Sunday 26 July 2015

3 tips for getting the best interest rates


3 tips for getting the best interest rates

From the Smart Property Investor 27th July 2015

Interest rates get a lot of attention and for good reason determine the cost of your loan and what you pay back. Even a small difference in rates can make a big difference to repayments.

Sometimes, what appears to be the ‘cheapest’ rate isn’t always right for your circumstances: thorough research is needed to ensure you get the best rate for your loan.



There are many types of interest rates: variable, fixed, split, introductory, principal and interest or investment only, each with their own advantages and disadvantages and it takes a lot of work to sift through different loans and lenders to secure the best deal.



The devil is always in the detail – you need to know what you’re looking for and below are three tips to help you find the best interest rate for you.



1. Don’t be dazzled by honeymoon rates. As the name suggests, they run for 12 months to two years, but the life of your loan can last up to 30. To put that in perspective, the lender is generally not going to let you get out of the loan at the end of the introductory period without charging a penalty. After all, once they get you in the door, they don’t want to let you go.



2. Introductory rates take one of two forms: “fixed discount” and “discounted fixed” rate. The fixed discount is a rate that is variable, but fixed at a certain level or margin below the standard variable rate. During introductory period, this means the discounted rate will move with the market. The discounted fixed rate is a rate fixed for the introductory period of the loan, and won’t move with the market. Some lenders may “cap” or limit the amount of extra money you can pay off the loan during the introductory period, which in turn may limit the benefit of having the introductory period.





3. Given Australian banks and mortgage insurers have specific criteria they use to assess loan applications, if your situation falls outside their guidelines it can be expensive getting your application approved. For example, if you want to borrow 80 per cent or more of the loan price, mortgage insurance will apply and the cost can vary dramatically between lenders. By shopping around a borrower can save as much as $2000 on a loan size of $600,000.



So what should you do to get a clear picture of the best value loan? Compare interest rates, product features and fees and charges, because they can add up to thousands of dollars over the life of your home loan.
 
 
 

3 ways to find a hotspot before everyone else


3 ways to find a hotspot before everyone else

From Smart Property Investor 27th July 2015

Property investors are often searching for the next boomtown or ‘hotspot’, but sometimes if you’ve heard about it, you may already be too late.

Unfortunately, most people tend to get in when the boom is beginning to tip over the edge. This usually happens for a couple of fundamental reasons: outdated information and emotion.

Firstly, consider where you’re getting your market information from. If you hear about a hotspot through the mainstream media, you have probably already missed the boat and the real profits. When we hear about a hotspot this way, emotions can take over and a fear of missing out can creep up.

Emotions and investing simply don’t mix well together and will often end up costing you money and causing _heartache.

So how do you know when a hotspot is about to become a ‘not-spot’?

You need to understand that property markets are driven by emotion. Investors need to make sure they stick to the numbers and keep an eye on the emotional state of other _buyers.

Remember Warren Buffet's famous saying: “When others show fear, I show courage; when others show courage, I show fear”. Spotting the peak of a hotspot means assessing the emotional state of the marketplace and being ready to show that fear. Use these three key points to learn whether you have missed the hotspot or not.

Walk the beat: Attend open for inspections and see how many people are there. Are there 20 people lining up to see one property? Do you have to take a ticket to get in line and get in the door? ‑This lets you know that there is a white heat in the market and you might be about to get burned.

How quickly is property being sold? Look at Blacktown in Sydney as an example: It was a key hotspot a few years back and many say it still is. Investors are now paying a premium to get into that market. Property is coming onto the market and is gone again the next day, selling for $20,000 to $50,000 over and above the asking price, and auction clearance rates are hitting upwards of 80 per cent. This is craziness! ­

The 20-crane rule: Once a market starts moving it often attracts developers. Developments tend to go crazy as the market gets hotter and more developers move in to build, build and build. When you start to see this level of development, alarm bells should ring. ‑This development can often lead to an oversupply of property and a subsequent depression in property prices. This is exactly what occurred in Melbourne in 2011 when that market peaked. If there are 20 cranes in the skyline, there is obviously a lot of development occurring and supply levels will start to stack up – so be wary. For regional areas, these signs are going to be different. Always check the level of supply coming onto the market and whether the population growth is strong enough to suck it up.

Keep a look out for these signs in the market and remember that emotions can cost us money. Being able to assess the emotions of others and the markets means you can try and time your purchasing and selling cycles to make the maximum profit.

