posted by Lyn Rowe at
12:27
0 Comments
Wednesday, July 30, 2008
Thursday, July 24, 2008
Top 10 mistakes of first time property investors
1. Falling in love with the property
You need to stop thinking like a homeowner and start thinking like a business owner. Yes, you need to like the property; a question you should ask is could you live in it yourself? If you can, then it's likely someone else can and so the property is probably rentable.
2. Not checking the facts
Due diligence is more than just an inspection of the property, it's also a thorough investigation of your area's rental market -- vacancy rates, average rents, average age of the rental stock, zoning, government regulations.
3. Forgetting the home improvement rule
It will always take three times the money and twice as long as you first estimate to get a property ready to rent. Allow for additional funds to pay the mortgage whilst the property is vacant, obtain a building inspection by a qualified building inspector.
4. No cash reserves
A lack of cash reserves puts unnecessary pressure on you to do substandard repairs, accept substandard tenants or make other poor decisions because of a fear of vacancy. When you have a sufficient cash reserve, you act rationally.
5. Doing it all yourself
New investors often attempt to manage it themselves. That approach can end up costing more in the long run. Find an accountant you can talk to, a lender who will work with you and a reputable real estate agent to find a property in your price bracket.
When selecting renters, make them fill out an application, and check their credit, employment and rental history before you take them on. Better still, find a reputable real estate agent and give them the job of managing the property and let your accountant look after the legitimate costs of running the property at tax time.
6. Investing blind
Real estate investment risk is directly proportional to knowledge. The more knowledge of investing techniques, financing, acquisition and negotiating, the less risky your investments will be.
7. Investing long-distance
The only time that you would invest interstate is if you have done your due diligence and researched the market that you intend purchasing in and also have a good real estate agent to look after and manage your property in your absence.
8. Paying too much
If you're embarrassed to make a low-ball offer to a seller, don't invest in real estate. You never know a seller's circumstances and an offer you think will be unacceptable may be very acceptable to the seller.
When signing a contract of sale ensure it has a subject to finance clause. This gives you a degree of protection as your lender will value the property before offering you a new loan, from this you will then know the true value of the property.
9. Not studying the competition
Why does the guy across the street rent his property the same day someone moves out and yours sits vacant for months? He might not be very picky about whom he rents to, but he also might have lower rents or have gone to extra effort to present the property.
10. Being underinsured
Insurance on rental property goes beyond insuring the building against fire or natural disaster. You need to look at comprehensive landlord insurance. There are too many horror stories about destroyed rental properties to not take out this type of insurance. Most major insurance companies now offer this product, which will not only cover you for damage to the property but also loss of rent.
Source: Jennifer Schelbert MFAA http://www.mrsmortgage.com.au
You need to stop thinking like a homeowner and start thinking like a business owner. Yes, you need to like the property; a question you should ask is could you live in it yourself? If you can, then it's likely someone else can and so the property is probably rentable.
2. Not checking the facts
Due diligence is more than just an inspection of the property, it's also a thorough investigation of your area's rental market -- vacancy rates, average rents, average age of the rental stock, zoning, government regulations.
3. Forgetting the home improvement rule
It will always take three times the money and twice as long as you first estimate to get a property ready to rent. Allow for additional funds to pay the mortgage whilst the property is vacant, obtain a building inspection by a qualified building inspector.
4. No cash reserves
A lack of cash reserves puts unnecessary pressure on you to do substandard repairs, accept substandard tenants or make other poor decisions because of a fear of vacancy. When you have a sufficient cash reserve, you act rationally.
5. Doing it all yourself
New investors often attempt to manage it themselves. That approach can end up costing more in the long run. Find an accountant you can talk to, a lender who will work with you and a reputable real estate agent to find a property in your price bracket.
When selecting renters, make them fill out an application, and check their credit, employment and rental history before you take them on. Better still, find a reputable real estate agent and give them the job of managing the property and let your accountant look after the legitimate costs of running the property at tax time.
6. Investing blind
Real estate investment risk is directly proportional to knowledge. The more knowledge of investing techniques, financing, acquisition and negotiating, the less risky your investments will be.
7. Investing long-distance
The only time that you would invest interstate is if you have done your due diligence and researched the market that you intend purchasing in and also have a good real estate agent to look after and manage your property in your absence.
8. Paying too much
If you're embarrassed to make a low-ball offer to a seller, don't invest in real estate. You never know a seller's circumstances and an offer you think will be unacceptable may be very acceptable to the seller.
When signing a contract of sale ensure it has a subject to finance clause. This gives you a degree of protection as your lender will value the property before offering you a new loan, from this you will then know the true value of the property.
9. Not studying the competition
Why does the guy across the street rent his property the same day someone moves out and yours sits vacant for months? He might not be very picky about whom he rents to, but he also might have lower rents or have gone to extra effort to present the property.
10. Being underinsured
Insurance on rental property goes beyond insuring the building against fire or natural disaster. You need to look at comprehensive landlord insurance. There are too many horror stories about destroyed rental properties to not take out this type of insurance. Most major insurance companies now offer this product, which will not only cover you for damage to the property but also loss of rent.
Source: Jennifer Schelbert MFAA http://www.mrsmortgage.com.au
Labels: First home buyer
posted by Lyn Rowe at
11:38
1 Comments
Thursday, July 3, 2008
Sales from June 2007 - June 2008
You will notice I have not put the house number of the properties I have sold as I am not too sure about privacy regulations. I know we can’t use the names, but not everyone wants the price of their homes put onto the internet, which is why the Sold section in realestate.com does not help anyone much. However, if you would like a comparison done between any of the homes I have sold and your current home, please just call me on 3426 8309 or 0411664490 and I will be happy to describe the property to you.
Labels: sales
posted by Lyn Rowe at
12:13
0 Comments
About Me
- Name: Lyn Rowe
I commenced in real estate in 1995 and stayed two years, mainly because my daughter Natalie was quite young at the time and a real estate career is very demanding, especially time wise. I then went off and did lots of interesting things before returning to real estate in 2002, so have plenty of miles on the clock, both in experience and age.( I did think about having a “glamour” photo done for this page, but figured there was no point if no one recognized me!) and like to think that real estate buying and selling is all about life skills and the University of “hard knocks” as my son always says when someone asks what University he attended. I am a fairly relaxed person, although the staff may disagree with that, work hard though and believe the main ingredient in successful results for all those whether selling or buying, is communication and the desire to work together to achieve the desired outcome. It is not rocket science and it does not need all the “hypo” element spruiking about making a million dollars in five minutes. Success will be achieved by studying the market, presenting your property well and having an agent who knows what you want to achieve.
Links
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