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Beware of High-Rise Apartments & House and Land Packages

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NEWS

Best Investment Suburbs for 2019

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THINKING ABOUT BUYING? LET’S HAVE A CHAT.

 

[email protected]

03 9531 1670

The post BECKETT MARKET REVIEW – JAN19 appeared first on Beckett Property.

Apartment supply and investments are on the rise. In fact, the number of apartment development approvals is smashing economist expectations and this doesn’t look to be slowing. With this increase in supply and the media stating that apartment prices are falling, can this be seen as a risky investment?

At Beckett Property, minimising risk and maxismising opportunity in a residential apartment is largely about identifying “A-Grade” qualities. Below is an overview of 6 critical elements to consider before investing in an apartment.

1. Apartment Type

Boutique blocks with less than 20 apartments usually offer the highest capital growth potential. This is due to:

• The individual land content being higher per owner.
• Owners Corporation fees are lower (as there aren’t any gyms, pools or elevators to service).
• More scarcity.
• Less turnover or sales in the building.
• Higher percentage of owner occupiers as opposed to tenants which creates a stronger community.

Art Deco and post war era buildings create the highest demand due to their charm, size, scarcity, construction quality and location. A lot of these buildings are located in nice residential streetscapes and are usually only two or three levels in height. High density buildings are almost always located on main roads or in growth zones. They are also usually surrounded by similar buildings with risk of being built-out by another upcoming development. New apartment blocks have some advantages like higher tax depreciation, communal rooftops and modern amenities but these come at a high price through Owners Corporation fees.

2. Apartment Features

This involves the structure, size and feel of the apartment. Firstly, the floor plan must be symmetrical and ideally flow to an al fresco entertaining area met by a courtyard, terrace or balcony. Ceiling heights are important as they dramatically contribute to the feel and size. Bedroom sizes should be at least 3 x  3 metres and require storage or built in wardrobes. Kitchens can be either open-plan or separate to the dining area depending on your personal taste and requirements surrounding this. Bathroom sizes are important with separate toilets and ensuite being a huge advantage. Privacy should also be considered as no one likes a neighbour peeking into your domain.

3. Light

Natural light is a huge factor and will make or break the desirability of an apartment. North and western orientation are most abundant. South and eastern orientation can suffice but it will depend on the building’s position and surrounds. Windows play a huge role, especially when it comes to bedrooms and bathrooms.

4. Acoustics

The acoustics of the building and apartment can often be an afterthought but should be considered. It is essential to assess the distance from the stairwell, basement car park or elevator to your apartment. Once again, your surroundings are important as you need to ensure there are no commercial or industrial buildings nearby that will create a lot of noise.

5. Parking

Off street parking in a non-negotiable when it comes to investing in an apartment. It doesn’t matter whether it is an open space, car port, lock up garage or a basement, do not buy an apartment without one. Car stackers are becoming more frequent in modern buildings but be weary as they can be a hassle and risk. Additional visitor car parks are also appealing and handy.

6. Location, location, location!

This is a deal breaker. Your apartment investment must be situated within 1.5km to your nearest train station, bus, tram, shopping centre, amenities and lifestyle. Both owner-occupiers and tenants require this convenience and apartments that are located too far from these amenities will struggle to sell, rent and will have limited capital growth.

Apartments offer many benefits including lower price points, secure living and minimal maintenance. It is crucial to vet your apartment investment with an eagle eye to ensure you don’t compromise your lifestyle or lose money with your investment.

If you would like to discuss the potential to invest in an apartment in Melbourne or seek the help of an expert Property Advocate, please speak to one of our trusted Buyers Advocates at Beckett Property. We will assist you with the successful acquisition of your next property.

The post 6 key elements that make a good apartment investment appeared first on Beckett Property.

