Tuesday, June 5, 2012
Renovation explosion
The trend to renovate has accelerated greatly in the last decade, the value now accounting for 40% of national residential investment.
Government taxes & costs of moving are forcing this trend by adding on 6% to the value of a property, whilst gov`t taxes & charges add on up to 40% to the cost of a new build.
Kitchens & bathrooms make the biggest impact on buyers.
The HIA found the average cost last year to renovate a kitchen was $20,000, a bathroom about $15,000.
Matusik`s rule of thumb to avoid over-capitalising is to cap spending at about 5% of the property`s value for kitchens, 2% for each bathroom, & 3% for landscaping.
If renovating primarily to sell,consider who is the most likely buyer
Knowing your target market will help to direct the renovation focus to areas that will appeal to potential buyers.
For instance, swimming pools have limited appeal to some because of the maintenance factor.
A property aimed at investors for rental return would benefit from bedrooms with their own bathrooms separated by a central living space. Spend only to ensure an achievable sale price comparable to your area.
Do your homework, call in your local real estate expert for advice.
Over-capitalising occurs when a property has been improved beyond its real estate value.
Michael Matusik, highly respected property analyst, advises that ideally the value of the dwelling should be between 1.5 & two times the value of the land on which it sits
Monday, June 4, 2012
Recent home buyers to find equity magic has vanished
THE sluggish housing market has sparked predictions that the latest generation of home owners will be unable to rely on their home as a key source of higher wealth, as many baby boomers did.
Instead, analysts say people who joined the housing market in the last few years are unlikely to experience the ''magic money machine'' effect of bumper rises in the equity in their homes.
In the late 1990s and early 2000s, house prices more than doubled, a trend that benefited even highly indebted owners. Rising equity - the proportion of the house's value belonging to the owner, rather than the bank - was credited with boosting consumer confidence and spending.
However, analysts say the trend is unlikely to return, with Sydney house prices down 2.6 per cent in the past year and the Organisation for Economic Co-operation and Development this week warning of further risks nationally. The head of research at RP Data, Tim Lawless, said home owners who bought in the last four years would find it much harder to build up equity. December figures from RP Data show 6.4 per cent of home owners had seen the value of their home fall to less than they paid for it. This proportion is likely to increase after recent price falls.
''Realistically, anybody looking to build up wealth and equity in their property needs to have a long-term view. They're not going to be accumulating equity in their property in the current conditions, or over the next couple of years, very quickly,'' Mr Lawless said.
A consultant, Martin North, said his surveys of consumers had found those who bought in the last four years - about a third of home owners - had received little or no capital growth.
''Property was a magic money machine for the last 20 years,'' Mr North said.
''You basically went on at the start with a high mortgage, paid it down, maybe traded up a couple of times, and you ended up with a very significant pool of equity.
''I don't think we're going to see that over the next five to 10 years … which means there is a generation now who won't get the sort of returns from their properties that they were expecting to get.''
Home owners aged between 25 and 34 have the highest proportion of debt to assets, at 63 per cent, statistics from the Reserve Bank show.
However, households are also paying down their mortgages at the fastest pace in years, and most borrowers are making more than the minimum monthly repayment.
This conservatism comes amid predictions house prices are likely to remain subdued. The OECD this week said the high dollar was ''generating substantial uncertainties that could weigh on employment, confidence and growth, with potential negative spillovers on house prices''.
Christopher Joye, an executive director of Yellow Brick Road Funds Management, predicted that over the next 10 years, house price growth would be about half what it had been in recent decades.
''For the last 20 years or so house prices grew by nearly 8 per cent a year, however over the last four years they've only grown by 2 per cent per annum,'' Mr Joye said.
''Over the next 10 years we only expect house prices to track household incomes and we project that disposable household income should grow by about 4 to 5 per cent per annum.''
The underselling syndrome
A tough market demands the need for an agent with superior marketing & negotiating skills to get the best price
Unfortunately, the quick route is often selected, agents simply taking to auction, attracting bargain hunters & low buy prices, not realistic market interest, or persuading sellers (often absentee landlords) to list at give-away prices that sell quickly.
Sales results are reflecting this—we are seeing record low prices due to these strategies & prices continue to be driven down.
I can quote numerous instances of sales that are destroying values. For instance, a villa in a quality & modern townhouse complex in Mt. Coolum recently sold for $340,000, the previous resale low was $365,000. I recently sold several for over $400,000.
In my frequent discussions with valuers, they are shaking their heads at the precedents these strategies are delivering & substantially impacting on bank lending behaviour.
Beware the underselling syndrome biggest & best & certain selling strategies are not necessarily the way to go—investigate all options.
The best option may not be a quick sale, but a sale at your best price – this is obtained by local area experts with extensive buyer reach & strong negotiating skills.
Recently I had 5 opens at Mt Coolum attracting a range of buyers & sold two properties on a win-win basis for both buyer & seller
The best option may not be a quick sale, but a sale at your best price – this is obtained by local area experts with extensive buyer reach & strong negotiating skills.
Recently I had 5 opens at Mt Coolum attracting a range of buyers & sold two properties on a win-win basis for both buyer & seller
Thursday, February 10, 2011
Flood impact on Sunshine Coast real estate
Prior to the floods, the overwhelming reports of analysts was for more of the same in 2011, a buyers market, plenty of stock for sale, no price growth, more a leakage downwards.
An ANZ report this month is the latest in a long line to confirm same (articles available via download from my website)
The coast was fortunate to escape the physical damage suffered elsewhere, the real damage being economic, such as devastating the Christmas tourist season.
Matusik is of the belief that ultimately we can look forward to some positive results with an economic boom for years to come, 2011 being a year of two halves.
He sees tourism bouncing right back, once mines are pumped dry we see a continuation of strong coal prices, moisture in the ground assists the next cycle of crops, and the infra-structure spending during the recovery creates strong stimulus.
The coast itself has solid infra-structure capital commitments in place, such as the $1.6b airport upgrade. The next 6 months will be tough, but economically will be much better as we head into spring.
ANZ Report
Home prices are expected to remain flat this year amid signs the slowdown in price gains could become entrenched, says the ANZ Bank.
It estimates house prices will plateau this year, as contending forces of rising interest rates and a strong demand for employees work themselves out in the market.
"Further price weakness is expected over 2011 as the prospect of additional rate rises weigh on both affordability and investor sentiment," said an ANZ senior real estate economist, Ange Montalti.
An ANZ report this month is the latest in a long line to confirm same (articles available via download from my website)
The coast was fortunate to escape the physical damage suffered elsewhere, the real damage being economic, such as devastating the Christmas tourist season.
Matusik is of the belief that ultimately we can look forward to some positive results with an economic boom for years to come, 2011 being a year of two halves.
He sees tourism bouncing right back, once mines are pumped dry we see a continuation of strong coal prices, moisture in the ground assists the next cycle of crops, and the infra-structure spending during the recovery creates strong stimulus.
The coast itself has solid infra-structure capital commitments in place, such as the $1.6b airport upgrade. The next 6 months will be tough, but economically will be much better as we head into spring.
ANZ Report
Home prices are expected to remain flat this year amid signs the slowdown in price gains could become entrenched, says the ANZ Bank.
It estimates house prices will plateau this year, as contending forces of rising interest rates and a strong demand for employees work themselves out in the market.
"Further price weakness is expected over 2011 as the prospect of additional rate rises weigh on both affordability and investor sentiment," said an ANZ senior real estate economist, Ange Montalti.
Thursday, October 14, 2010
How to trim the costs of your renovation
How to Trim the Cost of Your Renovation
– 27 Secrets for Keeping More Money in your
Pocket
Prepared by Hotspace Consultants, which is the brainchild of Jane Eyles‐Bennett - award winning interior designer, serial property investor and master renovator!
www.hotspaceconsultants.com
Renovating can be a fun, rewarding and exhilarating experience. And whether you’ve renovated your own property or properties in the past or just witnessed other people’s experiences,
you’ll know that there are plenty of things to learn and traps to avoid during
the process.
The one area where the majority of people trip up is with their budget.
This could be because they simply plan to do too much to their property and end up over-capitalising. Or because they spend too much money on getting what they
plan on doing, done. Or worse, a combination of both!
