Top tips for negotiating a sale

Haggling over prices and knowing what to pay can be daunting for start-out property investors, but armed with the right information you can negotiate yourself a great price.


#1. Sticking to a budget

One of the most important aspects of negotiating is knowing what you have to spend. By having strict rules as to what you can afford it will stop you overspending and blowing out your investments plans, especially if you are looking for positively geared properties. If you overspend, either by getting caught up in the drama of auction day, or being intent on competing with another buying, you may get the property, but find out you cannot afford the payments.


#2. Knowing the value of a property

Researching the market value of an area is vitally important and should be done, in depth, before making an offer. Your research should include the property's sale history - which can be found online, how much comparable properties are selling for in the area and a history of recent sales in the area.


#3. Know the property inside out

By having a solid knowledge of the property you are in a better position to negotiate. While you don't want too many faults, knowing what problems do exist will help you negotiate a better deal.

Knowing the history of a property will also help. The best way to do this is by asking a lot of questions. Has it been passed in at auction, what was its valuation when the vendors bought it, how many offers have been made, how many people have inspected it, has the price been reduced and so on.


#4. Do due diligence

Have all the relevant inspections completed, especially building and pest. This way you know you are negotiating for a solid dwelling that is unlikely to fall apart around your ears in years to come.


#5. Don't be in a rush - and don't get emotional

Doing anything in a rush is bad idea. No matter how great a deal seems, don't rush in without doing due diligence. Always ask yourself, could there be a reason the deal seems so good?


It is also important not to get emotionally attached to a property. You can love it after you buy it, but getting attached pre-sale can mean overspending and rushing in. Remember that investing should be done by numbers, not by heart.

0 comments | Posted by Reality Bytes - Real Estate Training Blog on 03/11/2014 at 12:04 PM | Categories:

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.




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.




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.




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.




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.




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.




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.




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:

The 3 successful ways to manufacture equity

There are ways to boost capital growth even when the market is stagnant. These are 3 successful ways to manufacture equity:


- Renovate

- Subdivide

- Develop


For each of these strategies there are some key principles the investor needs to keep in the forefront of their mind that makes each particular strategy worthwhile.




A renovation may for example, involve bringing a tired old property up to scratch with a modern kitchen, a new bathroom and a fresh coat of paint.


Renovations work through the concept of synergy. That is, the whole is greater than the sum of the parts. If an old property has many eye-sores, the perceived value of the property may be lower in the minds of potential buyers than the sum of the costs to restore it.

Everywhere the potential buyer looks, there is a problem. This becomes overwhelming if the buyer is not able to break down the list of rectifications and cost them.


Contrastingly, once renovated, the perceived value of a property may be greater than the sum of the money spent to improve it. This time, everywhere a potential buyer looks there might be some 'wow factor'.


It's important to understand this concept of synergy when searching for a renovation project. If the investor's thinking is that renovation profits come from doing it yourself, then all they end up doing is exchanging their time for money. It's the same as getting a part time job for the weekend. The serious profits are in using synergy to your advantage.




A subdivision might involve splitting a 1000 square metre block into two 500 square metre blocks for example. Each new block can now have a house built on it. The value of the two new blocks together may be worth more than the original single block alone.

Subdivisions are another play on misunderstandings of perceived value much like with renovations. Home buyers may not see much extra value in a property that has extra space. A bigger back yard does mean extra space for the kids but there is more to mow too. The value a home owner places on an extra 200 square metres may only amount to $50,000. But to an investor planning to subdivide it may be worth an extra $100,000.


Every additional 100 square metres of space is almost a waste to the home buyer once it exceeds their minimum. This perceived devaluing of large blocks works to the investor's advantage so the investor can acquire these blocks cheaply.


After the subdivision, the perceived value again works to the investor's advantage. The lack of space is still a negative to the home buyer, but it's not a deal-breaker if they can still build a decent sized home.


