Saturday Summary – the most interesting property investment articles I’ve read this week (2013/08/10)

There are more property investment articles, commentaries and analyst reports on the Web every week than anyone could read in a month. Each Saturday morning I like to share some of the interesting ones I’ve read during the week.

Enjoy your weekend…and please forward to your friends by clicking a social link buttons on the left.

The 20 questions to ask before you buy an investment property: Margaret Lomas

Margaret Lomas is the host of two weekly property investment shows on Sky News and author of a number of top selling books. Recently Property Observer gave a list of her  “20 must-ask questions” before you buy an investment property:

  1. What is the cash flow of this property? Have I taken into account all costs and can I afford to support it if it is negative?
  2. What is the vacancy rate of the area? Start at the Real Estate Institute (REI) website.
  3. What improvements are being planned for the area? Not all are positive; not many people want to live near a garbage tip or major entertainment venue.
  4. What is the population growth? Nil or negative growth is usually not a good sign.
  5. What is the competition? Look at approved development applications.
  6. Is the property tenant-friendly? Forget fancy fixtures and fittings that will be costly to repair and replace.
  7. What condition is the property in? Always pay for a building inspection and remember it’s tax deductible.
  8. Does it have furniture? This is a must for a tourism property.
  9. Is there a body corporate? If there is, carry out a body corporate search.
  10. Is there a rental guarantee? Remember, a guarantee is only a promise which has no regulatory backing.
  11. What is the current property management arrangement? What does it cost? Does it work well?
  12. Is there a leaseback? Even though an operator is your tenant you need to check them out just like any other.
  13. In the case of a new or off-the-plan property, who are the developers?
  14. Is there a dual purpose, if this is a niche market (purpose-built) property?
  15. What is the land availability in the area? Scarcity will lead to higher prices.
  16. Is it close to a large city? Make sure it’s easy to get to the city by both private and public transport.
  17. How old is the property? Older properties have less deprecation benefits.
  18. Is the property at market value? Research recent sales.
  19. Is the town you are considering based on just one industry? Avoid it.
  20. Are you being commercial in your approach?

 

Where’s the next property hotspot? | Why rents won’t rise in the next few years | Traps in buying off the plan

Another great Real Estate Talk show  produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.

Details of this week’s show:
Rob Balanda sets out the 8 key areas you should pay particular attention to before you part with any cash
Michael Yardney tells us why he doesn’t really care where the next hotspot is
Stuart Wemyss explains how  you save a considerable amount of interest
Louis Christopher talks about rent movement

You should definitely subscribe to this weekly audio program. Click Here It’s free and you can listen on the go on your smartphone, iPad etc.

 

The average capital city home owner is almost $30,000 better off since Australia’s housing market started to recover in June last year.

Tim Lawless of RPData writes:

Over the past five years to July 2013 dwelling values across Australia’s capital cities have increased by 14.8%.  That’s interesting information, but for a lot of people it actually doesn’t mean much at all.  A percentage shift doesn’t provide a great deal of context about the raw magnitude of the change.

[sam id=37 codes=’true’]Home owners are more interested in how much money they have gained or lost.  Expressed in dollar terms, a 14.8% rise in dwelling values over the past five years has provided the average home owner with roughly an additional $63,000 onto the value of their home.

But that’s not as good as it used to be…

Compared to the previous five year periods, the most recent half decade growth rate is relatively tame.  Between July 2003 and July 2008 capital city dwelling values increased by just over 34%, equating to roughly $108,500 in capital gains over the period.  The five year period from July 1998 to July 2003 recorded an even larger capital gain of 89.5% or a gross wealth injection of just under $150,000 for the average home owner.

 

John McGrath’s seven tips for buying before auction

Real Estate guru John McGrath gave his top tips for buying prior to auction:

1. Tell the agent you’re interested and ask if the vendor is willing to sell privately. If the agent gets a flood of offers after the first open and you haven’t made yourself known to them as a serious buyer, you might not get the chance to make an offer.

2. Let the agent know you have pre-approved finance. This is a very important signal that you’re a serious buyer.

3. Offer a price that is close to your walk-away figure. Vendors will only entertain the idea of selling prior if a premium price is put forward. As with all negotiations, the vendors will assume your first offer isn’t your best so leave some wiggle room.

4. Waive your right to a cooling off period to show you’re a serious buyer.

5. Do more than a verbal offer. The best way of showing you’re serious is by signing the contract and attaching a cheque for the deposit. Alternatively, put your offer in writing and mention you have your finance approved.

6. Offering odd amounts is a great tactic especially after making a couple of lower offers. For example, rather than offering $460,000 or $465,000, offer $463,500.  An odd amount suggests there’s some logic to your offer and it also implies that you’re at your financial limit.

7. Be prepared for a situation where you and another buyer are at the same price, so it will come down to a race to exchange. If neither of you are willing to offer more, it will be a matter of who can get themselves organised and in a position to sign the contract first.

 

What single women are doing that men aren’t

Apparently, savvy single ladies in the US have been buying homes at twice the rate of their single male counterparts since the mid-1990s.

And a 2012 Westpac Report on Women’s Finances by Generation, found Gen Y women in Australia to be more financially focused than previous generations. Many of them are highly educated, and waiting later to get married; and they want to experience financial independence and security now.

Read more in Domain here

 

Blogs you may have missed this week:

If you didn’t have a chance to read my daily blog, here’s a list of the blogs you missed this week:

What’s the right investment strategy for this stage of the property cycle?

Property development guide part 12 – Enlisting the help of a town planning consultant

29 important insights from Nassim Taleb

Housing finance another positive sign for our property markets

Your Life, Your Way

Is Australia’s cost of living spiralling out of control?- Pete Wargent

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If you’re serious about property investment please join me and a group of property and tax experts at my upcoming Property Market and Economic Updates that I’ll be conducting in 4 states in August and September 2013

I will be presenting a heap of BRAND NEW content I haven’t discussed in public before. I guarantee there will be several things I reveal that you are not doing and you should be!

Click here now to get more details and reserve your seat.

Property & Econonomic Update

If you want to cut through all of the media hype, and all the contradictory predictions, and finally learn the truth (good and bad) about what is going to happen to the Australian property markets, this seminar is exactly for you…  Click here now to get more details and reserve your seat.

Michael Yardney

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About

Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been once agin been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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