As many property investors have discovered, a bad renovation can cost you a fortune. Cherie Barber gives her tips on how to spot the diamonds from the duds.

#1. I know the approximate price of what things cost to fix - and that is a major advantage. It means I'm not fazed by problems that might scare other buyers off, like concrete cancer or a total rewire job, because I can estimate the cost of repair and factor that in. Having a good idea of costs means I can do a rough crunch of the numbers as I'm walking through a property and know by the end whether there's profit potential in renovating it.

 

#2. I know the big no-nos I would never consider: buying on a main road or beside a railway line, or a house that sits below street level these are what I call 'major buyer objections' and there are a heap of them. No renovation will ever fix them. Move on.

 

#3. I look at whether there is sufficient scope for improvement. If you can't substantially improve a property and uplift its value, whether through a cosmetic facelift or significant structural changes, then it's not worth bothering with. Older properties offer the best pickings for structurals, as there's obviously more work to be done. Whereas cosmetic renos are well suited to properties of a certain age and style. And you want to be familiar with what type of renovation works for the particular style of property you're looking at, whether it's a timber cottage, federation terrace or brick semi.

 

#4. I will have done my due diligence on property prices in that suburb, so I know what price I need to get that property for to make a decent return on investment, once I've factored in all my other project costs, and the price of the renovation. If the price isn't right, I walk away. There's no better way to erode your profit than pay too much for a property to start with.

 

#5. I've confined most of my property purchases to a couple of Sydney suburbs, so I've become a real estate expert in those areas. I know the best and worst streets, where heritage restrictions apply, where high and low price pockets are and what style of home buyers want in my suburbs. An intimate understanding of your local suburbs is key.

 


0 comments | Posted by Reality Bytes - Real Estate Training Blog on 20/10/2014 at 4:29 PM | Categories:

7 ways to make a small bedroom look bigger

 

If you're living in a share house, a one-bedroom flat or an urban area you probably inhabit a bedroom that's little more than a glorified cupboard.

If not, you've hit the bedroom jackpot and you should probably live there forever.

If you're not blessed with a decent sized bedroom, we've got a few tricks that will help make your shoebox bedroom feel like a spacious sanctuary.

 

1. WALL MOUNT LIKE A CRAZY PERSON

 

The biggest mistake you can make in a tiny bedroom is to waste floor or surface space on items that can be wall mounted.

Lights, lamps, shelving, hooks and racks can all be mounted to the walls and this will keep your limited floor space clear for essentials like a bed and bedside table.

Lights, lamps, shelving, hooks and racks can all be mounted to the walls.

 

2. USE MIRRORS

 

No matter how many times you rearrange the furniture it's never going to increase the floor space.

Once you've decided on your furniture arrangement, you need to accent with mirrors. They create a wonderful illusion of space, tricking the eye into thinking that the room is far more spacious than it actually is.

A neat little trick is to place mirrors facing each other on opposite walls. It creates a window-like effect and adds a sneaky optical illusion of space in the room.

 

3. DRAW YOUR FOCUS UPWARDS

 

Buy or build shelving and cupboards that span from floor to ceiling. They'll create a long vertical line which gives the illusion of space. You'll also have the added bonus of ample storage with a full length cupboard or shelf.

 

4. CHOOSE LIGHTER COLOURS

 

Dark colours can be beautiful and luxurious when you have the space for them, but in a small room they can be oppressive and enclosing.

Choose lighter colours like white, creams and dove greys when it comes to decorating and be sensible about your use of colour. An acid yellow bed spread will look fantastic in a large, spacious loft but in a tiny bedroom you might find the colour a bit aggressive.

 

5. GET YOUR SCALE RIGHT

 

It's sensible to choose the largest bed you can fit within the space but then if you put a teeny tiny bedside table next to it, it's going to look silly. By all means choose smaller, more streamlined furniture to fit in your small bedroom, just make sure that they all fit together in terms of scale.