Note that a block that is exactly twice the size of other blocks in the street will have the perceived value of being exactly double the price. Similarly, a block that is exactly half the size will be perceived as being exactly half the value. Home buyers can do simple maths, but they may struggle with abnormal or non-even multiples of block sizes.


The key to a successful subdivision, like a successful renovation, will come down to recognising poorly perceived values amongst home buyers for both the purchase price and the post-project price.




A simple development might involve knocking down a house and building a duplex. Or it may involve buying a block of land and building 3 townhouses on it.


The principle behind a profitable development project lies in finding under-utilised land. The land may have a house on it but the council planning laws and market would accommodate a block of apartments for example.


The investor may be able to find a property that has excellent development potential that the current owner is un-aware of. However, this case is unlikely since their selling agent will more than likely know of the potential.

The major reason why a seller will not develop themselves is due to lack of funds, lack of experience, lack of time or lack of interest - probably not due to a lack of awareness. This may alter the key principle of a successful development from recognising under-utilised land to instead simply having the experience, funds or determination.


Larger developments are therefore more likely to be more profitable since there will be less people able to fund them. It also means that there could be a direct relationship between success and experience.




Renovations are quick compared to developments. The skills required to complete a renovation successfully are also relatively easier to acquire than those for a small development. Renovations are a lower risk strategy but also have lower return. That means you may not be able to add as much value.


Renovations are generally cheaper than developments. A lick of paint and some new flooring may only cost $10,000. But even a one bedroom granny flat could cost many times that.

Developments require a considerable amount of dollars, experience and knowledge and have a higher risk. But they come along with higher returns. The value added via a development will usually exceed that of a renovation.


Developments are usually much longer projects. It not only takes longer to build, but just getting approval from council can take many months.



Subdivisions are usually a little more advanced than renovations in terms of expertise, risk and return. However, they are sometimes comparable with renovations in terms of time and cost. Some subdivisions can be comparable in complexity to small developments. In fact a council will probably want to know what you plan to build on the new blocks you're creating.

0 comments | Posted by Reality Bytes - Real Estate Training Blog on 29/09/2014 at 11:33 AM | Categories:

Why property really is the best investment

Forget shares and term deposits. Here are 10 reasons why you made the right call to invest in property.



Property offers more financial leverage, and the more leverage you have, the more quickly you can build wealth says Rocket Property Group founder, Ian Hosking Richards.


"For example, if I purchase a property for $400,000 I can put down a 10% deposit and borrow 90% from the bank.  If that property increases in value by 10% I have made $40,000, because I have only contributed 10% of the purchase price but I get 100% of the growth," he explains.


"So if it goes up in value by 10% in the first year I have effectively received a 100% return on my initial deposit.  And if the original deposit and other buying costs came from my existing equity, it means that I have borrowed the full cost and do not need to put any of my own cash in, but still get 100% of the growth.  I would aim to purchase a property that has great potential for growth and pays for itself even on high borrowings, so for me it is hard to imagine any other investment that is more attractive."



The amount of paperwork you need to produce and information you need to assimilate can be daunting at first, but the investment process in itself is remarkably simple.  There are no complicated steps you need to take. As long as you've got your finances sorted out, you can start doing your research to find the right property. If you apply thorough due diligence in terms of getting inspection and valuation, there's little risk for you to overpay or buy a dud property.



Unlike other investments classes, property offers you with many options in terms of growing the value and income on your property. You can also control where you buy, how you buy and when to sell.



Real estate is less volatile than stocks or mutual funds, especially in uncertain economic times. The continuing demand for housing fuelled by strong population growth ensures property prices are supported in general.

It's also worth noting that the price drops most people fear are NOT real losses until you actually sell the property. If the property was purchased correctly and generates a healthy cash flow, the investment can be sustained until the price gets back up again.



Unlike the share markets where there are complicated terminologies you need to get your head around, real estate is relatively simple. You know what a house, unit or a townhouse is and you don't need a 60-page prospectus to tell you all about it.