This guide provides first home buyers with a strategy on how to buy a house in Melbourne. This includes answering important questions such as:

• What is my budget? How much can I borrow?
• What kind of loan should is best for my situation?
• How should I structure it so that my property is protected?
• Do I get any concessions for buying a property?
• What are the key factors I need to consider before starting my search?
• How do I conduct my search and research?
• What questions should I ask a real estate agent when buying a property?
• How should I need to prepare before going to auction?

Budget and Borrowing Money

Setting a budget and knowing how much you can borrow is the first critical step in the process for first home buyers. Once you know this, you can then understand what areas you can look in that will fit your budget.

Usually you want to buy a property with no more than 80% LVR (Loan to Value Ratio), which means that you only want to borrow a maximum of 80% of the value of the property. Hence the first question is how much deposit do you have. If you have a $125,000 deposit, then this is 20% of $625,000 so that is the budget that you want to set on a property. Similarly is your deposit is $150,000 then your budget could stretch to $750,000. Given this, you must make a decision as to whether you have enough budget to buy in the area you want now. If you don’t it may be worth saving to have enough deposit to get the budget you need to buy a house in the area that you want.

If you have enough deposit to secure the budget you need on an 80% or less LVR, then next question is do you have enough income to prove that you can comfortably service the loan. This question is best answered by a mortgage broker. We usually a mortgage broker more than a bank as they have access to a number of different outlets and can provide the best loan option for your situation.

If you can have enough deposit and income to service the loan and you are serious about buying, the next step is to secure a pre-approval which is when you receive a conditional approval on your loan. The last thing you want is to find the house which you think is within your budget, but get declined for a home loan right before the property goes to auction.

Home Loan Selection

There are a number of types of loans that first home buyers can get for your property which includes interest only, principal plus interest, then these is floating or fixed interest rates. There have been some recent changes made which make it more attractive for first home buyers to go for a principal plus interest loan. Also considering a fixed loan for a period of time helps to ensure that you know what the interest rates will be next month.

As you set up a mortgage you also want to consider setting up an offset account to minimize the interest paid.

Asset Protection

May people investing in property should consider asset protection as you never know what will happen in life. In saying that, for first home buyers, your principal place of residence should be in your own name to avoid capital gains when you sell (assuming that you will be living in it for a year or more). If you are buying with a partner, you should consider establishing a joint venture which is a formal agreement which confirms what percentage of the property each of you earns and what your respective financial commitments are to paying off the property. As much as you expect it all to go smoothly, each party wants to protect themselves and ensure that they have thought through the specifics of how this will work.

Concessions or First Home Buyers

As a first home buyer, depending on what your budget is you can get concessions on stamp duty and of course you are not exposed to capital gains if you decide to sell your first home as long as you live in it for a year a more. There are additional first home owners grant which you can apply for if you buy or build a new home. However this does not usually apply to the majority of our clients.

Stamp duty concessions for First Home Buyers

Stamp Duty can be as high as 6% which is a significant amount of the property value. Recent laws introduced has meant that first home buyers can receive concessions on stamp duty depending on what they buy their property for. These concessions exist for properties purchased for a value of up to $750,000. You can see examples of these concessions at different levels of investment below:

Property Search

We wrote another article on how to buy a property in a hot market. In this article, we outline the key aspects of a scope which includes elements of the property, position and price. Once you have defined this and your budget, you can then begin the search. Realestate.com.au is the best resource in the market although we also use Domain.com.au. We have paid subscriptions to platforms which provide the most up to date sales and as a member of the REIV we also get access to up to date market data on number of key market indicators such as clearance rates and median house prices by suburb.

When you have narrowed down the target areas you want to search in, you can call the Real Estate Agents that are representing the vendor.

• Why is the vendor selling
• How long has it been on the market
• Would the sellers consider an offer pre auction
• What is included in the sale in addition to the property?
• How many other people have expressed interest in the property?

First home buyers are in a better position to negotiate if it is a distressed sale or if there is less competition. Make sure you develop a relationship with the agent to get them on side. Sometimes this can make all the difference.