NT and Queensland have the highest number of renters



NT and Queensland have the highest number of renters
From the Residential Property Manager 16th /17th August 2015
Research has found a close link between rental numbers and belief in the possibility of home ownership.
According to a recent Nielsen report commissioned by Domain Group, the Northern Territory has the highest share of the nation's renters at 43 per cent of the territory's households.
It is followed by Queensland on 37 per cent, and NSW and the ACT, which were both on 33 per cent.
The share of renters in the other states was 28 per cent for Victoria, 27 per cent for Western Australia and South Australia, and 20 per cent for Tasmania.
Domain senior economist Andrew Wilson said the high number of renters in the Northern Territory reflects low home ownership rates, with 62 per cent of the state believing home ownership is unattainable.
“High housing costs in the Northern Territory remain a significant barrier to home ownership, resulting in the highest proportion of renters to total households of all Australian states and territories,” Mr Wilson said.
“Although Territory incomes are the among the country’s highest, local rents are clearly the highest, providing another significant barrier to home ownership for those saving for a deposit.”
Home ownership was viewed as unattainable by 52 per cent of Victorian residents and 51 per cent of NSW.
Close behind was Western Australia at 49 per cent, followed by Queensland at 47 per cent and South Australia at 46 per cent
At the bottom end of the states and territories, 44 per cent of ACT believed home ownership was unattainable followed by Tasmania at 38 per cent.
 



Home buyers guide Tricks used to make you pay more — and how to avoid them


Home buyers guide Tricks used to make you pay more — and how to avoid them

From the Daily Telegraph Sydney July 25th 2015

BUYING your dream home is a process that’s bound to stir up strong emotions.

Endless Saturdays spent at auctions — and the frustration of watching someone else seal the deal on what looks like your ideal abode — can take their toll.

But the worst trap a homebuyer can fall into is letting their feelings take over the transaction, an experience that’s all too common, especially in Sydney’s hyped-up property market.

Whether it’s high ceilings and polished floorboards, a luxurious second bathroom, a wine cellar or a French provincial kitchen that captures your heart, keep in mind that the fundamentals of a property’s value may have nothing to do with these trimmings. Nor do the designer furnishings installed by interior decorators, whose bread and butter is extracting more money from you.

A Commonwealth Bank survey of Australian buyers in 2013 found many admitted to being influenced by emotional characteristics of the property up for sale — and 44 per cent paid more for a property simply because they “really liked it”.

With properties selling as much as 10 per cent over the price guide the norm, it’s hard to know when to walk away, especially once buyers get caught up in the theatre of an auction.

The ever-present FOMO (fear of missing out) can push a house hunter over the edge and into dangerous overspend territory.

Property expert Peter Boehm, author of The Great Australian Dream, said first home buyers were particularly vulnerable to being led by their hearts.

And the number one tip he has for them is to “check your emotions at the door”.

“Buying a property is an emotional experience, because it’s probably the biggest investment you’ll make in your whole life,” Mr Boehm told news.com.au

“It’s going to be with you for some time, so it’s got to feel right. But the problem with that is that something that might feel right, might be out of your capacity to buy.”

He said many first home buyers “start looking at properties they shouldn’t, and then they get discouraged.”

They might show up at a few auctions and be quickly outbid, or have an offer on their dream property rejected, then become disheartened by the whole process.

“Unfortunately, the reality in today’s world is that you’ve got to be pragmatic,” Mr Boehm said.

The best approach, he said, was to understand your buying power, set your budget, and only look at suburbs where the median selling price is within it.

And once you are at the auction, “never bid with your heart”.

“You could end up being a slave to your mortgage and your first home could be a trap, it could be like a prison,” Mr Boehm warned.

Keep in mind that a sophisticated auctioneer will be working to draw you in, get your confidence, and generate competition among bidders.

“It’s their job to engage with you and talk about all the good points of the property.”

Psychologist Sarah Godfrey said emotions were an inevitable part of making big purchases, but you could minimise their impact by being aware of how they affect you.

“All our decisions are emotional, no matter what,” Ms Godfrey said.

“Studies should that we can’t actually make a decision unless we can get a sense of how we feel about the options.”

It’s just how we’re wired, she said.

And skewed decision-making often reared its head in distinct ways at auctions, where Ms Godfrey said there was four personality types to watch out for — in yourself and others.

1. The competitor: “This is the person who is in it to win. It doesn’t matter if they want the house or not, they just don’t want you to have it. They get caught up in ego and pride, because you are bidding against them.”

2. The dreamer: “The buyer who walks into a house and is off in fantasy land — women are particularly bad at this. They fall in love with a person’s lifestyle or status and are mesmerised by a clean and beautifully-decorated house.”

3. The adolescent: “Wants it now and doesn’t want to think about the long-term implications, driven by impulse and immediate gratification. Not realistic about price or essential characteristics of the property.”

4. The narcissist: “This is the person who has the real estate agent tearing their hair out. They believe they should get the house at a better price than anyone else and will not back down, they are grandiose and will fight to the last $1000.

