Blogs

SHOULD YOU BE SWITCHING FROM INTEREST ONLY TO PRINCIPAL & INTEREST?

by Vivian’s Residential In Uncategorized

26 June 2015

Property investors should be fully maximising the current record low interest rates by switching from Interest Only to Principal & Interest loans. And those investors who don’t soon make the move may well find their lender does it for them.

With interest rates now around the mid-4% range, and even lower, there’s really no need to have an Interest Only (IO) loan, whether you’re an investor or owner-occupier. The significant drop in interest rates in the past couple of years means Principal & Interest (P&I) repayments are similar to what IO were.
Take the example of a $300,000 30-year loan. As the table below shows, monthly repayments at 7% (the average variable interest rate in Australia in the past 15 years) at IO are $1750. At 4.5% P&I (a common variable rate) they are $1520.
                                      7%                       6%                        5%                      4.5%

Interest only             $1750                   $1500                   $1250                   $1125
Principal & Interest  $1995                   $1798                   $1610                   $1520
So you’re paying a couple of hundred of dollars a month less in repayments at the current P&I rates, and starting to pay off some of the principal. If you actually maintained your repayments at $1750, you’d be getting even further ahead.
There is a very strong possibility that lenders will soon look to restrict or reduce the number of IO loans they offer, in response to warnings from the Australian Prudential Regulation Authority (APRA) about the need to slow investor credit growth.  We are now seeing lenders starting to actively raise the bar in terms of the requirements investors have to meet and the restriction of IO loans will probably be one of those moves.
Another option for investors might be to look to pay interest in advance on their investment loan. You will generally receive a slight discount on the interest rate and there may be tax benefits. Property investors would be well advised to work with a quality mortgage adviser to look at their current loan arrangements.This is to ensure they are maximising the opportunities associated with the record low interest rates on offer and managing lenders’ changing requirements.

(Thinking that’s not such a bad idea for us investors for the next few years at least)

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO !!


Tags:

Comments (0)

AUCTIONS – LOVE THEM OR HATE THEM

by Vivian’s Residential In Uncategorized

24 June 2015

Interesting that there is so many views about them.

Personally I think they are good for everyone.  The buyers get nervy about bidding but seriously you can see who you are bidding against, what I would feel nervous about if the agent rings you because you have indicated you are interested (and you should) because they are writing up an offer to present to the owner.  That is the time you have no idea where the price is at as it’s not being offered all you will be told is you have to put your best offer in at the start.  Happens unfortunately that buyers think that the agent is hmmm not telling the truth, I feel sad about that as it doesn’t give us a good name but with Vivian’s if you get that call you better believe it.  Personally I like to take it to Auction however if a really good offer comes in it’s not about the agent it’s about the Seller and you have to do what’s best for him/her.

Buyers get mad when the agent wont say what the reserve is – well the reserve doesn’t get set until the night before or on the day.  The reserve generally get’s set on the feed back from the buyers that have come through the home open.  What the agent should do however is give you a list of properties that have sold recently in the area so you can get some sort of an idea.  You should also indicate what buying price range you are in so if you are way off then the agent should tell you that.  Nothing worse than baiting a buyer.
I have always encouraged young people to come and practise at an Auction so they can go through the motions and feelings of what it is like so that when you do go to the auction of your choice you are prepared and not so nervous.  Believe me you feel like your heart is jumping out of your chest and you feel like everyone is looking at you – having bid at several Auctions I remember the feelings very well.  Don’t get me wrong it’s very exciting as well and you definitely should know what your STOP point is so you don’t get carried away.

The Seller get’s stressed what if it doesn’t sell what will people think.  Remembering that Auction is a three stage selling process.  You have the chance to sell prior to Auction, on the day or they usually sell within 10-15 days afterwards, still very short of the current days on market which can be up to 90+ days.
Receiving an offer before the auction should be a cash offer and a good price to stop the auction, its a shame that many of the buyers don’t want to participate in putting an offer in their very best offer, they will either win or lose it just the same as if you were at the Auction.

The Agent: well it can be very stressful for them as well, however if they do the required work it should all fall into place.  The main thing is to keep all buyers in the loop that have expressed interest.  Ringing back all buyers that have come through and making sure they don’t have any interest.  Many times I have talked with buyers who absolutely hate auctions and the reason why – they would have put an offer in before the auction if the agent had rung to ask them.  Now they say that they have told the agent they are interested cannot guarantee that of course but if you dealt with Vivian’s and said you had interest you would be getting calls and that’s a guarantee.

It’s interesting that some agents don’t believe in the Auction process saying that it’s under selling or putting the owner under duress to sell on the day – no we don’t do that either there is a price point of selling and only if it’s close and the Seller is asked did they want to go on the market at that point that is their choice.  Trust is a big thing so when you choose an agent just remember that if you don’t trust them then don’t use them.

Mortgagee Auctions are the ones to go for as the banks just want them sold different scenario.

I suppose because I have been trained in Auctions I don’t fear them, I know the work load is intense and its a whole 2-3 months crammed into a 4 week programme so its masses of work however if all parties agree on that method its an excellent way to sell your home.
Just don’t do what I did give yourself 4 weeks to sell and have to sell on the day not a good idea – you learn by your mistakes I guess but I still believe in the Auction process.

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO !!


Tags:

Comments (0)

TRADING UP

by Vivian’s Residential In Uncategorized

22 June 2015

Home owners are taking this opportunity of a flat market to trade up.

Such a good idea especially if you have been in your home for 10 years plus.  Although you wont get the top dollar you would have in 2007 you still will be reaping the benefit of trading up in your home.

Many of my clients also have taken advantage of renovating instead of upgrading because if their home can be made to fit their latest requirements it makes a lot of sense (not good for us but it’s not about us is it?)

The section of the market that is going along really nicely is the $2 million plus homes which have been significantly reduced in recent months offering exceptional homes for a reasonable price.

Also what is being very popular at the moment is homes on large blocks, the homes may not necessarily be wonderful but people are looking to build on those in the near future.
With R codes changing and the Government wanting higher density the large block will become a rare breed in the future.

I just wonder how bigger a home people need with the energy costs the way they are it takes a lot for the up keep of these larger homes – just a thought !

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO !!


Tags:

Comments (0)

THE MARKET

by Vivian’s Residential In Uncategorized

18 June 2015

I originally set up this blog many years ago so that buyers could tap into it and get the down to earth version of what’s happening in the market.  They were so confused by what agents, newspapers, friends, procrastinators were all saying it was making them so nervous that they were ending up doing nothing.  Same thing is happening again.

Again I will reiterate to those buyers out there DO NOT LISTEN TO PEOPLE WHO DONT HAVE REAL ESTATE !!  The people that have the most to say are the fence sitters themselves always missing out on that great opportunity – ask yourself WHY !!  because they actually cannot make a decision and they fear the next step.

I understand that buying your first home or an investment is a huge step but you have to define what you are in fact looking for, keep within your budget although agents try and push you above it, stick to it.  No property is going to be EXACTLY the right one even if you build one they are never EXACTLY what you want.

Align yourself with an agent you feel comfortable with, tell them your exact budget minus probably $10k to $20k for stamp duties, settlement fee’s (depending on the purchase price) and be shown those that are obtainable.  Where the problem lies is agents or yourself are going to homes that are $100k over your budget, then when you come down to your exact price range you cannot accept what is being offered up to you.  People have to start somewhere and it’s about getting you into the market.

You may not stay at the purchased property for more than a year, you can rent it out and go rent where you want to live, but seriously you need to put yourself into top gear and get moving as with the interest rates being so low and an abundance of property on the market the ball is currently in your court.  If you keep listening to those negative procrastinators you will be continually missing the boat.

What I can tell you is THE MARKET IS THE MARKET if you are the flipper then this market would not work for you, but if you are the person that is upgrading and has had their home for the last 15 years definitely working for you, yes you wont sell your house for that 2007 boom price but you have still made good money and the one you will be buying is also down so win win.  If you are entering the market for the first time you are not feeling stressed right now as you are generally not competing with anyone, if you are the investor yes the rents have gone down but it’s really to what they should be so get in there and pick yourself up a really good buy.

All in all we have come back to a “normal” selling market where homes will sit on the market for 3 plus months unless its a set date sale, auction or a time frame marketing programme buyers are simply taking their time (now wether they are taking too much time to decide is another thing)….

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO !!


Tags:

Comments (0)

PET PROBLEMS WITH RENTALS

by Vivian’s Residential In Uncategorized

15 June 2015

Supplied by REIWA President – David Airey 13/6/2015

It’s a sad story when you hear that tenants have to give over their pet to the RSPCA because they were not permitted to keep animals in their rental.

Please do check prior to signing your lease if animals are allowed don’t think you can just sneak them in you will get caught at some stage and heart break will follow.

When this happens it’s almost always because the tenant didn’t advise the property manager or landowner about the pet before moving in, or they obtained the pet after moving in even though the lease didn’t allow it.

It’s a very similar situation in strata buildings.  Even if the resident is the owner of their particular apartment or villa, if the strata bylaws don’t allow pets then you must abide by that and you have an obligation to be aware of the by-laws before moving in.
Most strata’s do not allow pets.

Pet owners have a responsibility to be up-front about their companion animals when applying for a rental or buying into a strata complex.
It can be hard for tenants with pets to find a home that will accommodate them.
No matter how good your dog is generally there is some damage associated with them unfortunately.  It’s up to you to make it all good then there wont be a problem.

An increasing number of people keep pets for companionship or security and most pet owners are responsible about the care and behaviour of their animals.
Being a pet owner myself I completely understand why people want pets, but if you are working all day and the animal is at home alone you have to ask is it fair?  Mine comes to work.

Under the Residential Tenancies Act, property owners have the right to refuse pets, although most property managers will advise owners to keep an open mind, provided the dwelling is suitable for the animal.
They are either a pet lover or not.

Landowners can require  pet bond of $260, and in addition to this any repair of damage caused by the animals that is not rectified by the tenants at the end of their lease can be deducted from the main bond.
Hardly big enough bond I would think to sway any landlord that is not a pet owner.

Animals that are unclean, unsafe or a nuisance can be removed and/or the tenant’s lease can be terminated.
Probably shouldn’t have an animal if they don’t take care of it I think personally.

To help landowners and pet owners, REIWA has produced a Pet Lease Agreement used exclusively by our property managers and which has been well received in the community.

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO !!


Tags:

Comments (0)

DZL FINANCE NEWSLETTER

by Vivian’s Residential In Uncategorized

12 June 2015

Can you believe how time flies? Winter is here and we are rapidly approaching the end of the financial year already! That makes it a great time of year to get that new car, or buy new equipment for your business, so if you need financing for these items, don’t forget to give us a call.

This month, the news continues to be positive for property buyers and investors. At its June meeting, the Reserve Bank of Australia (RBA) decided to keep rates on hold at 2.0 per cent. The decision was widely expected by market analysts, after the RBA cut rates in May and February this year, bringing interest rate to all-time record lows. Nevertheless, further rate cuts could be on the horizon later this year, which could bring the cash rate down below 2.0 per cent. Analysts are predicting that if there is another rate cut this cycle, it will be likely to occur as late in the year as November. Low interest rates have been stimulating the property markets Australia-wide. Last week there were 2,727 homes taken to auction nationally, which is up from the previous week. The national clearance rate was approximately 78.9 per cent, and whilst this is down slightly from the week before, it was the tenth week in a row where the national clearance rate was above 77 per cent. Sydney and Melbourne markets are still a stand out from our remaining capital cities. Last week there were 882 auctions held in Sydney, with a clearance rate of 86.5%, while Melbourne held 1,053 auctions with a clearance rate of 78.3 per cent. For the other capital cities, Brisbane held 146 auctions with a clearance rate of 52.1 per cent. Adelaide’s auction activity was significantly less with just 92 auctions and a clearance rate of 72.1 per cent. In Canberra, 52 auctions were held over the week with a clearance rate of 70.4 per cent. Perth had just 20 auctions with only 10 results reported – a clearance rate of 50 per cent. Activity in Tasmania saw 13 auctions take place during the week, with a clearance rate of around 40 per cent. For most of the country, activity is starting to slow down a little as we head into the traditionally quieter winter months. This is reflected in home values for May which were mostly showing slight declines. Sydney home values were down by 0.67 per cent over last month, but were still up by 15 per cent year on year. Melbourne home values were down by 1.72 per cent over last month, but were still up by 9 per cent year on year. Brisbane/Gold Coast home values declined by 0.8 per cent, but were up by over 3 per cent year on year. Adelaide’s home values were down by 0.16 per cent, but were up by 3.37 per cent year on year. Hobart’s home values were down by 2.71 per cent but only showed a decline of 0.97 per cent year on year. Canberra bucked the trend, with home values increasing in May by 1.39 per cent, with an increase of 2.40 per cent year on year. Darwin home values were also up for the month, showing an increase of 0.56 per cent, but a year on year decline of 2.02 per cent. If you’re in the market to purchase a property, then the slow-down in the rise in property values will come as very good news. Also good news is the great interest rates currently available on home loans – with the recent rate cut last month, we’re experiencing some of the lowest interest rates on record. Now is a good time to talk to us about getting pre-approval on your next home loan, so don’t hesitate to give us a call for a chat today. Sincerely, Gary Fernandez I have always said Winter is a perfect time to buy property – there is less people looking, you can see the property in the worst time of the year, spot leaks etc.

MAKE YOUR OWN DECISION AND GIVE IT A REAL GO !!


Tags:

Comments (0)

What safety responsibilities do you have as a landlord?

by Vivian’s Residential In Uncategorized

11 June 2015


photo-child-blinds
Owning a rental property means that you have an obligation to ensure your property meets certain safety standards. 

The three main safety issues to be aware of as a landlord are chain ties for blinds and curtains, having fences around pools and spas to reduce preventable deaths of children and RCDs and smoke alarms. 

Blinds and curtains

Unsecured blind and curtain cords (or chains) pose a significant risk of strangulation to young children, so it’s critical that your rental property meets certain safety standards. 

Under common law, you, as the landlord, have a duty of care to your tenants – as well as anyone who is invited over by the tenant – to ensure the property is safe from preventable hazards. 

You should keep an ongoing eye on these areas of your rental home. As part of the rental inspections, your property manager will report back to you if there are hazards that need to be addressed. Anything that is identified should be rectified as soon as possible. 

The Department of Commerce (DOC) recommends that when you buy blinds and curtains, you should choose ones with safe design features that; 

  • have warning labels
  • provide a way to secure cords and chains so there are no loops or strands that children can easily reach, or
  • operate without exposed chords or chains.

View the DOC’s fact sheet on the obligations of landlords for corded internal window coverings. 

For information on installation of blinds and curtain cords, view Product Safety Australia’s installation guide. 

Pool and spa fences

Pools and spas are another area of a home that pose a risk to children if not properly secured. 

photo-young-boy-poolAccording to the DOC, in WA, domestic swimming pools are the most common site in which drowning for children up to five years old occurs. If your rental property features a pool or spa, you must ensure it meets the safety requirements established by local government building laws and residential tenancy laws. 

You are also obligated to arrange for urgent repairs necessary to avoid exposing a person to the risk of injury and comply with all requirements 

View the Building Commission’s Rules for Pools and Spas booklet. 

RCDs and smoke alarms

It is important that your rental property is equipped with RCDs and smoke alarms. 

If you own a rental property, regulations require that it is fitted with at least two RCDs protecting all power and lighting circuits. These must be installed before offering your property up for lease. 

View the DOC’s RCD fact sheet. 

You are also required to have smoke alarms fitted in your rental property that are no more than 10 years old, in working order and are permanently connected to consumer mains power. 

For more information, visit the DOC’s smoke alarms and RCDs page. 

If you have concerns about the safety of your rental property, contact your REIWA property manager for further guidance. 
Very good advice as the rules and reg’s are getting harder and harder for landlords to keep up with it’s best to entrust your property with a rental agency. 

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO !!


Tags:

Comments (0)

Housing affordability critical for those in need

by Vivian’s Residential In Uncategorized

08 June 2015

photo-homeless-person-on-street

The latest annual Economic & Social Impact Survey by The Salvation Army, which looks into the economic circumstances and social well-being of people who come to them for assistance, highlights housing affordability as a critical issue in Australia. 

The survey found that across Australia, 76 per cent of people who approached them for assistance were renting their accommodation, while a further 13 per cent were homeless. 

Of those in the rental system, 41 per cent were renting privately and 31 per cent were renting through government or community housing. 

On average, disadvantaged Australians were paying $305 per week on private rental accommodation or up to 59 per cent of their disposable income. This is three times more than the average Australian and twice the common ‘30 per cent benchmark’ used to measure housing stress. 

The report also found that 78 per cent of respondents who were living in private rental accommodation were experiencing ‘extreme housing stress’, when coupled with their other expenses and general cost of living. 
The rentals have taken such a hit that the rent per week has dropped dramatically

President of the Real Estate Institute of Western Australia, David Airey, said that a safe secure home was foundational to health and well-being and that a country as wealthy as Australia should do more to provide affordable housing to those in genuine need. 
The trouble is with Australians there is some expectation that they have rights to what every working Australian has – our social system is one of the best and personally I think that needs to be severally overhauled as it’s being abused by those that don’t need it

“The housing system is complex and there is no ‘silver bullet’ to bring about the perfect outcome, however, there are opportunities within both the State and Federal Governments to reform taxation arrangements to make both buying and renting more affordable to those on very low and fixed incomes,” Mr Airey said. 
Strongly agree