Property Auction

• Pre-approved Loan: As mentioned earlier, you want to make sure that you have this in place before going to auction.
• Choose the right time to bid – If you have a good budget for the property, wait until others have bid to see what it starts to peter out at before coming in with a confident bid. If you don’t have a significant budget, you might consider setting the pace with a confident bid to start with.
• Control the pace of the bidding with confident bids– If the bidding is in $5k increments, slow it down, it it’s in $500 increments and you have budget, change it up. Always keep the other parties guessing and try to avoid revealing your hand.
• Do your research to determine what you value the property at: Look at comparable sales and what similar houses have sold for to get a realistic view on the value of the property (this is where a Buyers Advocate in Melbourne can really help). Knowing what the property is worth ensures that you don’t get caught up in a bidding war if other people are overvaluing the property.

Final Words

Before purchasing any house, we recommened first home buyers invest in a pest and building inspection to ensure the house is structurally sound. Also make sure that you have read through the sale of contract before making any bids. Take into account any additional costs associated with purchasing or moving into the property. Remember that a Buyer’s Advocate is also an investment and will help you make a confident decision on the property and ensures you are making the right decisions and employing the right strategies for searching, bidding and acquiring properties.

If you are interested in a free consultation, please call +61-3-9531-1670 to speak to one of our expert agents.

The post How to Buy a House – A Guide for First Home Buyers appeared first on Beckett Property.

Here are the ABCs of what you need to consider before buying a house in Melbourne.

A – Area code

The first important question that you need to think about is where do you see yourself living the next chapter of your life? Are you someone who wants to live amongst the hustle of the city life or would you prefer the calm and homeliness of the suburbs?  You will need to consider the proximity of your home to your workplace, your extended family and your children’s place of education. It is also important to look at the distance to public transport, hospitals, shops and amenities as well as supermarkets.

B – Property Budget

One of the most important aspects of buying a house you need to consider is your budget. You need to set your ideal and absolute maximum budget. Quite often you may have a picture of what your dream house should look like, in reality what you can afford is a completely different story. You are about to make a life-changing decision so be realistic about what you can actually afford. Once you have chosen the location that you are thinking of buying in,  have a look at the median prices in the area so you are confident that the area you have chosen is within your budget.

C- Costs of buying a house in Melbourne

When buying a house in Melbourne, there are a number of costs that need to be considered. The largest of these is the deposit which is usually a minimum of 20% of the purchase price. It is possible to purchase a property with less than 20% deposit, however this would require mortgage insurance which is an additional cost to consider. Other buying costs includes stamp duty, agent fees and settlement fees.

Stamp Duty is a one-off payment of state tax which is made on all home purchases, based on the property price, location and type of home loan you have. Agent fees if you are using a Buyers Advocate to purchase your property and settlement fees related to lawyer fees involved in settling the deal.

Once the property is purchased, there will also be a cost for moving all your belongings to the new property. Get quotes from a few different moving companies, or hire a truck and ask your friends to help you with your big move. You will also need to add council rates and bodycorp fees into your budget depending on the type of property you are purchasing. Bodycorp fees are usually only relevant if you are buying an apartment or unit. Ask what these are before purchasing the property so you can factor this in.

D – Do your research

Remember to research well before buying a house in Melbourne. Ask around and make sure you research the area and look at comparable sales for the houses you have shortlisted. Don’t always take the seling agents word on how much they think it will go for and do your due diligence to find out such aspects as the vendor’s motivations for selling. This will help you set the right value for the property and with your negotiation.

E – Expert opinion

Specialists suggest that first home buyers should obtain legal advice prior to signing the contract of sale. Your contract of sale (section 32) contains everything that you would need to know about your property so having a lawyer go over the documents is essential. These are important points that you would want to know BEFORE you sign the contract.

F – Fault inspections

Experts say that up to 30% of homes that are inspected tend to have serious issues that include, structural faults, cracks in the walls, plumbing and electrical issues and even mould and rising dampness. Make sure when you are choosing your home that you conduct both building and pests inspections. Find out the costs that you would incur to repair these faults before you even consider making an offer. It is better to identify any faults before making an offer.

