I was out in Melbourne the other weekend at a bar in South Yarra & after a few drinks I was having a conversation with a writer from the UK. He is a couple of months off getting his book published and I can’t for the life of me remember his name to unfortunately quote him in this blog. He was an eccentric character as most writers usually are. He begun to tell me his theory on life – I felt obligated to listen to the self involved conversation as he was one of those personalities that you felt like you couldn’t escape. His comment was “Life is like an orange juice maker, you put that many bloody oranges in to only get a measly quarter of a cup” = you put that much effort into life to get little in return. I immediately thought it was a little cynical - if i was talking to the pom after the first test of the ashes he may've been a little more optimistic. (For the record if anyone reads a book and this analysis is in chapter 2, this is the guy I was talking to)
The next day I compared it to Real Estate and found there are a few mistakes which people commonly make that creates a situation where they put all those oranges in the juice maker only to receive a quarter of a cup.
Number 1 Mistake: Over capitalizing
The neighbor’s houses and the presentation of the area have considerable influence on the value of homes in the area. Before buying or building it is important to consider the housing styles, demographics of your neighborhood, and sale prices of other homes in the area that have recently sold.
The decision to buy, build or renovate a new home is not one to be taken lightly. It is recommended that you think through every aspect of the project prior to getting started. Seek the advice of a local real estate professional if necessary to determine how the proposed renovations will affect the value of your home.
A general rule-of-thumb for remodeling is to make sure that you don't over-improve your home for the neighborhood. From an investment position it's not a good idea, to improve your home to the point that it's best house on the block.
Number 2 Mistake: Renovating
Renovation is more expensive then what people think – working on older homes to restore it to it’s original condition is a very expensive process. Interior and exterior cracking is usually commonly found in older homes which can generally mean some issues with the foundation. Re-stumping is a costly job that older homes usually need to have redone. Electrical work is another major issue considering that there are new compliances that electricians need to follow. Re-wiring a home can also be a costly job & the chances are the more you dig around beneath the surface the more work you will find – which in turn means more costs
Common issues are:
Roof
Stumps
Rewiring and replumbing
Shower recesses
Pest (particularly white ant) damage
The costly exercise of renovating your home may not reap the rewards at the end when you need to re-sell
Number 3 Mistake: Building/Buying your dream home
Do not buy or build your dream home. You should always take emotion out of buying a home. Ask anyone who has bought and sold and I am sure they have made this mistake.
I know I have. I built a home & it was, I thought, ideal family home – 4bedrooms, 1, study, 2 bathrooms, ONLY 1 LIVING AREA. I never found only having one living area an issue when I was living in the home, after all there was only two people living there – myself and my brother. However a problem arose when my brother moved to Melbourne and we put the house on the market. Everything was built perfectly for a family yet we compromised on a living area because at the time we didn’t need it. If you put your emotions into buying or building I guarantee you will be short changed at the other end. It proved a costly mistake The truth is very few people live in the one home all their lives.
So now what I would say to the pom after pondering his quote on life – is you can get out what you put in – add water to the juice maker or simply thoroughly research every property investment you make. Everyone wants to get out of it what they put in or more!
Friday, July 24, 2009
Thursday, July 16, 2009
Cheap Tricks!
I can not stand the River’s clothing store adds on television, and I don’t think the cheese stands alone. Yes, most people hate them but we’ve all watched them. Most of all, I hate the cheap ploys that they use to get me to watch the television. For example the advertisements come on in between a program I am watching – all of a sudden a high pitched scream belts out of my television – OF COURSE I AM GOING TO LOOK UP. Or the old chestnut when you are listening to the background noise of the television then suddenly everything falls silent – what’s happened to my television? OF COURSE, YOU LOOK UP. They have used every little trick in the book to make you watch the advertisement. Marketing heaven or marketing hell I’m not sure, although I can still tell you every bargain or sale they’ve got on. I think this week is something to do with women’s $18 knits. So they have successfully got my attention – but would I ever buy the product?
A similar theory goes when buying a property. It may be an appealing photo used for marketing but unless the property is priced right then no one will ever call for an inspection. Or it could be the other way around – the price could be extremely appealing however upon inspection it is not how it was presented in the marketing.
If a property’s price sounds too good to be true – it usually is (exceptions are; deceased estates, mortgagee sales, vendors relocating etc), so find out why it is and if it is something that will or will not effect you. Buyers also have to be aware of the cheap marketing tricks used by some agents. I will never re-iterate this enough the only way to know you aren’t paying too much for a property is to do your reseach. Get out there – go to open houses – keep up to date with what’s selling and what price properties sell for. Get your agent working for you. They should be informing you of new listings, price adjustments, or properties that you have previously inspected that are since sold.
In answering my question above, I probably wouldn’t buy a product that a company is flogging if they have purely used cheap tricks to get my attention in the first place. It can also give the impression cheap tricks = cheap product. This is also very similar to the process of choosing a real estate agent or company to sell your property on your behalf. Just because you go with the cheapest agent doesn’t mean you are going to get the best result. Countless times I have witnessed Vendor’s go for the cheaper agent.