As a comprehensive 'to-do'-type checklist (including all the colours, fixtures, fittings and materials to use throughout every part of your renovation), freshlywritten specifically for your property, it’s a sure-fire way to only do to your property what is going to add value.
It’s also the smart way to make sure you only spend what you need to spend on your property - and avoid overcapitalising.
The 27 ‘secrets’ in this report give you some good ideas for reducing your renovation costs for the things you do decide to do to your property – so that you reduce the risk of over-capitalising
and increase your chances of making a profit!
AROUND THE HOUSE
Repair and Re-use
Re-use fixtures and fittings whenever possible. Particularly with low budget reno’s, re-using as much of the existing fixtures and fittings is essential. However, you’ll find this may sometimes be the case on more expensive properties too. Only change and update the ‘must do’ items (just make sure the new colours and finishes will tie in with whatever is remaining in the space). You may need to perform some repair work in order to reuse some fixtures and fittings – so work
out the cost to repair vs. the cost to replace before deciding.
Sell, sell, sell
Consider selling everything and anything you are removing from the property.
What you consider as junk might get you even a few dollars toward your renovation costs. Even if you sell the old oven for$50, the old laundry tub for $30, and the old light fittings for $60, there’s $140 to spend on paint or a plumbing job. Your trash is often someone else’s treasure – and it’ll save you on dumping costs too.
Relocate
There are a few things around a property that you can generally relocate to enhance your renovation. Plants are usually easy to relocate, as are pavers and curtains, light fittings and plenty of other things. You might relocate some of your existing fittings to less important or
prominent parts of the property and install new fittings into the immediately obvious areas (e.g. exterior, kitchen and lounge).
Do your own demolition
If you’re a little bit handy, then doing your own demolition is a great way to reduce costs. If you are retaining some of the surrounding elements, then be extra careful when pulling things apart. If you’re not careful, the extra costs to repair the damage caused when you hastily removed a bench-top or vanity or tiles – or whatever, could have better
been spent on someone else doing the work for you.
Remove your own rubbish
Removing your own rubbish and demolished materials from the property is a good way to save costs. It can be messy work, but can save you hundreds (maybe even thousands) of dollars. Tell your trades-people that you will remove all the rubbish yourself and for them to let you know in advance when it will need to be taken away. Sometimes a skip bin is much more practical, so weigh up your options first.
Get a ‘Scrapping Report’ to give your accountant before you start your renovation
In many cases, the fixtures and fittings inside an older property can still be written off prior to removal. This is called scrapping’ or ‘writing off’ and can amount to thousands of dollars in some cases. Although you do not directly save money (in fact you will have to pay a few hundred dollars for the report), you will gain the deductions at the end of the year when your tax return is completed.
Get a Depreciation Schedule once your renovation is completed
Once your renovation is completed, the new fixtures and fittings may then be depreciable. A qualified Quantity Surveyor will do this report for you to pass to your accountant, again for end of year tax deductions.
HOW TO BUY
Buy at auction
There are warehouses all over the place that sell all sorts of fixtures and fittings for bargain hunting renovators. Try auction houses for vanities, taps, baths, appliances and even kitchens. You’ll benefit from end of line items that retailers are trying to get rid of.
Buy in bulk
Some retailers will negotiate their price with you – particularly if you buy more than one or two items at the same time. Buy all your appliances, bathroom accessories, flooring, lighting etc. all at
once to increase your negotiating power. At the very least, try to negotiate free delivery.
Don’t buy retail
Go direct to the source for your best bargains. For example, kitchen retailers usually sub-contract the making of your kitchen to a cabinet-maker – and charge a hefty margin as a result. So buy directly from the manufacturer or at the very least, wholesaler to save truckloads of money. Hunt around for manufacturers and wholesalers selling direct to the public for things such as appliances, flooring, lighting, plants, landscaping supplies and anything else you need for
your renovation.
Set up trade accounts Many retailers will let you set up a trade account if you own a company and can provide them with the details. Discounts will vary depending on how much you buy and how well you can negotiate.
Buy on-line
Shopping on-line usually means you are buying wholesale because there is no showroom and associated costs for sales staff etc. This is in theory, however! Double check that you are getting a good deal and that delivery is included in your costs. You might do your research at local
retailers but then buy the products you select, from an on-line seller. Try:
WHAT TO BUY
Choose in-stock items
Suppliers are much more likely to ‘cut you a deal’ if the products you’re negotiating on are in stock.
Buy factory seconds
Plenty of retailers sell seconds all year round – not just at sale time. Sellers with large showrooms often have an area set aside for less-than-perfect stock ready to
be bought by bargain hunters. Don’t take their discount price at face value – even
though it is already discounted; try your luck on reducing it even more. You’re really doing them a favour by helping clear their floor for full priced stock!
Buy Asian imports
Years ago Asian imports were not the quality they are these days. You can buy an excellent range of well priced items and I particularly favour the cheaper imported products if I am selling a property immediately. Always buy good quality, but you can get away with slightly lower quality in many cases.
Replace like with like
When replacing some fixtures and fittings, it’s a good idea to keep their same size and/or location. For example; replacing light fittings in the same location will save you costs on repairing and painting the entire ceiling. Replacing cabinet handles with the same size as previously will ensure you use the same fixing holes again (and not left with gaps you need to fill). Keeping flooring the same thickness helps eliminate problems with the skirting boards in some cases. Think about what you are replacing and how its differences will affect the areas
surround it.
Replace with bigger and better
This is true ONLY in some circumstances. For example if you are replacing the bathroom vanity but not upgrading your floor or walls, then make sure the footprint of your new vanity is bigger
than the footprint of the old one. This will ensure that any floor and wall damage caused when the old vanity is removed is concealed by the new vanity.
Consider what damage is likely to be caused when removing any item that is going to be replaced and when possible, replace it with something bigger/taller/larger. Eg: a larger wall tile
area to cover damage caused when the old ones are removed, a larger toilet
footprint to cover the old footprint,
larger light fittings to cover fixing holes etc. Eliminating ‘making good’ (restoring damaged surfaces) is a great way to keep costs down.
MANAGING YOUR RENOVATION
Work out your budget BEFORE starting your renovation
So, 1) know your budget and then 2) work out what to do to your property with that amount of money. DO NOT do this the other way round. You must fit your renovation to your budget NOT fit your budget to your renovation. The latter will always lead to overcapitalising.
Know exactly what you’ll do and what it will cost
Knowing in advance exactly what you are going to do to your property is essential for sticking to your budget. You will already have worked out how much money you plan on spending, so now it’s time to work out what – exactly – you are going to do, and what it will cost. Get pricing from reliable and recommended trades-people on every aspect of your renovation before you start a thing. Try to get fixed pricing for everything (as opposed to un-capped hourly rates) and assemble all your supply/delivery/labour prices together on a spreadsheet.
Buy in advance
Give yourself plenty of time to hunt around for the best bargains. Buying in a rush often leads to spending too much. Put the time into researching exactly what you need (dimensions, colour, specifications required) and who will sell it to you for the best price.
DIY Finishing – painting, tiling, gardening etc
If you’re a little bit handy and you have the time, then doing your own ‘finishing’ can save you thousands. I’m not a huge fan of DIY simply because it tends to take so much longer than paying someone else to get it done for you (taking into account the holding/mortgage costs you’ll be
paying for the duration of your reno if you’re not living there). Use good tools and educate yourself on the best way to perform the job at hand. The internet is of course a great place to get help – try
www.eHow.com and type in the search function whatever it is you need to know.
Supply your labour to your tradespeople
Being the errand runner or ‘lackey’ to your trades-people will save costs on their running around for you. You will need to be available to do many sorts of things – sweeping floors, going down to the hardware store, stripping paint, cleaning glass, stripping wallpaper, sugar soaping walls etc. It’ll be physical work but will save you having to pay skilled trades-people to do unskilled work.
Supply products to trades-people and pay them labour only
This is a great idea if you have some experience. Buy the materials, fixtures,
fittings, products etc. for your renovation and deliver them to site for your tradespeople to install. Trades-people will usually add a margin on to any materials, fixtures and fittings they provide, so supplying your own can be an excellent way to trim costs. However, be wary that if there is any problem what-so-ever with what you are supplying to the tradesperson, then they will take no
responsibility for it. For example, this is particularly a problem with electrical
items where the fitting is installed by the electrician but doesn’t work. With a ‘labour only’ contract, you are paying the electrician to install your lights/switches/fans etc only. If there is a problem with the fittings then they will charge you extra to replace or repair them. So on the face of it, supplying your own materials is a good idea, but unless you are an experienced renovator, it can cause real problems. Be careful.
Hire or borrow tools if you choose to DIY
If you’re going to do all or some of the renovation yourself, then you’ll need some tools of the trade. Unless renovating is your business, then you’ll want to avoid spending money on tools as
much as possible. Borrow as much as you can, then hire the rest. Buy tools if you absolutely have to – but if you’re forced to buy the tool to carry out the job, then work out if you’re financially better to just pay a professional to do it for you.
Renovate the whole property all at once
Rather than spreading your renovation over a period of months and having one room completed at a time, it is a real cost saver to have it all done at once.
This of course is not practical if you or someone else lives in the house, but it is the best thing to do for a vacant property. Trades-people will charge more to keep returning, and fixtures and fittings will cost more if purchased individually (rather than in bulk), so get it all done in one go.
Manage your renovation well
When your renovation is under way, visit the site briefly and frequently (if you are not doing the work yourself) to resolve inevitable issues that will arise and risk your budget blowing out. Good
communication between yourself and your trades-people is essential. Make sure they know you are available any time to answer questions and discuss problems throughout the course of your project.
Keep track of variations
Problems and un-planned situations are always going to happen during a
renovation. Even the most experienced renovators can’t predict every problem that arises. The trick is to track and monitor your renovation spending on a daily basis. You will have your costings laid out on a spreadsheet – so as soon as you know about a change to the specification (and price), update your spreadsheet accordingly.
WHAT TO DO NEXT
Establish the potential re-value of your property after it has been renovated
Ascertain how much money you should spend on your renovation to get the best return & avoid over-capitalising
Discuss possible renovation changes that will most effectively magnify the value of your property
Clarify how a Renovation Action Plan will help you:
o Reach the upper limit of your property’s re-value potential
o Ensure your renovation costs stay on track & you don’t overspend
o Know exactly what changes to make to your property in the form of a to-do checklist –
including what areas to
renovate and what colours, products, fixtures and fittings to use throughout
o Transform your property into a valuable asset to re-value (and benefit from the increased
equity) or sell
Presented by Geoff Grover, The BUYER Reach agent, REMAX Property Associates
Coolum Beach, Sunshine Coast
– www.geoffgrover.com.au. – Mobile 0414 337 402 – geoffgrover@remax.com.au
Geoff recommends Jane Eyles‐Bennett of Hotspace Consultants for a professional
Renovation Action Plan
www.hotspaceconsultants.com - info@hotspaceconsultants.com
– 27 Secrets for Keeping More Money in your
Prepared by Hotspace Consultants, which is the brainchild of Jane Eyles‐Bennett - award winning interior designer, serial property investor and master renovator!
www.hotspaceconsultants.com
Renovating can be a fun, rewarding and exhilarating experience. And whether you’ve renovated your own property or properties in the past or just witnessed other people’s experiences,
you’ll know that there are plenty of things to learn and traps to avoid during
the process.
The one area where the majority of people trip up is with their budget.
This could be because they simply plan to do too much to their property and end up over-capitalising. Or because they spend too much money on getting what they
plan on doing, done. Or worse, a combination of both!
As a comprehensive 'to-do'-type checklist (including all the colours, fixtures, fittings and materials to use throughout every part of your renovation), freshlywritten specifically for your property, it’s a sure-fire way to only do to your property what is going to add value.
It’s also the smart way to make sure you only spend what you need to spend on your property - and avoid overcapitalising.
The 27 ‘secrets’ in this report give you some good ideas for reducing your renovation costs for the things you do decide to do to your property – so that you reduce the risk of over-capitalising
and increase your chances of making a profit!
AROUND THE HOUSE
Repair and Re-use
Re-use fixtures and fittings whenever possible. Particularly with low budget reno’s, re-using as much of the existing fixtures and fittings is essential. However, you’ll find this may sometimes be the case on more expensive properties too. Only change and update the ‘must do’ items (just make sure the new colours and finishes will tie in with whatever is remaining in the space). You may need to perform some repair work in order to reuse some fixtures and fittings – so work
out the cost to repair vs. the cost to replace before deciding.
Sell, sell, sell
Consider selling everything and anything you are removing from the property.
What you consider as junk might get you even a few dollars toward your renovation costs. Even if you sell the old oven for$50, the old laundry tub for $30, and the old light fittings for $60, there’s $140 to spend on paint or a plumbing job. Your trash is often someone else’s treasure – and it’ll save you on dumping costs too.
Relocate
There are a few things around a property that you can generally relocate to enhance your renovation. Plants are usually easy to relocate, as are pavers and curtains, light fittings and plenty of other things. You might relocate some of your existing fittings to less important or
prominent parts of the property and install new fittings into the immediately obvious areas (e.g. exterior, kitchen and lounge).
Do your own demolition
If you’re a little bit handy, then doing your own demolition is a great way to reduce costs. If you are retaining some of the surrounding elements, then be extra careful when pulling things apart. If you’re not careful, the extra costs to repair the damage caused when you hastily removed a bench-top or vanity or tiles – or whatever, could have better
been spent on someone else doing the work for you.
Remove your own rubbish
Removing your own rubbish and demolished materials from the property is a good way to save costs. It can be messy work, but can save you hundreds (maybe even thousands) of dollars. Tell your trades-people that you will remove all the rubbish yourself and for them to let you know in advance when it will need to be taken away. Sometimes a skip bin is much more practical, so weigh up your options first.
Get a ‘Scrapping Report’ to give your accountant before you start your renovation
In many cases, the fixtures and fittings inside an older property can still be written off prior to removal. This is called scrapping’ or ‘writing off’ and can amount to thousands of dollars in some cases. Although you do not directly save money (in fact you will have to pay a few hundred dollars for the report), you will gain the deductions at the end of the year when your tax return is completed.
Get a Depreciation Schedule once your renovation is completed
Once your renovation is completed, the new fixtures and fittings may then be depreciable. A qualified Quantity Surveyor will do this report for you to pass to your accountant, again for end of year tax deductions.
HOW TO BUY
Buy at auction
There are warehouses all over the place that sell all sorts of fixtures and fittings for bargain hunting renovators. Try auction houses for vanities, taps, baths, appliances and even kitchens. You’ll benefit from end of line items that retailers are trying to get rid of.
Buy in bulk
Some retailers will negotiate their price with you – particularly if you buy more than one or two items at the same time. Buy all your appliances, bathroom accessories, flooring, lighting etc. all at
once to increase your negotiating power. At the very least, try to negotiate free delivery.
Don’t buy retail
Go direct to the source for your best bargains. For example, kitchen retailers usually sub-contract the making of your kitchen to a cabinet-maker – and charge a hefty margin as a result. So buy directly from the manufacturer or at the very least, wholesaler to save truckloads of money. Hunt around for manufacturers and wholesalers selling direct to the public for things such as appliances, flooring, lighting, plants, landscaping supplies and anything else you need for
your renovation.
Set up trade accounts Many retailers will let you set up a trade account if you own a company and can provide them with the details. Discounts will vary depending on how much you buy and how well you can negotiate.
Buy on-line
Shopping on-line usually means you are buying wholesale because there is no showroom and associated costs for sales staff etc. This is in theory, however! Double check that you are getting a good deal and that delivery is included in your costs. You might do your research at local
retailers but then buy the products you select, from an on-line seller. Try:
WHAT TO BUY
Choose in-stock items
Suppliers are much more likely to ‘cut you a deal’ if the products you’re negotiating on are in stock.
Buy factory seconds
Plenty of retailers sell seconds all year round – not just at sale time. Sellers with large showrooms often have an area set aside for less-than-perfect stock ready to
be bought by bargain hunters. Don’t take their discount price at face value – even
though it is already discounted; try your luck on reducing it even more. You’re really doing them a favour by helping clear their floor for full priced stock!
Buy Asian imports
Years ago Asian imports were not the quality they are these days. You can buy an excellent range of well priced items and I particularly favour the cheaper imported products if I am selling a property immediately. Always buy good quality, but you can get away with slightly lower quality in many cases.
Replace like with like
When replacing some fixtures and fittings, it’s a good idea to keep their same size and/or location. For example; replacing light fittings in the same location will save you costs on repairing and painting the entire ceiling. Replacing cabinet handles with the same size as previously will ensure you use the same fixing holes again (and not left with gaps you need to fill). Keeping flooring the same thickness helps eliminate problems with the skirting boards in some cases. Think about what you are replacing and how its differences will affect the areas
surround it.
Replace with bigger and better
This is true ONLY in some circumstances. For example if you are replacing the bathroom vanity but not upgrading your floor or walls, then make sure the footprint of your new vanity is bigger
than the footprint of the old one. This will ensure that any floor and wall damage caused when the old vanity is removed is concealed by the new vanity.
Consider what damage is likely to be caused when removing any item that is going to be replaced and when possible, replace it with something bigger/taller/larger. Eg: a larger wall tile
area to cover damage caused when the old ones are removed, a larger toilet
footprint to cover the old footprint,
larger light fittings to cover fixing holes etc. Eliminating ‘making good’ (restoring damaged surfaces) is a great way to keep costs down.
MANAGING YOUR RENOVATION
Work out your budget BEFORE starting your renovation
So, 1) know your budget and then 2) work out what to do to your property with that amount of money. DO NOT do this the other way round. You must fit your renovation to your budget NOT fit your budget to your renovation. The latter will always lead to overcapitalising.
Know exactly what you’ll do and what it will cost
Knowing in advance exactly what you are going to do to your property is essential for sticking to your budget. You will already have worked out how much money you plan on spending, so now it’s time to work out what – exactly – you are going to do, and what it will cost. Get pricing from reliable and recommended trades-people on every aspect of your renovation before you start a thing. Try to get fixed pricing for everything (as opposed to un-capped hourly rates) and assemble all your supply/delivery/labour prices together on a spreadsheet.
Buy in advance
Give yourself plenty of time to hunt around for the best bargains. Buying in a rush often leads to spending too much. Put the time into researching exactly what you need (dimensions, colour, specifications required) and who will sell it to you for the best price.
DIY Finishing – painting, tiling, gardening etc
If you’re a little bit handy and you have the time, then doing your own ‘finishing’ can save you thousands. I’m not a huge fan of DIY simply because it tends to take so much longer than paying someone else to get it done for you (taking into account the holding/mortgage costs you’ll be
paying for the duration of your reno if you’re not living there). Use good tools and educate yourself on the best way to perform the job at hand. The internet is of course a great place to get help – try
www.eHow.com and type in the search function whatever it is you need to know.
Supply your labour to your tradespeople
Being the errand runner or ‘lackey’ to your trades-people will save costs on their running around for you. You will need to be available to do many sorts of things – sweeping floors, going down to the hardware store, stripping paint, cleaning glass, stripping wallpaper, sugar soaping walls etc. It’ll be physical work but will save you having to pay skilled trades-people to do unskilled work.
Supply products to trades-people and pay them labour only
This is a great idea if you have some experience. Buy the materials, fixtures,
fittings, products etc. for your renovation and deliver them to site for your tradespeople to install. Trades-people will usually add a margin on to any materials, fixtures and fittings they provide, so supplying your own can be an excellent way to trim costs. However, be wary that if there is any problem what-so-ever with what you are supplying to the tradesperson, then they will take no
responsibility for it. For example, this is particularly a problem with electrical
items where the fitting is installed by the electrician but doesn’t work. With a ‘labour only’ contract, you are paying the electrician to install your lights/switches/fans etc only. If there is a problem with the fittings then they will charge you extra to replace or repair them. So on the face of it, supplying your own materials is a good idea, but unless you are an experienced renovator, it can cause real problems. Be careful.
Hire or borrow tools if you choose to DIY
If you’re going to do all or some of the renovation yourself, then you’ll need some tools of the trade. Unless renovating is your business, then you’ll want to avoid spending money on tools as
much as possible. Borrow as much as you can, then hire the rest. Buy tools if you absolutely have to – but if you’re forced to buy the tool to carry out the job, then work out if you’re financially better to just pay a professional to do it for you.
Renovate the whole property all at once
Rather than spreading your renovation over a period of months and having one room completed at a time, it is a real cost saver to have it all done at once.
This of course is not practical if you or someone else lives in the house, but it is the best thing to do for a vacant property. Trades-people will charge more to keep returning, and fixtures and fittings will cost more if purchased individually (rather than in bulk), so get it all done in one go.
Manage your renovation well
When your renovation is under way, visit the site briefly and frequently (if you are not doing the work yourself) to resolve inevitable issues that will arise and risk your budget blowing out. Good
communication between yourself and your trades-people is essential. Make sure they know you are available any time to answer questions and discuss problems throughout the course of your project.
Keep track of variations
Problems and un-planned situations are always going to happen during a
renovation. Even the most experienced renovators can’t predict every problem that arises. The trick is to track and monitor your renovation spending on a daily basis. You will have your costings laid out on a spreadsheet – so as soon as you know about a change to the specification (and price), update your spreadsheet accordingly.
WHAT TO DO NEXT
Establish the potential re-value of your property after it has been renovated
Ascertain how much money you should spend on your renovation to get the best return & avoid over-capitalising
Discuss possible renovation changes that will most effectively magnify the value of your property
Clarify how a Renovation Action Plan will help you:
o Reach the upper limit of your property’s re-value potential
o Ensure your renovation costs stay on track & you don’t overspend
o Know exactly what changes to make to your property in the form of a to-do checklist –
including what areas to
renovate and what colours, products, fixtures and fittings to use throughout
o Transform your property into a valuable asset to re-value (and benefit from the increased
equity) or sell
Presented by Geoff Grover, The BUYER Reach agent, REMAX Property Associates
Coolum Beach, Sunshine Coast
– www.geoffgrover.com.au. – Mobile 0414 337 402 – geoffgrover@remax.com.au
Geoff recommends Jane Eyles‐Bennett of Hotspace Consultants for a professional
Renovation Action Plan
www.hotspaceconsultants.com - info@hotspaceconsultants.com
Saturday, September 11, 2010
Tuesday, August 17, 2010
Home loans fall to nine year lows
The LCTeam reports on 9 August that home loan commitments fell to nine year lows in June as investor demand weakened and housing momentum slowed, posing monetary policy concerns for the central bank, economists say.
The housing recovery was now at an end as higher interest rates continued to bite, they said.
Australian housing finance commitments for owner-occupied housing fell 3.9 per cent in June, almost twice the market forecast of 2.0 per cent, the Australian Bureau of Statistics (ABS) said on Monday.
Total housing finance by value fell by 1.9 per cent in June, seasonally adjusted, to $20.710 billion. CommSec economist Craig James said the figures showed “continued weakness” in the housing market.
“In the last couple of months, investors had served to prop up the overall market, but that wasn’t the case this time around,” Mr James said. “It must be starting to come as a concern for the authorities.”
He said Australia was now seeing the “loss of momentum” in the housing market, with housing finance commitments at nine year lows.“Certainly, the rate hikes that have been applied late last year and early last year are continuing to bite.”
He said weakness in retail spending, the housing market and manufacturing services and construction now revealed an economy that had “lost its way to some extent,” he said.
Mr James said the poor construction finance figures would signal concerns about a lack of demand for projects in the second half of the year.
The ABS said finance for construction projects fell by five per cent in June.
AMP Capital Investors chief economist Shane Oliver said the falls pointed to an ongoing deterioration of the housing sector.“It’s basically telling us the housing recovery that we’ve seen over the last 18 months has come to an end,” Dr Oliver said.“We can’t rely on housing construction to continue pushing the economy ahead. We’re going to be more reliant on the consumer and particularly business investment.”
Weakness in housing finance would also flow through to weakness in house prices, which was becoming evident towards the end of June, Dr Oliver said.“It’s another reason for the Reserve Bank to leave rates on hold.”
Westpac economists said the figures “surprised on the low side” as the investor upswing “took a breather”. A decline in housing finance in June was expected, but not one of that magnitude, they said. “We would interpret this as the tail end of weakness in response to the RBA’s rapid fire normalisation of rates,” the economists said in a statement.
The Reserve Bank of Australia (RBA) may well leave rates unchanged for the rest of this year.“ This points to finance demand stabilising and most likely moving higher during the second half of 2010.”
The housing recovery was now at an end as higher interest rates continued to bite, they said.
Australian housing finance commitments for owner-occupied housing fell 3.9 per cent in June, almost twice the market forecast of 2.0 per cent, the Australian Bureau of Statistics (ABS) said on Monday.
Total housing finance by value fell by 1.9 per cent in June, seasonally adjusted, to $20.710 billion. CommSec economist Craig James said the figures showed “continued weakness” in the housing market.
“In the last couple of months, investors had served to prop up the overall market, but that wasn’t the case this time around,” Mr James said. “It must be starting to come as a concern for the authorities.”
He said Australia was now seeing the “loss of momentum” in the housing market, with housing finance commitments at nine year lows.“Certainly, the rate hikes that have been applied late last year and early last year are continuing to bite.”
He said weakness in retail spending, the housing market and manufacturing services and construction now revealed an economy that had “lost its way to some extent,” he said.
Mr James said the poor construction finance figures would signal concerns about a lack of demand for projects in the second half of the year.
The ABS said finance for construction projects fell by five per cent in June.
AMP Capital Investors chief economist Shane Oliver said the falls pointed to an ongoing deterioration of the housing sector.“It’s basically telling us the housing recovery that we’ve seen over the last 18 months has come to an end,” Dr Oliver said.“We can’t rely on housing construction to continue pushing the economy ahead. We’re going to be more reliant on the consumer and particularly business investment.”
Weakness in housing finance would also flow through to weakness in house prices, which was becoming evident towards the end of June, Dr Oliver said.“It’s another reason for the Reserve Bank to leave rates on hold.”
Westpac economists said the figures “surprised on the low side” as the investor upswing “took a breather”. A decline in housing finance in June was expected, but not one of that magnitude, they said. “We would interpret this as the tail end of weakness in response to the RBA’s rapid fire normalisation of rates,” the economists said in a statement.
The Reserve Bank of Australia (RBA) may well leave rates unchanged for the rest of this year.“ This points to finance demand stabilising and most likely moving higher during the second half of 2010.”
Sunday, August 1, 2010
Time on the market & pricing
Everybody says you can only go down in price when listing, you can`t go up, hence the basic incorrect premise when starting off selling is set in stone. Combined with the inexperienced real estate agent providing a "big" start price so they don`t lose the listing, the downward spiral starts.
Michael Matusik, probably the most respected Queensland property analyst in the business, put it in very sharp perspective in his latest article in the Courier Mail 31 July 2010.(full article available by download from my website at www.geoffgrover.com.au) He says that his research shows that the first offer can often be the best offer, the next one 5% below and the third offer often not eventuating.
The question is asked as to why buyers and sellers pontificate over small sums relative to the total offered price and try to hold their positions? Over time, these sums become regarded as trifling, and almost a laughing matter in retrospect of a few years duration.
Is it a macho thing where one can`t seem to be giving in? It all puts in clear perspective the skills of an experienced real estate agent in enabling relativiites to be examined rather than claiming moral ground and a perhaps phyrric victory! It is, after all, a win-win scenario we are all seeking.
Residential properties are in essence a place to enjoy living in and to hold relative value, not a speculative investment to make money at the expense of fellow man (and woman), and those that seek that journey are destined to be very lonely people indeed and to stuff up their sale process to their extreme detriment in the meantime - my advice if you are this way structured, please don`t give me a call to sell your property, even though my record shows I perform at a level way, way above the industry average - check out my report card at www.geoffgrover.com.au.
Michael Matusik, probably the most respected Queensland property analyst in the business, put it in very sharp perspective in his latest article in the Courier Mail 31 July 2010.(full article available by download from my website at www.geoffgrover.com.au) He says that his research shows that the first offer can often be the best offer, the next one 5% below and the third offer often not eventuating.
The question is asked as to why buyers and sellers pontificate over small sums relative to the total offered price and try to hold their positions? Over time, these sums become regarded as trifling, and almost a laughing matter in retrospect of a few years duration.
Is it a macho thing where one can`t seem to be giving in? It all puts in clear perspective the skills of an experienced real estate agent in enabling relativiites to be examined rather than claiming moral ground and a perhaps phyrric victory! It is, after all, a win-win scenario we are all seeking.
Residential properties are in essence a place to enjoy living in and to hold relative value, not a speculative investment to make money at the expense of fellow man (and woman), and those that seek that journey are destined to be very lonely people indeed and to stuff up their sale process to their extreme detriment in the meantime - my advice if you are this way structured, please don`t give me a call to sell your property, even though my record shows I perform at a level way, way above the industry average - check out my report card at www.geoffgrover.com.au.
Tuesday, June 29, 2010
What not to do when Interior Decorating
Here is our list of the top things NOT to do, not now, not ever!
1. Don't Let Someone Make Choices for You
Your home is your personal space. Don't let someone else tell you what you should do. If you need help, ask for suggestions. But when the time comes to make decisions, they should be yours. It's your home and you should feel comfortable with the choices.
2. Don't Paint First
You can buy paint in every colour under the sun. In fact, you can have paint mixed in any imaginable colour you might want. Choose fabric, carpet, and upholstery first.
3. Don't Choose Paint From a Paint Chip
A small chip of a paint sample might look great in the fluorescent light in the paint shop. But a whole wall of it might be overpowering. When you've decided on a colour, purchase a sample of the color and paint a small section to see how the colour looks in the room with natural light. If you don't want to mess up the walls, paint a piece of cardboard and tape it on the walls in the room where you plan to use the color.
4. Don't Decide on Colours in a Shop
Never buy fabric, flooring, or paint on your first visit. Ask for samples of paint and carpet and swatches of fabric so you can see what they look like in your home. Check them out in natural light and in the evening with lamps.
5. Don't Settle for Blah If You Love Bold
A litre of red paint doesn't cost any more than a litre of white. You get my point! If you love colour, find a way to use your favorite colours in your home. Choose colours that express your personality and coordinate with things you love.
6. Don't Make Your Favorite Colour the Main Colour
If you love red, you don't have to choose it for your walls. Instead, choose a more subtle shade to provide a background that will let items in your favorite colour really "pop."
7. Don't Ignore the Psychology of Colour
Don't think that you can create a relaxing sanctuary in a room with red walls. Blue and green are more calming and relaxing. Choose red and orange for play rooms or family rooms where the action is. Select a colour scheme to create the atmosphere you want in the room.
8. Don't Forget Colour Undertones
Not all blue is blue. Not all whites are the same white. Look beyond the main colour to see if the hue is light or dark, crisp or dull. Choose coordinating colours with the same intensity.
9. Don't Force a Colour Scheme
Don't "make" things match. Just because you have a red print sofa doesn't mean that it will coordinate with any red stripe draperies. Choose your colour family, identify the major pieces, decide what you have that will have a place in the room, and then recover, repaint, and coordinate all the elements. Find another place for or get rid of anything that doesn't fit your plan.
10. Don't Ignore the Focal Point of Your Room
Not every room has a focal point, but if yours does, make it important. Arrange the artwork and furniture around this important element.
11. Don't Let Your Furniture Hug the Walls
Don't arrange the chairs, sofa, and tables all around the room unless you have no choice. Make groupings of furniture for conversations and pull pieces into the centre of the room for a warmer feeling of comfort.
12. Don't Build Barriers
Don't put a chair in front of a door or a table in an obvious traffic area. Leave room for easy access and movement within the room.
13. Don't Settle for Cheap
Don't choose a piece of furniture because of a pretty cover or fun colour. First, see if it's well made, has interesting details or classic lines. If it does, you can always recover the upholstery in a fabric you choose or refinish the frame.
14. Don't Invest in Trends
Don't break you budget on pieces that are trendy. Trends come and go. You'll want to spend your precious resources on pieces that will last for a while. If you are attracted to crystal studded or fur-covered furniture, experiment with a less expensive crystal embellished lampshade or faux fur throw.
15. Don't Keep Mismatched Furniture
If you inherit or end up with a lot of pieces that don't match, find a way to tie them together in your decorating scheme. Paint odd wooden furniture frames to match or recover pillows and upholstery with coordinating fabrics.
16. Don't Be Extravagant on Useless Pieces
If a piece doesn't serve some function and won't last for years, put your money back in your wallet. Save your funds for the necessities unless you just can't resist.
17. Don't Keep Things Because You Think You Should
Don't feel obligated to keep a piece you've inherited. If it doesn't appeal to you or it doesn't fit your space, either fix it or get rid of it. After all, it's your home. They'll understand!
18. Don't Allow Ugly Anywhere
Of course, ugly is in the eye of the beholder. But don't think you can learn to like something if you really don't. Get rid of it!
19. Don't Display Every Personal Treasure
Don't overcrowd your home with collectibles. Make each piece be important. If it isn't or if you don't have room, store them away and change your collection from time to time. You'll be glad when it's time to dust!
20. Don't Forget the Details
Don't just paint the walls and put the furniture around the room. Learn about details that make your decorating style unique. Find interesting lamps, arrange books neatly, add decorative pillows to furniture, and include fragrant candles and flowers.
Decorating is fun! If you follow this advice, you'll be able to avoid most of the major decorating mistakes and have a home you love to come home to!
Geoff. Grover
REMAX Property Associates
www.geoffgrover.com.au
1. Don't Let Someone Make Choices for You
Your home is your personal space. Don't let someone else tell you what you should do. If you need help, ask for suggestions. But when the time comes to make decisions, they should be yours. It's your home and you should feel comfortable with the choices.
2. Don't Paint First
You can buy paint in every colour under the sun. In fact, you can have paint mixed in any imaginable colour you might want. Choose fabric, carpet, and upholstery first.
3. Don't Choose Paint From a Paint Chip
A small chip of a paint sample might look great in the fluorescent light in the paint shop. But a whole wall of it might be overpowering. When you've decided on a colour, purchase a sample of the color and paint a small section to see how the colour looks in the room with natural light. If you don't want to mess up the walls, paint a piece of cardboard and tape it on the walls in the room where you plan to use the color.
4. Don't Decide on Colours in a Shop
Never buy fabric, flooring, or paint on your first visit. Ask for samples of paint and carpet and swatches of fabric so you can see what they look like in your home. Check them out in natural light and in the evening with lamps.
5. Don't Settle for Blah If You Love Bold
A litre of red paint doesn't cost any more than a litre of white. You get my point! If you love colour, find a way to use your favorite colours in your home. Choose colours that express your personality and coordinate with things you love.
6. Don't Make Your Favorite Colour the Main Colour
If you love red, you don't have to choose it for your walls. Instead, choose a more subtle shade to provide a background that will let items in your favorite colour really "pop."
7. Don't Ignore the Psychology of Colour
Don't think that you can create a relaxing sanctuary in a room with red walls. Blue and green are more calming and relaxing. Choose red and orange for play rooms or family rooms where the action is. Select a colour scheme to create the atmosphere you want in the room.
8. Don't Forget Colour Undertones
Not all blue is blue. Not all whites are the same white. Look beyond the main colour to see if the hue is light or dark, crisp or dull. Choose coordinating colours with the same intensity.
9. Don't Force a Colour Scheme
Don't "make" things match. Just because you have a red print sofa doesn't mean that it will coordinate with any red stripe draperies. Choose your colour family, identify the major pieces, decide what you have that will have a place in the room, and then recover, repaint, and coordinate all the elements. Find another place for or get rid of anything that doesn't fit your plan.
10. Don't Ignore the Focal Point of Your Room
Not every room has a focal point, but if yours does, make it important. Arrange the artwork and furniture around this important element.
11. Don't Let Your Furniture Hug the Walls
Don't arrange the chairs, sofa, and tables all around the room unless you have no choice. Make groupings of furniture for conversations and pull pieces into the centre of the room for a warmer feeling of comfort.
12. Don't Build Barriers
Don't put a chair in front of a door or a table in an obvious traffic area. Leave room for easy access and movement within the room.
13. Don't Settle for Cheap
Don't choose a piece of furniture because of a pretty cover or fun colour. First, see if it's well made, has interesting details or classic lines. If it does, you can always recover the upholstery in a fabric you choose or refinish the frame.
14. Don't Invest in Trends
Don't break you budget on pieces that are trendy. Trends come and go. You'll want to spend your precious resources on pieces that will last for a while. If you are attracted to crystal studded or fur-covered furniture, experiment with a less expensive crystal embellished lampshade or faux fur throw.
15. Don't Keep Mismatched Furniture
If you inherit or end up with a lot of pieces that don't match, find a way to tie them together in your decorating scheme. Paint odd wooden furniture frames to match or recover pillows and upholstery with coordinating fabrics.
16. Don't Be Extravagant on Useless Pieces
If a piece doesn't serve some function and won't last for years, put your money back in your wallet. Save your funds for the necessities unless you just can't resist.
17. Don't Keep Things Because You Think You Should
Don't feel obligated to keep a piece you've inherited. If it doesn't appeal to you or it doesn't fit your space, either fix it or get rid of it. After all, it's your home. They'll understand!
18. Don't Allow Ugly Anywhere
Of course, ugly is in the eye of the beholder. But don't think you can learn to like something if you really don't. Get rid of it!
19. Don't Display Every Personal Treasure
Don't overcrowd your home with collectibles. Make each piece be important. If it isn't or if you don't have room, store them away and change your collection from time to time. You'll be glad when it's time to dust!
20. Don't Forget the Details
Don't just paint the walls and put the furniture around the room. Learn about details that make your decorating style unique. Find interesting lamps, arrange books neatly, add decorative pillows to furniture, and include fragrant candles and flowers.
Decorating is fun! If you follow this advice, you'll be able to avoid most of the major decorating mistakes and have a home you love to come home to!
Geoff. Grover
REMAX Property Associates
www.geoffgrover.com.au
Friday, May 28, 2010
Property investors missing out on millions of dollars of tax relief
The Sunshine Coast, along with a great proportion of Australia, is a land where over 30% of all properties are owned by absentee owners and not as their prime place of residence, ie, by definition investment properties. They are not all the “ pure property player” investor building a long term and substantial portfolio and engaging professionals to advise on capital return and tax implications, many simply have a second property as a long term renter or a renovator and try to keep running costs to the bare minimum
The problem is, thousands of these people are missing out on potential and perhaps substantial “tax breaks”. The responsibility for clarifying and claiming tax concessions are with the investor, not the ATO, and this is a specialized field requiring professional assistance. Long term local real estate identity, Geoff Grover of REMAX Property Associates sees time and again where the “Mum & Dad “ investor or “tradie renovator’ looking to buy for the above reasons simply do not understand the tax implications nor the tax relief available.
It was recently reported by Etax Accountants, The Australian 19 May that “the deduction we find most people miss is depreciation and building write-offs on their rental property” said Scott Griffin, director of Etax Accountants. “There are a whole lot of things people could be claiming on their rental property, but they either just put in a few items of depreciation or even leave it out completely”.
The advice is that everyone who has a rental property - residential, commercial or industrial – simply has to engage a quantity surveyor to make a thorough list of all the things for which they can claim, all the things that they have done to the property or things that were there from prior years.
Bobby le Roux, director of Accord Quantity Surveyors based on the Sunshine Coast, says
“The benefits of having a tax depreciation schedule prepared by a specialist, is very often understated and worst of all completely unknown! “
Accord says owners of income producing properties may be eligible to claim substantial tax deductions on their properties. The current tax legislation permits a building write-off allowance. In addition, owners will be eligible to depreciate the furniture, fittings and plant within their property, as well as their share of the common property. Claiming this Tax Allowance may significantly enhance the after tax return on a property. Both the first and subsequent owners of a property may claim Tax allowances. The owners' accountant may further be entitled to adjust the past 4 years' tax returns in lieu of unclaimed allowances.
As an example of how complex it can become, there is often confusion from investors when it comes to knowing what landscaping in investment properties can be depreciated. The ATO will allow you to claim depreciation on ‘hard’ landscaping such as driveways, pathways, paving, pergolas, gazebos, clothes lines, retaining walls, fencing, rainwater tanks, swimming pools and spas. These items all fall under depreciation.
Pool equipment, rainwater pumps, irrigation controls and motors for gates are all depreciated under ‘Plant’ and therefore depreciated faster. Unfortunately, you are not able to depreciate ‘soft’ landscaping such as plants, soil / fill, turf, mulch, and rocks / pebbles.
Renovations of properties whereby the initial build date is post 1985 where the internals of dwellings may be torn apart can become quite complex. Fittings intended to be removed may retain a residual value that can attract an immediate be tax deduction, so it is important to establish a quantity surveyor authorized value prior to demolishing original fittings. Even with the purchase of a house built prior to 1985, the owner can claim depreciation on the plant and equipment, but not the building.
Given the above situation, it is sensible advice for property investors to have Property Tax Allowances prepared by a professional that will ensure they receive their full Tax Allowance and Depreciation benefit available under the current tax legislation
The problem is, thousands of these people are missing out on potential and perhaps substantial “tax breaks”. The responsibility for clarifying and claiming tax concessions are with the investor, not the ATO, and this is a specialized field requiring professional assistance. Long term local real estate identity, Geoff Grover of REMAX Property Associates sees time and again where the “Mum & Dad “ investor or “tradie renovator’ looking to buy for the above reasons simply do not understand the tax implications nor the tax relief available.
It was recently reported by Etax Accountants, The Australian 19 May that “the deduction we find most people miss is depreciation and building write-offs on their rental property” said Scott Griffin, director of Etax Accountants. “There are a whole lot of things people could be claiming on their rental property, but they either just put in a few items of depreciation or even leave it out completely”.
The advice is that everyone who has a rental property - residential, commercial or industrial – simply has to engage a quantity surveyor to make a thorough list of all the things for which they can claim, all the things that they have done to the property or things that were there from prior years.
Bobby le Roux, director of Accord Quantity Surveyors based on the Sunshine Coast, says
“The benefits of having a tax depreciation schedule prepared by a specialist, is very often understated and worst of all completely unknown! “
Accord says owners of income producing properties may be eligible to claim substantial tax deductions on their properties. The current tax legislation permits a building write-off allowance. In addition, owners will be eligible to depreciate the furniture, fittings and plant within their property, as well as their share of the common property. Claiming this Tax Allowance may significantly enhance the after tax return on a property. Both the first and subsequent owners of a property may claim Tax allowances. The owners' accountant may further be entitled to adjust the past 4 years' tax returns in lieu of unclaimed allowances.
As an example of how complex it can become, there is often confusion from investors when it comes to knowing what landscaping in investment properties can be depreciated. The ATO will allow you to claim depreciation on ‘hard’ landscaping such as driveways, pathways, paving, pergolas, gazebos, clothes lines, retaining walls, fencing, rainwater tanks, swimming pools and spas. These items all fall under depreciation.
Pool equipment, rainwater pumps, irrigation controls and motors for gates are all depreciated under ‘Plant’ and therefore depreciated faster. Unfortunately, you are not able to depreciate ‘soft’ landscaping such as plants, soil / fill, turf, mulch, and rocks / pebbles.
Renovations of properties whereby the initial build date is post 1985 where the internals of dwellings may be torn apart can become quite complex. Fittings intended to be removed may retain a residual value that can attract an immediate be tax deduction, so it is important to establish a quantity surveyor authorized value prior to demolishing original fittings. Even with the purchase of a house built prior to 1985, the owner can claim depreciation on the plant and equipment, but not the building.
Given the above situation, it is sensible advice for property investors to have Property Tax Allowances prepared by a professional that will ensure they receive their full Tax Allowance and Depreciation benefit available under the current tax legislation
Saturday, April 24, 2010
House selling tips
It is an apt phrase, you don’t get a second chance to make a good impression when selling your real estate, and this applies whether you have a basic or a million dollar property in Mount Coolum, Coolum Beach or absolutely anywhere. Impressions are what counts if achieving a premium price for your property is what it is all about. It is amazing how quickly purchasers react to an inspection leading to the conclusion that your home is “on their list”. Getting your property on the list is the main objective. From there, the environment is set. The framework of negotiation starts early.
Information on the Real Estate Sales process is another service provided by Geoff Grover – Mount Coolum Real Estate and is required reading for those embarking on selling their property. Copies of this report and other relevant articles are found at www.geoffgrover.com.au and http://geoffgrover.blogspot.com
So what are the elements that count to getting a premium price for your real estate in Mount Coolum , Coolum Beach or where-ever?
Following are some important property selling tips.
Gardens are important.The first rule for creating a good first impression is having a great looking front garden. This is where potential buyers first see your property and it is important for it to look well maintained. This can be difficult in beachside locations such as Mount Coolum and Coolum Beach with minimal nutrients in sandy soil, so that extra ffort may be required.
Spring Clean Tidy up, hold a garage sale and get rid of anything you don't need. Light Bright houses sell well, open curtains and turn on lights before inspections. Fix Obvious Faults Faults encourage buyers to look for more. PetsYou love them, but maybe buyers won't. Keep them outside during open inspections. Many buyers are afraid of animals and some are even allergic to them. In the new beachside developments in Mount Coolum, we often have large houses on small blocks, so it is better in these cases to make arrangements to take the dog for a walk or visit a neighbor!
Smells, Cooking, pets, dampness and smoking can all give your house a nasty smell. Have carpets and curtains cleaned and open windows before inspections. Fresh air smells best. With the extremely wet and moist weather in Coolum Beach and Mount Coolum this year, mould has become a real issue and is a major turnoff Kitchen and Bathroom The most important rooms in the house. Squeaky clean they can help to make a sale. Neighbours.
Any unsightly problems in your street will detract from your home. So get together and clean up, ask them to remove their semi-trailer from the footpath.
Views - Prune trees and shrubs if they are blocking your best views. Clean windows and screens add to the view. OutsideSpruce up the exterior by washing down or repainting. Clean guttering, brush away leaves and cobwebs. Homely touches Add to the feel of the home, by placing fresh flowers on the table, a bowl of fruit, or jars of cookies in the kitchen.
Buying is an emotional decision. Silence is Golden Turn off the television and any loud music. Soft light classical music is appropriate. Little Things Fix all those "little things", the loose doorknob, or the screen that won't close, or that leaky tap. Cupboards Clean out cupboards, the less they have in them, the bigger they look. Storage space is a definite selling feature. Temperature Welcome buyers with a warm home in winter or a cool home in summer You Buyers are timid. Try not to be around during inspections, but if you are, try to be as inconspicuous as possible. Let our salesperson handle it all, they have lots of experience and that's what you are paying for. Also never apologise for your home. Tell people your home is for sale
Information on the Real Estate Sales process is another service provided by Geoff Grover – Mount Coolum Real Estate and is required reading for those embarking on selling their property. Copies of this report and other relevant articles are found at www.geoffgrover.com.au and http://geoffgrover.blogspot.com
So what are the elements that count to getting a premium price for your real estate in Mount Coolum , Coolum Beach or where-ever?
Following are some important property selling tips.
Gardens are important.The first rule for creating a good first impression is having a great looking front garden. This is where potential buyers first see your property and it is important for it to look well maintained. This can be difficult in beachside locations such as Mount Coolum and Coolum Beach with minimal nutrients in sandy soil, so that extra ffort may be required.
Spring Clean Tidy up, hold a garage sale and get rid of anything you don't need. Light Bright houses sell well, open curtains and turn on lights before inspections. Fix Obvious Faults Faults encourage buyers to look for more. PetsYou love them, but maybe buyers won't. Keep them outside during open inspections. Many buyers are afraid of animals and some are even allergic to them. In the new beachside developments in Mount Coolum, we often have large houses on small blocks, so it is better in these cases to make arrangements to take the dog for a walk or visit a neighbor!
Smells, Cooking, pets, dampness and smoking can all give your house a nasty smell. Have carpets and curtains cleaned and open windows before inspections. Fresh air smells best. With the extremely wet and moist weather in Coolum Beach and Mount Coolum this year, mould has become a real issue and is a major turnoff Kitchen and Bathroom The most important rooms in the house. Squeaky clean they can help to make a sale. Neighbours.
Any unsightly problems in your street will detract from your home. So get together and clean up, ask them to remove their semi-trailer from the footpath.
Views - Prune trees and shrubs if they are blocking your best views. Clean windows and screens add to the view. OutsideSpruce up the exterior by washing down or repainting. Clean guttering, brush away leaves and cobwebs. Homely touches Add to the feel of the home, by placing fresh flowers on the table, a bowl of fruit, or jars of cookies in the kitchen.
Buying is an emotional decision. Silence is Golden Turn off the television and any loud music. Soft light classical music is appropriate. Little Things Fix all those "little things", the loose doorknob, or the screen that won't close, or that leaky tap. Cupboards Clean out cupboards, the less they have in them, the bigger they look. Storage space is a definite selling feature. Temperature Welcome buyers with a warm home in winter or a cool home in summer You Buyers are timid. Try not to be around during inspections, but if you are, try to be as inconspicuous as possible. Let our salesperson handle it all, they have lots of experience and that's what you are paying for. Also never apologise for your home. Tell people your home is for sale
Thursday, April 8, 2010
House prices – are you a Doomsayer or a Property Spruiker?
The range of issues in the housing market bouncing around make it possible for both the doomsayers and the property spruikers to mount realistic cases to suit their argument – it is the balanced opinion, derived from professional statistical analysis that makes for the valued opinion.
Unfortunately, both partisan sides are prone to pulling out myths and graphs to illustrate points. The old saying is lies, dammed lies and statistics, and in today`s age of graphics, anybody can pull out a graph and statistics to ‘prove ‘ a point.
Let me make my stance quite clear. I am in the real estate industry, yet abhor the altruistic, vested interests of many agents whom perpetrate myths as to prices and growth. They trot them out every year and do our industry untold harm. My position is made quite clear on my blog site at http://geoffgrover.blogspot.com and my website at www.geoffgrover.com.au.
It is possible today to mount a cogent argument for both the extremes, and produce stats that at first flush prove the point. However, it is the balanced, analytic dissertation by an independent professional , that is is widely distributed to the investment community that is important to impart an understanding of the issues.
The value in this balanced advice is illustrated by the strength of each sides particular arguments:
The Doomsayers
• Cite chronic overpricing of the Australian housing market - our prices are one of the most expensive in the world, general approval by the experts.
• Cite overvaluing – prices are currently 29% higher than the long term trend. With this in mind, any current plateauing is not guaranteed to go up in the short term or even move up at all.
• Cite massive household debt – no argument here!
• Cite affordability – now at its lowest levels and going down further with interest rate rises continuing- just chat to Glen Stevens from the RBA!!
The proposition - all lead to a “price bubble” and the prospect of a collapse in prices
The Property Spruikers (usually those with a vested interest)
• Cite chronic shortage of housing and no surge of supply in sight
• Cite strong employment and business growth.
The proposition - all leading to house prices taking off, Sunshine Coast to follow the southern states lead, quoting examples of Sydney and Melbourne now, jump in before it is too late approach- in this context, note the article in the Australian 8 April about Harry Triguboff of Meriton fame pouring cold water on such view as he describes “the furore over rising residential prices as ’nonsense”. ”The prices are only rising in select areas of Sydney and Melbourne and nowher else, he said”
Interesting also to note that in this weeks My Property Preview issue,leading Sunshine Coast property magazine, an article talking about this happening shows a graph purporting to demonstrate the correlation supporting this lag effect when it shows the Sunshine Coast has over the last few years surpassed Sydney and there is not much in it now.
The statistical illiterate have probably not heard of standard deviation analysis actually linking correlations with some impact rather than vague graph lines having some resemblance to each other – from memory, second year Uni Stat Method–(Melbourne University circa early 1960`s, memories anyone?)depends very much on what statistics are used and how interpreted, which is why advice from the statistical experts is very important.
Note also the very significant difference between use of the basic average figure and the median averages used in most analytical forums. Such use of different definitions, seemingly irrelevant, can lead to for instance, such startling differences in a mundane examination of the rate of increase in the Peregian Springs suburb, Sunshine Coast, 2009 over 2009, from average showing a growth 2009 of 2%, whilst the median average showed a a drop of 10% - Michael Matusik, the Sunshine Coast property guru, even has issues with use of the median as segment skewing distorts even these numbers, he says you really need like for like housing price changes)
To quote an independent professional such as Dr Oliver , Chief Economist from the AMP, a major fund player, in his analysis released March 2010 he suggests pretty much the above factors balance out and will lead to an Australian housing price increase of around 5% during this year. Remember that inflation (CPI is a different, although very similar measure) was 1.82% 2009, well down on the nine year average of 3.026%, although it is heading north to the concern of the RBA, so gains are not actually monumental unless compared to sticking cash under the bed.
Articles quoted here are available for download in full from my website at www.geoffgrover.com.aiu plus a host of other articles re the Sunshine Coast property market.
It does come down to, though, what everybody always recommends, do your homework on the specific area in mind to suit the investment criteria adopted, eg, capital growth or long term “cash positive” yield hold.
Article written by Geoff GROVER – April 2010
Unfortunately, both partisan sides are prone to pulling out myths and graphs to illustrate points. The old saying is lies, dammed lies and statistics, and in today`s age of graphics, anybody can pull out a graph and statistics to ‘prove ‘ a point.
Let me make my stance quite clear. I am in the real estate industry, yet abhor the altruistic, vested interests of many agents whom perpetrate myths as to prices and growth. They trot them out every year and do our industry untold harm. My position is made quite clear on my blog site at http://geoffgrover.blogspot.com and my website at www.geoffgrover.com.au.
It is possible today to mount a cogent argument for both the extremes, and produce stats that at first flush prove the point. However, it is the balanced, analytic dissertation by an independent professional , that is is widely distributed to the investment community that is important to impart an understanding of the issues.
The value in this balanced advice is illustrated by the strength of each sides particular arguments:
The Doomsayers
• Cite chronic overpricing of the Australian housing market - our prices are one of the most expensive in the world, general approval by the experts.
• Cite overvaluing – prices are currently 29% higher than the long term trend. With this in mind, any current plateauing is not guaranteed to go up in the short term or even move up at all.
• Cite massive household debt – no argument here!
• Cite affordability – now at its lowest levels and going down further with interest rate rises continuing- just chat to Glen Stevens from the RBA!!
The proposition - all lead to a “price bubble” and the prospect of a collapse in prices
The Property Spruikers (usually those with a vested interest)
• Cite chronic shortage of housing and no surge of supply in sight
• Cite strong employment and business growth.
The proposition - all leading to house prices taking off, Sunshine Coast to follow the southern states lead, quoting examples of Sydney and Melbourne now, jump in before it is too late approach- in this context, note the article in the Australian 8 April about Harry Triguboff of Meriton fame pouring cold water on such view as he describes “the furore over rising residential prices as ’nonsense”. ”The prices are only rising in select areas of Sydney and Melbourne and nowher else, he said”
Interesting also to note that in this weeks My Property Preview issue,leading Sunshine Coast property magazine, an article talking about this happening shows a graph purporting to demonstrate the correlation supporting this lag effect when it shows the Sunshine Coast has over the last few years surpassed Sydney and there is not much in it now.
The statistical illiterate have probably not heard of standard deviation analysis actually linking correlations with some impact rather than vague graph lines having some resemblance to each other – from memory, second year Uni Stat Method–(Melbourne University circa early 1960`s, memories anyone?)depends very much on what statistics are used and how interpreted, which is why advice from the statistical experts is very important.
Note also the very significant difference between use of the basic average figure and the median averages used in most analytical forums. Such use of different definitions, seemingly irrelevant, can lead to for instance, such startling differences in a mundane examination of the rate of increase in the Peregian Springs suburb, Sunshine Coast, 2009 over 2009, from average showing a growth 2009 of 2%, whilst the median average showed a a drop of 10% - Michael Matusik, the Sunshine Coast property guru, even has issues with use of the median as segment skewing distorts even these numbers, he says you really need like for like housing price changes)
To quote an independent professional such as Dr Oliver , Chief Economist from the AMP, a major fund player, in his analysis released March 2010 he suggests pretty much the above factors balance out and will lead to an Australian housing price increase of around 5% during this year. Remember that inflation (CPI is a different, although very similar measure) was 1.82% 2009, well down on the nine year average of 3.026%, although it is heading north to the concern of the RBA, so gains are not actually monumental unless compared to sticking cash under the bed.
Articles quoted here are available for download in full from my website at www.geoffgrover.com.aiu plus a host of other articles re the Sunshine Coast property market.
It does come down to, though, what everybody always recommends, do your homework on the specific area in mind to suit the investment criteria adopted, eg, capital growth or long term “cash positive” yield hold.
Article written by Geoff GROVER – April 2010
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