G – Getting approval for loans

Once you have identified your budget, the next thing that you need to determine is how much you can borrow. The amount that you can borrow will vary from lender to lender and nowadays many home loan companies also offer online calculators that allow you to calculate your borrowing limit. If you are buying a house in Melbourne and you’re looking at home loans, you will also need to learn about the different types available and range of interest rates on offer.

 H – How will you be buying a house – auction or private sale

There are many methods of sale of property that are available to those buying a house in Melbourne. Majority of properties go to auction, however there are still agents that do use the private sale method. Your first step is to determine the method of sale for your shortlisted houses so that you can prepare the relevant property buying strategy.

If your property is not going to auction you are definitely saving yourself from the stress of auction day – but this leaves you faced with the overwhelming question of “How much do I offer?” In the case that you are buying your house via private sale make sure that it is clear to the vendor and selling agent that you are serious for the right price, however do not be overenthusiastic about it. Set a low value on the property and back that value up based on the results from your inspections and other comparable sales in the area.

Buying a house can be a stressful and timely process. You can do the research to make sure you are as prepared as you can be, or you can contact an experienced advocate to help manage this process for you and be confident that the decision you make is the right one for your situation. Speak to the team at Beckett Property to obtain a free consultation today.

The post The ABCs of buying a house in Melbourne appeared first on Beckett Property.

So what is a Buyers Agent?

A Buyers Agent is an agent that represents the buyer in their property search. At Beckett Property we work with 3 types of buyers which is a person looking for a home, a property investor or a property developer. The Buyers Advocate helps the buyer to conduct the property search, evaluation and negotiation to purchase a property. Furthermore, they take the stress and emotion out of buying a property as it is their business. They are knowledgeable in the buying process and can help to quickly ascertain what a property’s true value is. Finally, a Buyers Agent has negotiation experience to secure the best price for they buyer.

How does a Buyers Agent help a Property Buyer?

A Buyers Agent guides their clients in every step of the property-buying process. This includes:

• Understanding the buyer’s requirements
• Conducting the property search and identifying the best properties and location for their budget.
• Helping buyers to assess the quality and risk profile of the property.
• Manage the acquisition process which includes bidding at the auction or negotiating off market deals

9 reasons why property buyers should use a Buyers Agent

1) Experience and knowledge

Buyers Agents buy houses as a profession, while people outside of the industry may only buy houses a few times in their life. They can quickly establish what a property’s worth and how the market is trending. This will help buyers to understand whether a property is right for them and is likely to achieve capital growth.

2) Speed into Property Market

With knowledge comes efficiency and at Beckett Property, our average search time before we buy a property is 44 days. This process for an un-experienced buyer can take months and still not yield results. Recently we met with a client who was searching for 11 months and could not secure anything. Once Beckett started working with them, we found them a property they loved within 35 days. This is mainly down to having an established process to search and select the right places.

3) Helping Property Buyers secure the property at the best price

Buyers Agents are experienced negotiators. They know what questions to ask, how to bid at the auction and what the realistic value of the property is. They negotiate with confidence having done it so many times before and without any emotional attachment to the property which means it’s easier for them to walk away if the price is not right.

4)  Access to Off-Market properties

Many properties are sold off-market for a number of reasons such as the vendor wanting a swift sale. A good Buyers Agent will have relationships with a range of real estate agents meaning they are often the first to be informed about the latest off market properties that become available.

There is usually less competition for an off-market property and if the seller does want a quick sale, then you have more negotiation power. A Buyers Agent will know how to approach them to ensure that you are the best position to negotiate.

5)  Not emotionally connected with the purchase

As mentioned earlier, many property buyers can blow their budget as they become emotionally attached to the property. Since the Buyers Agent does not have that same attachment, they can help their clients make a better, more informed decision. This includes sticking to a budget, being confident at the auction and knowing when to back down if the competition is hot.