Rule No 1. An agent shouldn’t be chosen based on commission alone – it’s just bad business. You have to approach this the same way as if you were buying a house. Research who is getting the results, research who has the most listings, talk to people – more often then not everyone will have an opinion on Real Estate agents. Also the quicker the agent is to drop their commission – you can guarantee they will be doing the same at the other end – dropping the price to get the sale.
Rule No 2. Do not appoint an agent because they have the cheapest marketing campaign. Once again you get what you pay for. This is the most crucial part to selling your property. If the agent is only putting the smallest ad in the newspaper how then can you be sure that every single person is being targeted who could be interested in buying your property. Everyone knows, the more interested parties you get the better chance you have of achieving your asking price or a property selling for above your expectations.
The simple solution I can offer for all of this is…RESEARCH and be mindful of the cheap tricks.
A similar theory goes when buying a property. It may be an appealing photo used for marketing but unless the property is priced right then no one will ever call for an inspection. Or it could be the other way around – the price could be extremely appealing however upon inspection it is not how it was presented in the marketing.
If a property’s price sounds too good to be true – it usually is (exceptions are; deceased estates, mortgagee sales, vendors relocating etc), so find out why it is and if it is something that will or will not effect you. Buyers also have to be aware of the cheap marketing tricks used by some agents. I will never re-iterate this enough the only way to know you aren’t paying too much for a property is to do your reseach. Get out there – go to open houses – keep up to date with what’s selling and what price properties sell for. Get your agent working for you. They should be informing you of new listings, price adjustments, or properties that you have previously inspected that are since sold.
In answering my question above, I probably wouldn’t buy a product that a company is flogging if they have purely used cheap tricks to get my attention in the first place. It can also give the impression cheap tricks = cheap product. This is also very similar to the process of choosing a real estate agent or company to sell your property on your behalf. Just because you go with the cheapest agent doesn’t mean you are going to get the best result. Countless times I have witnessed Vendor’s go for the cheaper agent.
Rule No 1. An agent shouldn’t be chosen based on commission alone – it’s just bad business. You have to approach this the same way as if you were buying a house. Research who is getting the results, research who has the most listings, talk to people – more often then not everyone will have an opinion on Real Estate agents. Also the quicker the agent is to drop their commission – you can guarantee they will be doing the same at the other end – dropping the price to get the sale.
Rule No 2. Do not appoint an agent because they have the cheapest marketing campaign. Once again you get what you pay for. This is the most crucial part to selling your property. If the agent is only putting the smallest ad in the newspaper how then can you be sure that every single person is being targeted who could be interested in buying your property. Everyone knows, the more interested parties you get the better chance you have of achieving your asking price or a property selling for above your expectations.
The simple solution I can offer for all of this is…RESEARCH and be mindful of the cheap tricks.
Thursday, July 9, 2009
“Tap your heels together 3 times…There is no place like home”
Before I start this week’s blog I will let you know that I live at Westwood Park and therefore may have a biased opinion on the area.
The area I live in at Westwood Park is the perfect place for me to call home. We have fantastic neighbours on both sides. One side we have some empty nesters whose children have flown the coup. They include a water trader & also a business owner, on the other side we have a first home buyer who is rarely home, working away in the mines. Other people in our street include; business owners, ex-business owners, factory managers, factory workers etc.
All in all, our street is a very social one. City slickers rarely understand this – it is important for people who have grown up in country areas to know their neighbours, it provides a safety net. Our street is a congregation of people from all over: Boort, Ouyen, Geelong, Cohuna, Kyabram, as well as New Zealand & Ireland.
Every year we have a street Christmas Party – Santa, otherwise known as Rob my neighbour (safe to say after a bottle of wine) reluctantly arrives to deliver the children their presents. It’s a good opportunity for everyone to have a catch up before the busy Christmas period. It is not unusual in the court to hear the tunes from the street party going until the wee hours of the morning (with the broom becoming the centre piece, substituting as a microphone). I have also come home many a night to the neighbours congregating on a front lawn having a monthly catch up.
With the estate now almost completely full I have had some good sales in the area over my period of time in Real Estate ranging from $300k to $400k. There are also properties in the estate ranging from between $250,000 through to $600,000. The time and effort put into constructing some of the homes and surrounds have been phenomenal. As an investment new properties are always in demand for executive tenants or people in between building their home.
Our neighbours are more like family, they go above and beyond the call of just borrowing a cup of sugar.
“There is no place like home”.
The area I live in at Westwood Park is the perfect place for me to call home. We have fantastic neighbours on both sides. One side we have some empty nesters whose children have flown the coup. They include a water trader & also a business owner, on the other side we have a first home buyer who is rarely home, working away in the mines. Other people in our street include; business owners, ex-business owners, factory managers, factory workers etc.
All in all, our street is a very social one. City slickers rarely understand this – it is important for people who have grown up in country areas to know their neighbours, it provides a safety net. Our street is a congregation of people from all over: Boort, Ouyen, Geelong, Cohuna, Kyabram, as well as New Zealand & Ireland.
Every year we have a street Christmas Party – Santa, otherwise known as Rob my neighbour (safe to say after a bottle of wine) reluctantly arrives to deliver the children their presents. It’s a good opportunity for everyone to have a catch up before the busy Christmas period. It is not unusual in the court to hear the tunes from the street party going until the wee hours of the morning (with the broom becoming the centre piece, substituting as a microphone). I have also come home many a night to the neighbours congregating on a front lawn having a monthly catch up.
With the estate now almost completely full I have had some good sales in the area over my period of time in Real Estate ranging from $300k to $400k. There are also properties in the estate ranging from between $250,000 through to $600,000. The time and effort put into constructing some of the homes and surrounds have been phenomenal. As an investment new properties are always in demand for executive tenants or people in between building their home.
Our neighbours are more like family, they go above and beyond the call of just borrowing a cup of sugar.
“There is no place like home”.
Friday, July 3, 2009
AUCTION OR NOT – THAT IS THE QUESTION
In today’s market, the question on every home seller’s lips is how to get the best price for their property – to auction, or not to auction? Here is some helpful advice that might make this difficult decision a little easier.
Selling your home can be emotionally stressful, but being well informed about the process and alternatives helps instill a sense of control
What you should remember at all times is that property is a commodity, worth what a buyer is willing to pay for it.
Sometimes, it is better to go to auction to accurately determine market opinion, but in other cases it may be more appropriate to go through the private treaty sale process. Ideally, where there is likelihood that more than one buyer will be found in the marketing period, auction is the viable and preferable alternative. The area’s for this most likely to happen are the area’s in high demand. eg: Central Echuca, River Properties, or something that your property has that no one else’s does.
When there is a lot of housing stock available to choose from, then buyers have a broad range of choice as well as the power to keep prices down.
What an auction does is set a timeline by which interested parties must have completed their enquiries and arranged finance. It promoted decisiveness and allows the competitive nature of buyers to work in your interest. Also, it puts some surety into the process because a sale under the hammer on auction day is water-tight.
But with private treaty sales, there is a degree of risk. Two parties could make offers for a property, but if the chosen party’s finances fall through after you’ve accepted their offer, you either have to go back to the second party in a potentially weaker position than previously, or you have to start the process again.
With auctions, when the bidding reaches your reserve, the property is sold unconditionally.
First National has successfully been selling through the auction process. It’s a result that comes from a combination of having realistic, well informed vendors, effective, targetted promotion of the properties and an agent who understands the local area and auction process thoroughly.
Auctions are good where a vendor is realistic and willing to accept what the market is willing to offer on the given day.
But private treaty sales, in the right circumstances, can prove lucrative too, especially in today’s market at the top end.
This market has been moving more slowly in upper price ranges than the more affordable levels, so it may well be worth considering private sales in this situation.
Selling a home always carries some element of uncertainty – it is how you reduce, or mitigate, that uncertainty that is the key. Some may suggest doing that by private sale, others will swear by auctions. The best advice, though, is to get the best advice – talk to a real estate agent who knows the area and what is working well and what is not.
Selling your home can be emotionally stressful, but being well informed about the process and alternatives helps instill a sense of control
What you should remember at all times is that property is a commodity, worth what a buyer is willing to pay for it.
Sometimes, it is better to go to auction to accurately determine market opinion, but in other cases it may be more appropriate to go through the private treaty sale process. Ideally, where there is likelihood that more than one buyer will be found in the marketing period, auction is the viable and preferable alternative. The area’s for this most likely to happen are the area’s in high demand. eg: Central Echuca, River Properties, or something that your property has that no one else’s does.
When there is a lot of housing stock available to choose from, then buyers have a broad range of choice as well as the power to keep prices down.
What an auction does is set a timeline by which interested parties must have completed their enquiries and arranged finance. It promoted decisiveness and allows the competitive nature of buyers to work in your interest. Also, it puts some surety into the process because a sale under the hammer on auction day is water-tight.
But with private treaty sales, there is a degree of risk. Two parties could make offers for a property, but if the chosen party’s finances fall through after you’ve accepted their offer, you either have to go back to the second party in a potentially weaker position than previously, or you have to start the process again.
With auctions, when the bidding reaches your reserve, the property is sold unconditionally.
First National has successfully been selling through the auction process. It’s a result that comes from a combination of having realistic, well informed vendors, effective, targetted promotion of the properties and an agent who understands the local area and auction process thoroughly.
Auctions are good where a vendor is realistic and willing to accept what the market is willing to offer on the given day.
But private treaty sales, in the right circumstances, can prove lucrative too, especially in today’s market at the top end.
This market has been moving more slowly in upper price ranges than the more affordable levels, so it may well be worth considering private sales in this situation.
Selling a home always carries some element of uncertainty – it is how you reduce, or mitigate, that uncertainty that is the key. Some may suggest doing that by private sale, others will swear by auctions. The best advice, though, is to get the best advice – talk to a real estate agent who knows the area and what is working well and what is not.
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