Mr Airey said that while most people living on benefits and pensions were renting in the private system, the State Government was discouraging investors to own and provide much needed rental stock with its increasing appetite for land tax. 
There is no incentive for people to buy investment properties the taxes are so high with a

“Putting up land taxes every year simply forces many landlords to pass that cost on to the tenants or leave the property market altogether. Around 80 per cent of all rental homes are provided by private investors who should be recognised as making a positive contribution to the whole housing system,” Mr Airey said. 
Oh my goodness absolutely why the Government should not be putting any of those costs up

Mr Airey also said that the stamp duty exemption for first home buyers was a very important key to affordability and that the State Government should not be tempted to remove it. 
Suicide I would have thought

“Stamp duty relief for homes under $430,000, means many first home buyers can save up to $14,000,” Mr Airey said. 
This was up to $500,000 which was more realistic, however we have to deal with $430,000 now

In recent years REIWA has partnered with The Salvation Army through its Community REInvest program which has so far donated more than $130,000 from REIWA agents. 
Always a very worthwhile cause

That’s why it’s critical for investors to keep buying homes as the Government cannot supply enough homes.

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO !!


Tags:

Comments (0)

REAL ESTATE SECTOR COMES OUT ON TOP IN FEDERAL BUDGET?

by Vivian’s Residential In Uncategorized

02 June 2015

 

photo-parliament-house
Wins for small businesses and the retention of key tax arrangements that benefit housing investment are the big positives for real estate in the 2015-16 Federal Budget. 
What to keep what they already had – they should be grateful – you serious?

The Real Estate Institute of Australia (REIA) has welcomed the Federal Budget, announced Tuesday, with Chief Executive Officer Amanda Lynch congratulating Treasurer Joe Hockey on listening to the real estate sector. 
If they wanted to they would just do it – since when do they ever really listen to anyone but themselves?

“The Government is to be commended for ensuring stability within the sector in continuing the current tax arrangements as they relate to both Capital Gains Tax and negative gearing. 
If they didn’t there would have been a huge out cry and it would be bye bye for them.  The investor provide many homes for people to rent, without them it would be back on the Government – get real the Government needs people to invest.

“With other sectors of the economy slowing, housing will play an increasingly important role and it is pleasing to see the Government has not tampered with tax arrangements that have been proven to help stimulate housing investment in Australia,” said Ms Lynch. 
They lowered the first home buyers rate from $500,000 to $430,000 they should have put it back there, homes are not affordable in the Western Suburbs at $430,000 unless it’s a unit.

Ms Lynch said if negative gearing had been abolished, it would have resulted in a dwindling supply of properties for rent, escalating rent prices and reduced opportunities for low to middle income earning Australians to create wealth for self-funded retirement. 
Some one that can think at least.

The wins for small businesses included tax cuts, immediate deductibility for professional expenses, capital gains tax roll over relief for changes to entity structure, changes to the fringe benefits tax system for work related electronic devices and expanding accelerated depreciation. 
If you think you can just keep taxing the poor small business man, keep going as you will send many more to the wall.

“We strongly welcome the small business package that will give business owners meaningful incentives to hire, invest in equipment and importantly grow their livelihood,” Ms Lynch said. 
Hmmm have to look at the package before I would comment.

REIA also commended the Federal Government for listening to the real estate industry on the issue of foreign investment. 
It’s about time they got their own house in order and it was about time REIA pulled them up.

“We welcome the commitment of $67.2 million over four years to improve compliance and strengthen enforcement. We have long argued the Foreign Investment Review Board was caught asleep at the wheel. Compliance is now in the hands of the Australian Tax Office (ATO) to the funding needed to ensure the ATO has some teeth in enforcing the new regulations,” Ms Lynch said. 
We will be watching to see what happens.

Infrastructure was another positive out of the 2015-16 Federal Budget, with the Australian Government committing to providing Western Australia with $499.1 million towards economic infrastructure projects in WA for 2014-15. 
Boom or bust for WA isn’t it always.  WA provides Australia with so much money so they should be giving us a heap back.

The Government has also pledged to establish a five billion dollar Northern Australia Infrastructure Facility that will be available for major infrastructure projects such as ports and railways in WA, the Northern Territory and Queensland.
That’s great for all those states.

All I can see is that they just keep putting our taxes up, taking away more benefits and still expect us all to be happy !!  Well there will come a time when Australians will sit up and say enough is enough.  Keep giving to everyone else except the Australian people as we are very generous people – or should I say the Government is with our money !! 

View the 2015-16 Federal Budget.

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO !!


Tags:

Comments (0)

      

Tag Cloud

Back to Top