Ms Godfrey said that while we’ve all got a bit of these archetypes in us, watch out for them or you might make a decision you will regret.

If you’re standing next to someone who appears to be “bidding without thinking” in a bid to get one up on you, “step back and think. Why is this person bidding this way? Is this becoming a battle?”

Sydney buyer’s agent Marcus Gould knows how easy it is to make the wrong decision in the property market.

“We take the approach that if you’re buying a property as your primary residence, you should see it as an investment,” he said.

“That’s what having an arms length buyers agent on your side is good for; it gives you that advantage.”

While it’s his job to remove stress from the process by taking over the search, Mr Gould has some tips for those who want to go it alone — starting with “do your research”.

“You’ve got to understand the suburb you’re buying in,” he said.

“Which streets are selling for a higher price, and why? Some streets are better than others; do your due diligence.”

This means looking past the shiny floorboards and tasteful furnishings which the agent has carefully ensured will capture the eye.

“The beautiful furniture and styling, it’s all there to make you want to buy. You’ve got to see past that and look at the quality of the structure,” he said.

“It’s important to look at the floor plan, and check to see if they’re common in the area. If not, you might have trouble selling it because it’s not as suitable,” Mr Gould said.

And it might sound obvious, but take a fine-tooth comb to all the relevant inspection reports.

“I know people who get the building and pest reports and they don’t even read them,” he said.

A good buyer’s agent will take down all the attributes of a potential purchase and put them in a spreadsheet for you, comparing them in detail with similar properties that have sold in the area.

“We look at the comparable sells — not the ones the seller’s agent puts in front of you, because sometimes they are no directly comparable,” Mr Gould said.

When it comes to bidding at auction, he said, “we’re always there first.”

“See how many people register, so you know the level of competition. Not all registered bidders will actually bid, but it’s good to keep an eye on what’s going on.”

Then, he said, look for signs of weakness in your competitors. Mum-and-dad buyers could be spotted a mile away, and were notoriously emotional bidders.

“When they start to bid in smaller increments, it’s a sign that they’re coming to the end of their budget. So if they start bidding in increments of $5000 or $10,000, we continue bidding at $20,000.”

Finally, patience is key: it takes most buyers up to six months to secure a property that is right for them.

Originally published as Real estate agents’ tricks exposed

Thursday 9 July 2015

Simple tips for an interior makeover this winter


The change of seasons can be the perfect time to give your home a makeover. The good news is that you don’t need to spend an exorbitant amount of money redecorating your home. Below are some helpful tips to help you decorate for the cooler months.

Rearrange
Simply rearranging your furniture can give your room an instant lift. Winter can be a great time to create cosy nooks and personal spaces. But before you start moving couches, tables and other furniture, take some time to plan where you will shift the furniture to.

Reorganise
As time passes it can be amazing how many objects don’t return to their proper place. It can even be the new possessions that we accumulate but don’t really have a place to store them. Look over the rooms of your house, and see what really needs to be out on display and what you might be able to store away.

Accessorise
Add some pops of colour into a neutral pallete with various accessories. Throw cushions, picture frames or rugs can add a burst of colour as well as interesting focal points in a room. Alternatively, you can find inexpensive prints from homeware stores that can add colour and style to plain walls.

Use light
The winter months offer the least amount of natural light. One way to counter this is to make use of lamps. If you are able to use warm yellow light producing bulbs, they can bring a feeling of warmth as well as light. Lamps also work as a great way to add interest to a room and act as a focal point.

 

GARDENING IDEAS FOR SMALL SPACES


If you live in a unit, apartment or townhouse, creating an enjoyable garden may feel out of your reach. However there are many ways to indulge your green thumb and enjoy the beauty of a garden, even if you don’t have a large backyard. Below are some tips to help you build an attractive garden in a small space.
Plan your layout
When planning a garden, draw a layout as your first step. This can help you visualise the end product and ensure that your design will be effective. When working with small spaces be careful to not overcrowd the area. Try to incorporate a focal point that will draw attention and interest. This can help to create the feeling that the area is larger than it actually is.
Consider using vertical gardens
Vertical gardens are an effective way to bring colour and greenery into a balcony or patio without taking up a large amount of floor space. This option can be useful in creating a large blanket of greenery as a backdrop for a feature plant or ornament.
Grow an edible garden
A small garden doesn’t mean you can’t enjoy home grown produce. There are many options that will thrive in small spaces given the right environment. An appropriate amount of sunlight and water is important. Growing potted herbs can be a great way to start, but don’t feel constrained – keep on expanding the varieties you plant. For extra motivation, try to grow things that you like to eat.