6) Save time and build confidence

Many of us are busy with our day to day lives so finding the time to research and purchase a property can be difficult. Additionally, this can become stressful if your searches do not lead to anything or you become nervous and uncertain at times throughout the process. Working with a Buyers Agent will take the guesswork out of buying while saving time and stress on the property buying process. In addition, they will help to ensure buyers are confident with their purchase.

7) Licensed in Real Estate

Having experience in buying properties is a requirement for any property buyer looking to work with a Buyers Agent. In addition, we recommend that people work with Agents that are fully licensed. Having a real estate license is not a requirement by law and many do operate without one. Those that do have the right qualifications will have knowledge of the regulatory requirements and legislation to ensure the buyer is fully protected when purchasing a property.

8). Their interests are aligned with the buyer

A Real Estate Agent works for the seller so their objective is to sell the property for the highest possible price. A Buyers Agent works for the buyer so their interests are aligned with the buyer’s needs and to purchase the right property at the right price.

9). Convenient for interstate and foreign buyers

To buy a property, you need to be in the market and viewing the properties before bidding. If you are not in market, working with a Buyers Agent can help to be your eyes and ears on the ground. They can shortlist a selection of properties so that you can fly in at one time to go through them all in one day.

Considering buying property in Melbourne?

If you are considering buying property in Melbourne, consider – Beckett Property Buyers Advocates; to provide you with the sound advice you need to make confident decisions. For a free consultation provide your details below and one of our expert advisors will be in touch.

The post Why use a Buyers Agent in Melbourne appeared first on Beckett Property.

Beckett Property Buyers Advocate Director Thomas Georgiou bids for a first home in St Kilda East for their client and shares a few tips with the video below.

CONSIDERING BUYING PROPERTY IN MELBOURNE?

Interested in buying your first home? Take your first step to getting into the market and get in touch with the Beckett Property Buyers Advocate for a free consultation.

The post How to bid at an Auction for First Home Buyers appeared first on Beckett Property.

Hot markets favour sellers as low stock levels and desperate buyers combine into the perfect storm of high sale prices. Cool markets favour buyers as the abundance of stock combined with limited competition creates an abundance of choice. In an ideal world, you buy in a low market and sell in a hot market, but life and circumstances don’t normally favour this.

Assuming you’re in the market right now while it is hot you need to work with what tools you have available to you to ensure you get the property you require. The team at Beckett Property has developed a guide to help home buyers buy property in a hot market based on their experience over the last 14 years.  The guide is broken down into key areas which you can use as a framework when buying a home.

1) The Plan:

Before beginning your search, formulate a plan which incorporates the 3 P’s of property which are as follows:

• Price – More often than not, the dream house we want and the house we can afford are two different ideals. Be objective and realistic about your budget and what you can afford. Avoid looking at properties that sit in the upper echelons of your limit because naturally you’ll be disappointed when you go to auction and the property goes well beyond the quote range
• Property – Identify the features you want in a property including orientation, size, flow, layout number of rooms and so. Put these into two columns, one are your “must haves” and “like to haves” in two separate columns. This will help you to quickly identify what you are willing to compromise on if you need to choose.
• Position – What areas are within your consideration? What are the pros and cons of each. Are these areas within your budget? You can see the median property prices by suburb here

2) The Search

There are a number of resources that you can use to find property listings. Realestate.com.au is the largest coverage of properties with Domain also representing a significant number of listings. If you work with a buyer’s advocate, they may have a number of off market listings which will be appealing as there won’t be as much competition for this property.

When searching for a property, refer to your plan and shortlist properties that meet the majority of requirements you have set out in your plan. If you are finding that not many properties are matching your plan, your plan may be unrealistic and you may need to reconsider what further aspects you are willing to compromise on.

