Buying a house is terrifying. House hunting is difficult in any market but in the current market it’s basically the quick and the dead.
Once you find the right property, you have to perform your due diligence with lightning speed. We all know of stories of people being 99% the way there, another buyer swoops at the very last minute and the property is lost.
The one part of the process that often scuttles a sale is the building and pest inspection. The elation of finding the right home is often met with the horror of a written fault report on your dream home. Inspection reports even on the best homes never read well.
Building inspectors have a pretty tough gig and the legal exposure for them is frightening. In approximately one hour they have to determine whether a building is structurally sound, if termites are present and if there are going to be any major issues in the future. If you read a report these days, it is basically one very big disclaimer with a few comments thrown in. In many cases the reports are useless. Recently my wife and I bought a house and we didn’t even read the report; I rang the inspector (who I know and trust) and asked ‘if you were me, would you buy it?’ he said ‘yes’. SOLD!
Every house in the country has faults that a building inspector will find. Common things we see are rising damp in walls, inadequate sub-floor ventilation, past termite damage, settlement cracks etc. Often people attempt to re-negotiate an agreed sale price because of these findings, which in my opinion is simply unreasonable.
My advice would be that the things you really need to look out for are major issues like structural problems, live pests and safety hazards. These are the things that can cost a small fortune to address and by addressing them you are not adding value you are simply restoring it. This needs to be factored into the price and I believe it’s reasonable to expect that.
If you are looking for the perfect home, you won’t find it. The best thing you can do is get a good inspector that you can trust and one that will talk to you. We are happy to recommend some – and we do not receive any kickbacks from any of them.
Tuesday, 25 February 2014
Property management is a very tough business…hot water systems seem to know the worst possible time to explode and tenants seem to vacate just when everything seems to be going like clockwork.
Everybody has a story about a bad experience with a property manager. Whether it’s a neglected tenant or a landlord that is shocked to find their property hasn’t been cared for. It’s never-ending. Now I understand why this is, and the answer is simple – too many properties and not enough property managers.
About 18 months ago we decided to take the leap from being a busy ‘sales only’ office and hired a superb property manager to start a brand new rent roll. Thankfully – and through a lot of hard work – our rent roll has grown fast, and we now have a property management department we are proud of.
The typical agency model however, of having hundreds of properties on a rent roll and one or two people managing it is plain madness. Presiding over a rent roll is like being in air traffic control – lots of things happening all at once and if you miss something it can turn into an absolute disaster. Of course you have to make a profit, but when things go wrong in this business they can go very wrong. And this should be considered when you go to lease your property out.
If you are looking for an investment property or already have one, then you need to be aware of the structure of the business that is managing the property on your behalf. Before appointing a property manager you should ask the agent for references from current landlords. In fact, the best way to do this is to ask for a list of rental properties and select two or three at random.
I’m surprised by how many people tell me they aren’t happy with their property manager but don’t want to move the management because it may upset the tenant! If you are not happy then your tenant is probably unhappy as well.
If you cant find a good property manager, manage it yourself and if you cant manage it yourself make sure you find a good property manager.
Thursday, 16 January 2014
Recently whilst enjoying a coffee with friends I was asked ‘what is the most important factor when it comes to real estate?’ The first thing that comes to mind is of course location. In a city with very limited land available, that’s a given.
Apart from location there is one other factor think makes an enormous difference to a property’s value – and that is privacy. Put simply, we all want to live near everything but we don’t want it to feel like we do. Location and privacy are inextricably linked; it’s often the properties in the most popular location that have the greatest privacy challenges.
In all my years of selling property, I have to say that one of the most challenging obstacles to overcome when selling a home is when the property is overlooked by another property (or several others). I remember marketing a beautiful multi-million dollar home in Mosman a few years ago that was heavily overlooked by units and when I took the buyers out to the back garden there were people on a balcony listening to music and smoking. This resulted in the buyers asking the dreaded real estate question ‘do you have anything else?’
The good news is that if you are thinking of selling, renting or renovating and you have some privacy concerns, there are all sorts of things you can do to counter the issue. In gardens, the obvious answer is landscaping – a nice hedge can instantly change the atmosphere of your outdoor area. In apartments, blinds or frosted glass can keep the natural light coming in and keep peering eyes out.
The key to ensuring you achieve the greatest value for your property is making sure that it appeals to as many potential buyers as possible – and a major part of this is maximising the feeling of privacy and seclusion.