You can claim a range of tax deductible expenses through your investment property, which will help reduce your tax bills and improve your cash flow. A good accountant can help you cut your tax expenses by the tens of thousands of dollars, legally through your investment property.



Another advantage to property investing is that tenants are paying down your mortgage while you sit and watch your investment grow in value.



Property is undoubtedly more predictable than other investment-classes.  With well-chosen property, you can look out to 18 or 24 months into the future and know which direction the market pressures will be pushing, unlike the share markets where anything could change within seconds.



Property with strong cash flow can ride uncertain times such as during a recession for simple reason that it meets a basic need- housing. People will always need a place to live, even during difficult times. They would do everything just to have roof over their heads. They are prepared to forgo other luxuries just to have enough money to pay for their rents or mortgage.



Real estate makes more billionaires than any other asset classes. In the recent Forbes Billionaire's List, it reported that a total of 135 property tycoons now make up the world's wealthiest list with 14 property billionaires joining the ranks this year alone, boosted by surging property values around the world.

0 comments | Posted by Reality Bytes - Real Estate Training Blog on 12/09/2014 at 3:33 PM | Categories:

The 15 minute break miracle

Real estate agents are typically required to concentrate on several different tasks at a time, constantly juggling the needs of different clients, colleagues and enquiries about new business. At times such as these, it’s understandable that the last thing any busy individual would be interested in halting their momentum by taking a break – even if it could increase their productivity.

Recent studies have pointed to the benefits of planned, sporadic breaks as throughout the day our brains inevitably tire, and although we might not be yawning or showing obvious symptoms, individuals certainly becomes more susceptible to distractions over the course of the work day.

This has been proven through usage data from Facebook that shows usage building from 9am-12pm and then peaking at 3pm, when most individuals start to feel increasingly fatigued. By scheduling a break in at times like this, it’s possible to refresh (and refocus) without being drawn into time wasting activities that can seriously hamper your productivity.

It’s best to keep this short break as active as possible, stepping away from the computer for a coffee with a colleague, or heading for a brisk walk around the block. Short breaks also serve as a useful opportunity to allow the mind to wander, allowing your brain to rest and refresh, giving your work renewed focus when you return to your desk.

Try taking a short break this afternoon and you may be surprised at the results.

0 comments | Posted by Reality Bytes - Real Estate Training Blog on 01/09/2014 at 12:00 AM | Categories:

Avoiding spring burnout

With the spring selling season approaching, it’s a good opportunity to take a moment to make sure you’re performing as efficiently as possible, in order to achieve the best results possible at this busy time of year. Below are three tips which may assist with sharpening up your time management skills to help you perform this spring.

Plan the day before: it can be a good idea to take 10 minutes every evening to enter scheduled meetings and outstanding tasks into your tablet, smart phone or diary. By doing this, when you arrive at the office the following morning you have a clear plan for your day, with time allocated for important meetings, tasks and phone calls. While it may be useful to make the most of your time in this manner, it could also be useful to leave gaps in your day for the unexpected, as these free time blocks allow you to pop out for a coffee with an associate or catch up after an appointment that runs late.

Prioritise your tasks: inevitably, there are some tasks that are mundane but unavoidable, and to avoid any procrastination pitfalls it can be a good idea to knock these responsibilities off early in the day. It can also be wise to focus on income-producing activities such as developing new business early in the day while you’re fresh. Prioritising tasks can also help alleviate stress by assisting to work through tasks in a logical fashion.

Be an early bird: a brief early morning exercise session and early arrival at the office can be a great way to start the day, especially as an early start may help you to efficiently despatch of urgent tasks with minimal interruption. Due to this, regardless of your regular morning routine, it may be useful to arrive early in the office during these busy periods to ensure you get the most out of every day.

0 comments | Posted by Reality Bytes - Real Estate Training Blog on 22/07/2014 at 12:00 AM | Categories: