Archive for category: Investing

Important Tips When Buying Your First Home

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You are investing hundreds of thousands of dollars when you purchase a house. When it is your first time, the task seemed especially daunting. It’s tempting to just purchase the first house you see that you like. As a first-time home buyer there are a lot of things for you to consider in order to minimise your investment risk. You need to know what the requirements are for first-home buyers and what to expect during the buying process.

Here are some things first home buyers need to know to prepare them mentally, emotionally and financially for the buying process:

Important factors to consider

These are the things you need to consider when purchasing your first home to ensure that you are making the right decisions.

Lifestyle – Ask yourself these questions to help you find the home that best fits you. How do you live day to day? What are your future plans? Are you going to upsize or downsize in a few years? Do you want your home  to be located close to amenities and services? How far from schools or shops are you willing to live?

Financial situation – Calculate the total amount of your repayments and related costs before taking the plunge. Save as much as you can for your deposit to reduce your monthly mortgage payments as much as possible. When calculating how much to borrow, estimate your current expenses, potential mortgage repayments and related costs such as water and council rates, and determine if your income can fully cover all these expenses.

Moderate your expectations – Getting into the property market is already an accomplishment, so don’t be frustrated or discouraged if the house you’ve been dreaming about is out of your reach. You would probably be one of those many people who purchase not just one house in their lifetime.

Do your research – Find out important facts about the property such as how much it was sold earlier, what changes had been made to it, what type of zoning it is covered by, etc. Check from the council whether there are major developments planned for the surrounding areas that could affect the value of your property. It also doesn’t hurt to be updated on the local news affecting the area where your property is located.

Grants available to Australian first-home buyers

There are several financial assistance products available when you purchase your first home.

First home buyers grant – Eligible first home buyers can avail of a grant when they buy or build their new home that will be used as their primary place of resident.

REBA $2,000 home buyers assistance – Eligible home buyers are entitled to a grant of up to $2,000 for the related costs of buying their first home, whether established or partially built, made through a certified real estate agent. The highest purchase price requirement for the Home Buyers Assistance Account (HBAA) is $400,000.

First home super savers (FHSS) scheme – With the closing of the First Home Save Accounts, the Federal Government launched FHS, which allows first home buyers to save for their deposit within their super fund.

Stamp duty concessions – Stamp duty is part of what you pay when buying residential property. Those who are eligible for the First Home Owner Grant can also claim a concessional rate of transfer duty if the dutiable value of the residential property and land is up to $530,000 or $400,000 for empty land.

Steps for Purchasing a Home

You have to know what to expect from the home buying process if you have decided to go ahead with it. Preparation is the key to avoiding hassles, stresses and delays that might derail the entire transaction. Here are the basic steps you can expect from the buying process:

Find a home – There are many ways for you to find what properties are for sale, including listings from real estate agents, online listings, and even driving to areas where you desire to live. Friends, family and corporate connections can also let you know if a property that may interest you goes up for sale.

Secure financing – But not before checking what type of home loans as well as first home buyer grants are available to you. Do your research and shop around because because your mortgage interest rate will heavily impact the final amount you will pay for your home.

Make an offer – Your offer will be presented to the seller’s agent by your real estate agent, who will also help you come up with the amount of the offer. Once your offer is accepted, the legal process of buying property has now started, including providing a good-faith deposit and the shift into escrow.   

Get a home inspection – Have an experienced professional inspect the property you are buying even if it appears perfect. Knowing the overall condition of the property helps you in the negotiation process and gives you a sense of security knowing you’d be making the right decision for your prospective investment.

Finalise transaction or move on – It’s time to close the deal if all went well with the seller, or if the inspection didn’t find any major problem in the property. If it is the opposite, then move on to another better-suited property for you.

Things are not quite over even after you have closed the deal and you have moved all your belongings to your new place.

It is important to learn the buying process beforehand to lessen the stress as you’re going through with it and to help you get that dream house at a price that you can afford.

Rental Applications Being Knocked Back? Check This Out

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Finding a suitable rental property to make it your home is difficult enough without the added stress of the application process. Getting it right means being able to put your feet under the dining room table in a place you know is yours for the term of the rental, while getting it wrong means starting the search all over again.

Get the Process Right in a Competitive Rental Market

If you are struggling to have your application considered, especially when there are several people applying for the same property, it is time to take a closer look at your approach. The rental market is very competitive. So, just like the job market, you need to have everything covered to give yourself the best chance.

To help you master the process, we have a few suggestions that may help. Here at Bunbury Real Estate, we have an application process that is typical for the rental industry. We are property managers with rental choices to suit a wide range of lifestyles and budgets.

Take the Time to Get Your Documentation Right

Having all the required documentation available for us is one of the most important things to get right. Applicants who have everything we have asked for are the easiest to process, and it is even better if you go the extra mile and have everything copied and presented in a folder for us to start your tenant file. This also applies to any housemates who will be sharing the property.

Punctuality and Good Manners are Remembered at Inspections

We often open rental properties at specific times to allow prospective tenants to view them. This is very time consuming for us, so we remember tenants who arrive on time. Punctuality is a courtesy in every industry and ours is no exception, as are visitors who are pleasant. The initial inspection, before even being accepted as a tenant, is not the right time to demand repairs or changes.

Dress to Impress

You may be surprised at our next suggestion, but again, just like a job interview, it helps to dress the part. We don’t expect people to dress in formal wear to view a rental property but looking dirty and dishevelled does not leave a good impression. When you show up neat and tidy, we know you are treating the application process seriously.

Follow Up Contact Indicates Genuine Interest

Finally, if you have put in an application and not heard anything after a couple of days, there is no harm in contacting the rental agent and offering to supply extra documents or references to indicate your interest. If they are tossing up between your application and another candidate, receiving a courteous contact from you could just be the thing that makes up their minds.

How Much Do You Know About Tenancy Laws?

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More people than ever these days are living in rental properties, so tenants need to understand their rights and responsibilities. The Residential Tenancies Act is the legislation governing tenancies, but the issues most often reported are ending a lease before the time is up, who pays for maintenance and repairs, getting behind in the rent, tenants’ right to privacy and getting the bond back when the tenancy is over.

Reputable Property Managers do the Right Thing

If you are a first-time tenant looking to rent a property, using a reputable agency like Bunbury Real Estate is your best chance for a hassle-free tenancy. As property managers, we observe all laws, from the day you lodge your application to the end of your tenancy. Many tenant problems arise when the property is rented directly from lessors, who may have their own interpretation of the law.

Breaking a Lease

Sometimes tenants find themselves in situations where they need to leave their rental property before the lease is up. If you have signed a fixed term lease, you could be liable for compensation to the lessor if you break the lease. There are processes to be followed so get advice from a property management agency like ours before you act.

Who Pays for Repairs?

A rental property should be in a reasonable state of cleanliness and repair before you move in. The tenant is responsible for keeping it clean and advising the lessor if any damage occurs. If intentional or negligent damage is caused by you or a guest, you are liable for the cost of repairs. However, you are not responsible for repairing the normal deterioration that takes place in any property.

Getting Behind in the Rent

Sometimes, even the best tenants get behind in the rent through unemployment or other circumstances. You must notify the lessor immediately to avoid your lease being terminated. However, the lessor cannot just evict you without following some legal processes. You may be able to negotiate a payment plan to bring your rent back on track.

Tenants Have Privacy Rights

As a tenant, you have the right to privacy, so the lessor cannot drop in unexpectedly to check the property. The correct notice period must be given to the tenant and this includes instances where tradespeople need to do work, and if the property is being showed to prospective buyers.

Getting Your Bond Back

For tenants who leave the property in good condition, getting their bond back is a major concern, especially if the lessor tries to claim it without sufficient reason. Be assured that the bond money can only be disposed of by consent or court order, all of which involve legal processes.

For peace of mind, select your rental property through an agency such as ours, and leave all the legal issues to us.

How to Get the Best Value From Your First Rental Property

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Are you thinking seriously about buying your first investment property, or have you just purchased one and you are in that first flush of excitement? Residential property is still one of the most popular methods of building wealth in Australia. However, there are a few things you should be aware of to avoid making the most common landlord mistakes.

An Investment Property is not a Hobby

At first, many investors think of their property as a hobby or a side-bet against possible future insecurity. From day one, you must look at this property as a business. Take it seriously and access the right resources to support the large sum of money you have committed if you want the property to achieve its full potential.

Keep it Maintained

The next mistake, and a frequent one, is to skimp on repairs and maintenance. New landlords often try to build early cash flow by not replacing things like worn floor or window coverings, leaking taps or shabby bathrooms. Good tenants will pay a higher rental for a comfortable living environment, and maintenance increases the value of the asset.

Personal Relationships with Tenants

This can be a tricky one, especially if you intend letting to a relative or friend. If your relationship is a close one, your tenant may take advantage of it by falling into arrears with their rent, or objecting to a legitimate rent increase. Remember the earlier advice that an investment property is just like a business and you need to treat it as such.

Delegate Property Management to Professionals

There is a way to keep the tenants you know personally at arm’s length and that is to engage a property management agency. Looking after an investment property requires knowledge of tenancy laws and the ability to select quality tenants. Do-it-yourself landlords have high vacancy rates because they don’t have the professional systems in place to manage their properties effectively.
This is something we see first-hand all the time. Bunbury Real Estate employs experienced property managers who understand the tenancy legislation and know the local rental market. We have systems in place to reference check prospective tenants, advertise our rental properties to the widest possible market and do regular inspections. Our management fees are also tax deductible.

If You Don’t Have an Accountant, Get One!

Now that we have mentioned tax, you will get the best value out of your investment if you get a good accountant, preferably one who knows property. Accountants know the legitimate tax deductions applicable to investment properties, as well as the intricacies of negative gearing and depreciation.
Follow these few guidelines and you will enjoy owning an investment property so much that you will soon be buying another one.

Housing Market Recovery Attracts Buyers

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As we are now halfway through 2017, the real estate picture in Western Australia is becoming much clearer. The experts are touting this as a transition year for the state, with most of the past reductions in housing prices now behind us. From an overall point of view, investors priced out of the market in the eastern states are looking here for opportunities. At the same time, local buyers are returning as confidence in the general economy also returns.

Low Prices Will Not Be Around Forever

If you have been sitting back looking at the market and wondering if you should step in or stay out, those who know the market well are advising to buy now, as prices will not stay at these levels for much longer. Whether you are a looking for a home to live in or for an investment property, the advice is to look for areas close to schools, transport, shopping and employment to get the best value for money.

Take Advantage of Incentives – They Won’t Be Around Forever

Prices are still low so housing is more affordable and interest rates remain at record lows. The First Home Owners Grant has been increased until the end of the year, and the income threshold for low deposit home loans has also increased, making it easier for first time buyers to enter the market.

Our Advice for First Home Buyers

This is all good news from our point of view as real estate agents. Here at Bunbury Real Estate we have done our best to assist our clients during the difficult times, and we are looking forward to doing the same in what we hope is a long-running, rising market. However, we do have some words of advice for new players, especially those looking for their first home to occupy.

While you are right to study the market in order to understand how it works, it is not the only thing you should be considering. If you were priced out of buying your dream home, but now it is within reach, there will be a certain amount of emotion involved in this search.

Be Clear About Why You Are Buying

Buying a home and buying an investment property are two different types of decisions. The investment property is a considered, calculated move to build wealth, while buying a home is putting down roots, establishing yourself in stable employment and perhaps preparing to start a family. It has a permanence about it that will most likely influence the type of property you are looking for.

Most people in the real estate industry believe that this is the right time to buy. With this opinion supported by market data, you should be asking, not about the market, but why are you buying? Once this is clear to you, we can help you find the right property for your needs.

Do Your Research to Get the Right Property

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If you are a potential new investor who is looking at property as part of your emerging investment portfolio, you are in good company, especially if residential property is your target. This type of investment has never lost its appeal, continuing to prosper through recessions, growth periods and changes of government.

The worst mistake you could make at this point is to think of buying property as a short-term prospect. Building wealth through property is a medium- to longer-term prospect and, if done wisely, it is usually successful.

PO box Rental Return or Capital Gain?

As a new investor, you need to make an informed decision, and the best way to do this is to ask yourself several key questions. “Am I looking for rental return or capital gain?” This should be your first question, as the answer will determine the type of property you purchase.

High rental return will help you meet the mortgage payments, but may not give you capital gain. Capital gain will give you the equity to buy your second property, but if the property has a low rental return, you will need to contribute to the mortgage payments from your own income. Get a rental appraisal for  an accurate picture of the property’s potential.

PO box How is the Local Market Performing?

This is a question we are often asked by people looking to buy in our area. At Bunbury Real Estate, we pride ourselves at having up to date information about developments that will have an impact on local housing prices. We know how unemployment in the area, for example, will affect tenants’ ability to pay their rent. We know if there are any major projects being considered for areas that will bring growth and job opportunities. These are the type of issues that people look at when thinking about investing in any area, and we can help by being on top of housing prices at our location.

PO box Is There Much Competition?

This is another question we can help to answer for the new investor. An area that is saturated with investment properties, either family homes or apartment dwellings, reduces the likelihood of good rental returns. A first-timer may do better in an area where there is high demand for rentals and a shortage of suitable housing. A local agency like ours can pinpoint this much more accurately than one that is operating, for example, from interstate.

PO box The More Questions, the Better the Outcome

There are many other questions that a first-time investor should be asking of their accountant and mortgage broker, but those about the properties themselves are best asked to the local real estate agency. We always have time to answer any questions so when we sell a property, the buyer is happy with the outcome.

Thinking of Buying Property? Make Sure You Have Your Reasons Clear

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Buying property is such a big financial commitment that most buyers think long and hard about the reasons for taking such a step. This is important because these reasons determine the borrowing strategy, the type of property they choose, and the location in which they purchase.

First-Home Buyer Trends

First-home buyers, for example, are usually on a limited budget and they are looking for a home or unit to occupy. If they are single and busy with work and social commitments, they are more likely to purchase a unit than a free-standing home. Usually they are not interested in spending their spare time tending gardens and doing maintenance.

Young Families Need Space

First-home buyers with a young family need more space and are more likely than the singles to opt for a three or four-bedroom home on a small block where children and pets have room to play. Of course, not every buyer is looking for their first home, so there are several other reasons for the ongoing popularity of real estate.

At Bunbury Real Estate, we see all kinds of people who are looking to buy property here for all kinds of reasons. Our professional sales team listens to their clients and are skilled at assessing their needs. We will not waste their time taking them to inspect properties that have none of the features they are looking for.

Second and Third Homes – Space Chasers, Carers, Down-sizers

In the non-first-home buyer category, we deal with people with a range of needs. Clients may want to owner-occupy their second or third house as their family grows. They may need space for an elderly family member who needs care, or for someone with a disability. We are seeing more older clients than ever who are down-sizing from the family home into a comfortable unit or apartment as they increase their social activities and retreat from the upkeep of a large property.

The Small Investor

We have not forgotten the investor in this review. Our region has many investment opportunities for sole investors, investment groups and SMSFs (self-managed superannuation funds). The residential property market is attractive to investors because of government tax incentives such as negative gearing, but it is not the only type of property to pique their interest.

The Tycoon

Experienced investors look at commercial and industrial properties that are showing a regular income from long-term tenants. They are usually more interested in steady cash flow over a longer timeframe than holding their investments for a short-term capital gain. Developers look for large parcels of land for subdivision, usually for housing, in long-term projects.

All Enquiries Welcome

The area at Bunbury serviced by our office has many opportunities for all types of purchasers and we welcome all enquiries and inspections.

How Sellers Can Botch the Outcome of Their Own Auction

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You have spent several weeks getting your property ready for auction. Every inch of it has been washed, cleaned, polished and renovated where needed. The fences are straight and true, paths and driveways swept, there are no weeds hiding in the garden beds and the lawn is immaculate.

Is Everything Really Under Control?

After putting in this effort, what could go wrong? Quite a lot, especially if you, the owner, interfere in the auction process itself. Most people don’t do this deliberately, but they can easily upset the process and make the job of the agent much harder than it needs to be.

As selling agents ourselves, we have seen otherwise promising auctions undermined by owners with just a few careless words or actions. Our agency, Bunbury Real Estate, works with sellers to get the best price for their property in the current market. We give our sellers accurate appraisals of the value of their properties, using the most up-to-date information.

A Well-Prepared Property with a Realistic Reserve Should Sell

This brings us to the first issue that can cause problems. While sellers should approach auction day with positive expectations, they must also be realistic. A well-prepared property backed by a professional marketing campaign and reasonable buyer interest could be expected to sell at an auction.

The pre-auction buying market will already have indicated a price point, and it is this figure that the seller should be considering when setting a reserve. Agents generally ask for feedback from inspections, including asking people what they think is a fair price for the property. We certainly do, and we take this information back to the sellers so they can consider the comments before deciding on their reserve price.

Keep Your Cards Close to Your Chest

We all like a chat between friends and family, but in this instance, the one piece of information sellers should not be disclosing is the price they want. Nothing spreads faster than a rumour, and the last thing we want is genuine buyers deciding not to attend the auction because they heard the price was too high.

No Sale at Auction? Stay Cool

What if the seller has done everything right and the auction was a dud? Maybe it was a football grand final day or the weather was terrible and kept the buyers away. We tell our clients to remain calm as often; the properties sell a couple of weeks later for a good price. It is just the next phase of the sales campaign.

It All Comes Down to Money

The top reason for a property not to sell is the price. Whether you choose an auction or sale by private treaty, the wise old saying still rings true for every commodity. An item is only worth what the market will pay for it, so follow your agent’s advice and spare yourself the anxiety.

Don’t Let Your Unoccupied Property Drain Your Finances

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If you have one or more investment properties, it is vital that you keep the vacancy rates as low as possible, given the locations and local market conditions. An unoccupied property is a drain on the financial resources of the owner, is more likely to be vandalised and becomes an insurance issue after a specified period.

Getting a Property Leased Quickly Needs Several Approaches

Finding quality tenants quickly in any kind of market is not something that can be achieved with only one strategy. It takes a concerted effort using several different approaches that, when combined, gives the owner the best possible chance of securing a long-term lease.

When we manage a property on behalf of a client, this is the approach we take. At Bunbury Real Estate we use current rental data to keep in touch with the local market and the latest marketing techniques to advertise our properties. We also keep our property owners up to date so their rental price expectations match the market conditions.

Use Accurate Data and Set Firm Targets

This means rental appraisals must be accurate. Data that is months old is not a true reflection of what is happening now. If, for example, the market is slowing down, we need to be advising our clients on current data, or they will be expecting a rental price that was achievable six months ago, but not now.

Getting a property occupied quickly also means setting targets and acting on them. The number of enquiries within the first couple of days the property is advertised is a reliable indicator of how much work will be required to get it leased. If there is little or no interest and we know the property is overpriced, we request a rent reduction from the owner. This usually brings in enough tenants for us to reference check and recommend.

Advertise Any Changes

This brings us to the next important change. There is little advantage in reducing the rent if we don’t advertise it. People who are watching the property but have not enquired may respond to this drop, so featuring it in our major advertising is critical.

Long Gaps Between Leases is a Cost

Our most important strategy is the relationship we have with the property owner. This includes giving good advice and finding reputable tenants. When an owner is reluctant to reduce the rental price, we remind them that every day the property is vacant is a cost to them. An extra $10 or $20 a week will be eaten up in costs if the property is not quickly leased.

If you are self-managing your investment property and losing money between leases, give us a call. We will use our knowledge to get your property leased quickly for the best price in any kind of market.

What Would Make You Sell Your House?

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For previous generations, buying a home was a once-in-a-lifetime event, and selling it a reluctant response to something that left no other choice. As the workforce became more mobile, and social changes redefined the family unit, the notion of a “forever” home was challenged. Home owners are now willing to sell their properties for a range of reasons as diverse as they are practical.

Moving up to Something Bigger

Up-sizing and downsizing are the opposite sides of the same coin, that is, the desire to have just the right amount of space for current needs. The typical home owner who sells a property to move to a bigger one will usually have a growing family who need their own bedrooms, or be caring for elderly parents or perhaps running an expanding home-based business.

Free up Cash by Downsizing

Downsizing is usually a lifestyle decision by older people whose families have grown up and left the family home. They no longer need the extra space or the work involved in keeping a large property clean and well-maintained. Selling up and buying something smaller also frees up much needed cash, which is useful in later life.

We have helped clients to both up-size and downsize, but these are not the only reasons people decide to sell their homes. Real estate is very much a people-centred industry, and here at Bunbury Real Estate experience has shown us that almost every decision to sell is driven by some change in personal circumstances.

Changes in Work Circumstances Trigger Sales

Work, for example, is a major part of our lives and very important to our financial and personal wellbeing. Many sales are a result of changes in work circumstances. We have worked with clients who needed to sell because they were moving interstate to a new job, which is always exciting. Sadly, we have also helped clients who needed to sell because they had lost their job and could not manage the mortgage repayments.

Relationships and Family

A change in relationship status that triggers a property settlement is another personal circumstance that will cause homeowners to sell. A separation or divorce is a common reason for contacting our agency to list a property. So, too, is the need to be closer to family during such a difficult time.

Not the Old Neighbourhood?

Sometimes the change is just one of personal preference. This typically happens when a neighbourhood that has been home for many years, changes to a completely different demographic. For some long-term residents, it just doesn’t feel like home anymore, and they sell their property and move to somewhere that better suits them.

Whatever the reasons, we are always available to help people find their perfect place, whether it is an apartment, a duplex, a free-standing house or semi-rural property.