Questions to Ask a Seller’s Agent

Always remember that the agent is working towards the seller’s best interests. They want to achieve as high a price as possible.

You obviously want to get the lowest possible price.

The answers you get to these questions may give you some leverage when negotiating a price:

We’ll start with the basics:

Is the property rented?

How long is the lease?

What’s the weekly rent?

You may also be able to talk to the tenants about the property to find out if there’s anything wrong with it.

Also ask the real estate agent:

Is the vendor interested in offers before auction?

Have they received any offers yet?

What were those offers?

The more people putting in offers, the greater the chance of the seller achieving their asking price.

Finally, we come to the most important question:

Why is the vendor selling?

You want to know the motivation behind the sale.

Maybe they’ve had a change in life or financial circumstances that force the sale. 

Unfortunately, the seller’s agent knows why you’re asking this question, so they may not provide you with a straight answer.It’s worth a try!

Download our guide Know The Buying Process  to help you understand what you need to know and when you know what to do!

Biggest first-home buyer mistake: saving too long, mortgage expert claims

Saving a substantial deposit for a first home could be more costly in the long run than buying sooner with a smaller deposit, a leading mortgage broker claims.

Investors Choice Mortgages director Jane Slack-Smith said spending too long saving was a mistake considering new government benefits allowed first-time buyers to purchase smarter and faster.

“Building equity” was a better approach, the industry veteran said.

“A lot of young buyers have the wrong mentality when it comes to buying,” Ms Slack-Smith said. “They think they have to save a large deposit and perhaps wait until they have an established career or partner.

“In the majority of cases, a 28-year-old entering the market with a low deposit, backed by stable income, will be in a better position than a 35-year-old who waited to increase their deposit.”

This was because the growth in value of the property, if bought well and in the right location, would outpace most people’s capacity to save, she said.

Ms Slack-Smith said the government’s first home buyer deposit guarantee allowing buyers to access homes with only a five per cent deposit was an opportunity to save about $30,000 in lender’s mortgage insurance.

Drawing on state duty concessions could also help some buyers save about $30,000 in property taxes.

“This year is a golden era – a rare moment in time for them to get into the property market with less money than they have ever needed.”

Ms Slack-Smith this year launched a ‘Five-Step Financial Freedom Framework’ designed to educate first home buyers about investment strategies.

The principles were simple, she said. “Buy your first house – not a unit – strategically and as early as possible, taking advantage of all the ‘free’ money and (government) incentives,” Ms Slack-Smith said.

She added the first home should be well-positioned in an area primed for good growth, suggesting the buyers live in it for the required time frame required to access benefits.

Depending on the state, this could involve a live-in period of six-to-12 months.

They should “think of it as an investment property; not their forever home”, she said.

“Once they have that property secured, they can just park it and move on with their life. By the time they get to 40- or 50-years-old they’ve had a property that’s been growing not for five or 10 years, but 20 or 30 years.”

Melbourne residents Carolina Pena, 28, and Christian Arevalo, 31, said they planned to buy quickly rather than wait to stockpile a large deposit.

They currently live a Hawthorne East but will use a five per cent deposit to buy in outer Melbourne using “an investor’s mindset”.

“At the beginning, looking at property was a faraway idea and we thought we would need to save $50,000 or more,” Ms Pena said.

“We have realised now is a really good opportunity with the grants and stamp duty concessions … all of a sudden getting into our first property is a lot more possible.”

The couple plan to live in their first home briefly before turning it into an investment property and moving to another home.

By taking advantage of first home buyer benefits they will only need $30,000 upfront, Ms Pena said.

“It puts us in a very strong position,” she said. “Our first home is not out of reach anymore – (it’s) too good a situation for us to pass up.”

Make a time with one of our experts for more information about FHLDS https://investorschoice.com.au/bookacall

Via Real Estate

Renovation Tips

Your most basic goal is to get back every dollar you spend on renovations. So if you spend $20,000, you need to see a value increase of at least $20,000. Ideally, you want to see at least $2 of added value for every dollar you spend.

Simple renovations, such as reroofing and fixing cracks in the wall probably won’t add that value.

Bigger renovations, like kitchen and bathroom remodels, to create value.

As a first-time buyer:

Aim to spend no more than 8% to 10% of the property’s value on a cosmetic renovation. The 8% is usually enough, but going up to 10% gives you a buffer if something goes wrong.

Your goal with that money is to add to the property’s value by at least 15%.

That means you’re getting $2.50 in value for every dollar you spend on the renovation.

To hit those figures, you’re going to need to crunch the numbers. 

Plan out milestones for even the smallest of renovations. 

Plan well ahead of time to avoid the project going off the rails. 

If you plan ahead, there’s a chance you’ll be able to access discounts on materials. 

You give yourself more time to find better deals. The awesome thing about renovating your own home is that you don’t need to have the entire reno budget up front you just do what you can when you can after all you have 6-12 months to get it done before you move out, and it will help you rent the property sooner and get more rent. Winner winner chicken dinner

Download a copy of Renovation Tips & Tricks guide to learn more what you need to consider room by room

A Quick Cost Analysis

Part of sourcing your property involves running a cost analysis. You have to look at the improvements the property needs versus the potential profit you can generate from it.

There are 3 steps you need to take to do this:

Step #1

Discover the median price of equivalent properties in the area. Visit as many of these properties as possible then visit the fully renovated properties to find out about any improvements the owners have made.

Step #2

Run the figures on the property you want to buy. Can you make those upgrades while still coming in under budget?
You have to factor in a time cost and if your renovation is extensive enough to need council approval.

Step #3

The cost of the improvements aren’t the only costs to consider. You also have to add your buying and holding costs into the equation.

As mentioned above, needing council approval can add time to the renovation. That means your holding costs go up, however as your first home – this cost is offset as you are living there and saving on rent elsewhere!

Remember only if the numbers still make sense, the property has the potential to turn a profit.

Download our guide Know The Buying Process  to help you understand what you need to know and when you know what to do!

Suburb Selection

Buying an investment property involves a different mindset than buying a home.

When choosing a suburb, you need to look at these 4 factors:

Factor #1 – Future Growth

You may not be able to predict the future, but you can look at certain indicators to get an idea.

Pricing pressure from suburbs closer to the CBD, income and population growth to name just a few

Factor #2 – Demographics

Knowing what your tenant (and future buyer) wants is vital.

That is why buying the ‘typical’ property for the suburb is crucial.

Factor #3 – Suburb Gentrification

This is a change of fortune for the suburb.

This may mean a change in the people who live there.

Increasing incomes, even the odd organic store popping up.

There are signs that you can watch for.

Factor #4 – Supply and Demand

How does supply and demand factor into your suburb choice?

As an investor you want renters, so making sure there is a healthy demand for the ‘typical’ property but not an oversupply will keep your property from being vacant.

Make a time to talk to one of our experts to find out just how far away you are to setting up your future now https://investorschoice.com.au/bookacall