3) Assessing properties

When assessing a property, consider the following:

• Ask questions about why the property is for sale – Vendors under duress such as poor financial circumstances, divorce or a death put certain pressures on the vendor to accept less than ideal offers. Whilst the agent is not at liberty to disclose personal information around the circumstances surrounding the sale asking the right questions may illuminate some useful information which can ultimately drive your purchase approach.
• Assess the competition  – how many people have viewed the place? How many are expected to turn up to the auction? How long has it been on the market for? Answering questions like this will help to determine where the property is likely to end up price wise. Other indicators that will help you to identify which parties are interested in the property would be behaviour such as repeat inspections and relevant documents (eg Section 32/Contract Of Sale).
• Beware of properties that seem to be priced quite cheaply – it’s typically for a reason. Potentially look at: block size/shape, orientation, Is it on a main road, distance from public transport, commission housing nearby, flood risk, zoning etc.
• Are there multiple properties that fit the same brief? If so this will dilute the buyer pool which works in your favour.

 4) Putting in an offer:

Depending on type of sale there’s multiple approaches. Typically, the majority of properties go to auction in this market given the demand, however you can also purchase a property via a private sale. If you are serious about the property you can trigger a sale before auction by negotiating with the vendor via their agent.

Triggering a sale before auction:                                 

• Go in with a realistic offer. An offer that is obviously low is unlikely to guage any interest and may work against you. This is a sellers’ market not a buyers one remember that.
• Timing is essential. Putting an offer in too early into a campaign may be rejected due to the agent/vendor feeling they’ve got a better chance to run it to auction. Putting an offer an offer late into the campaign may also be rejected due to the vendor feeling they may have a better chance letting it run the entirety of the campaign. In both instances the offer must be a decent so they take it seriously.
• Make your offer subject to a deadline (24 hours for example) to ensure it’s taken seriously and that the vendor cannot revisit the offer should nothing higher come up.
• Make your offer unconditional so that the vendor knows you mean business and that you are serious.

Bidding at an auction:

Here are some of the effective strategies we use when bidding at an auction.

• First and foremost, understand your limit and stick to it. Do not get carried away during the auction and go beyond your budget.
• Bid confidently and project your voice.
• Stand where you can be seen so you can assess the competition.
• Counter bid immediately. This will ensure that the other person feels you are in control and that you have the deepest pockets there.
• Do not fidget. This shows signs of nervousness and that you don’t have the money.
• Be aggressive, but not reckless.
• Large, opening bids are often good to cut the emotion out of the auction and ensure some of the hopefuls get cut out early thereby reducing your competition during the later stages of the auction.
• Read the momentum of the auction, look at your competition and gauge if they look nervous as the bidding rises or confident.

Negotiating a private sale

If you are negotiating with an agent in a private sale, consider the following:

• Be polite, courteous and clear with your dealings with the agent, they’re the conduit between yourself and the seller and it’s in their best interest to see the sale go through. Keep them on your side.
• If you present a low offer be prepared to justify it. Does it have to do with the condition of the property?

Know the market beforehand and understand what other properties are transacting for. This helps inform your offer.

These are the basic fundamentals of sourcing and buying a property. Ultimately, your success is linked to how much time you invest in assessing the market and your competition, removing your emotions when negotiating a private sale or when you are bidding at an auction and sticking to your plan.

Often people don’t have the knowledge or time to invest in assessing the market and researching all the properties using the framework above. Plus, it’s easy to fall into the trap of making decisions based on emotions rather than based on a well thought out plan. This is where a buyer’s advocate like Beckett Property can add significant value. Speaking to someone with years of experience to identify property values with access to data that is not available to the general public helps us to find what is within our reach very quickly. Combine this with a detailed property assessment and strategic approach to acquisition means that a good buyer’s advocate is an investment well worth considering.

Considering buying a home?

If you are considering buying a property and would like a free consultation to make sure you are buying the best property for your budget at the best time, please provide your details below and one of our advisors will be in touch.

The post How to buy a Melbourne property in a hot market appeared first on Beckett Property.

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