 

6. REMOVE ALL CLUTTER

 

Don't have anything unnecessary in your bedroom. If you can get by with just a bed and a bedside table, that's ideal.

This is obviously difficult if you live in a share house but try to minimise the amount of items you store in your bedroom. You should avoid keeping things like computers, excess furniture, washing baskets, bookshelves and ironing boards in your bedroom if you can help it.

Keep your bedroom simple and neat to avoid making it look like an oversized storage cupboard.

 

7. NEVER BLOCK A WALKWAY

 

It can be tempting to move furniture into 'free' space like doorways and walkways but it's never a good idea. If you have to turn sideways to slide past your bed every time you leave the room, it's not an ideal arrangement of your furniture.

You need make sure your bedroom is comfortable and functional and blocking off walkways is not the way to do that.


0 comments | Posted by Reality Bytes - Real Estate Training Blog on 15/10/2014 at 10:02 AM | Categories:

5 ways to get your property valuation through the roof

Of course you want a high valuation for your property. But how can you get your valuer to give you the best appraisal?

 

Here are five insider tips proven to impress your valuer and lift the value of your property.

 

1. Focus on good presentation

First impressions count so when a valuer is approaching your property from the road, if your property presents well - ie: is neat and tidy, has mown lawns and a well maintained faade - then the first impression is going to be positive.

 

This instantly means the valuer isn't going to walk into the property expecting to see it poorly maintained; instead they will walk in with a positive mindset.

 

The external appearance of a house is crucial to this impression. If there is paint peeling, rusted balustrades/handrails to the patio, overgrown fences, and unmown lawns then this will not only impact on the valuer's impression, it will also increase the percentage of depreciation the valuer will assign to the improvements of the property.

 

2. Consider installing branded items for fixtures to your property

By fixtures we are referring to air conditioning units, appliances, tapware, and the like.

During their inspection, a valuer will take note of the improvements of a property. If they see well-known brands as opposed to not so well known brands, they are going to have an instant impression of quality versus a cheap finish.

 

The overall cost may not be too different but quality brands reflect well, not only for the valuer but for a potential future purchaser.

 

3. Try to create larger rooms

People often say to me that a 4-bedroom home is always going to achieve a higher valuation than a 3-bedroom home. In reality, this may not be the case.

 

If you were to have a 3-bedroom home where all bedrooms were 9sqm or above, or you had a 4 bedroom home where all bedrooms are 2.5 x 2.5m, then the valuation is likely to be similar or slightly higher for the 3 bedroom property over the property with 4 bedrooms.

 

Open plan is one of the most recent trends in property and has been that way for a number of years. Small pokey rooms are no longer in demand so if there is potential to renovate your home to create open plan living areas or larger bedrooms, then this can improve the value of your property.

 

4. Add or extend an outdoor area

With a unit this is quite difficult due to body corporate/strata requirements. However, if you are able to renovate internally in a way that allows the living area to flow to the balcony/patio, then this can be a big positive.

Adding a covered outdoor area to a house will certainly add value. Australia's climate lends itself to the outdoors and Australians take pride in entertaining on the deck or the patio, so this will add value to your property.

 

But it is important to ensure the outdoor area is accessible from the living space. If you have to walk through a laundry or around the back of the house to get access to the area, this will not feel like an extension of your living space and could actually deter future purchasers.

 

5. Install a second bathroom

Bathrooms are extremely important for the ability to increase rental returns, but families are looking for properties with 2 bathrooms rather than just 1. If you can buy a property and build a second bathroom, this will improve the value of the property significantly. In some areas of Queensland, we have seen a second bathroom add as much as $50,000 difference to the value of a home.

 

If you are buying a property and want to improve the value, it is a good idea to look for properties that haven't got the above features and then renovate using these tips to add value.


0 comments | Posted by Reality Bytes - Real Estate Training Blog on 08/10/2014 at 10:03 AM | Categories: