The 10 Essential Questions Failed Property Investors Forgot to Ask…

property investorsMost property investors don’t buy right and never make it beyond two properties. Want to do better? All you have to do is ask:

1. What’s being built nearby?

New infrastructure projects can be beneficial or detrimental to your investment property. Find out what’s being planned and when it’s due for completion by logging onto infrastructureaustralia.gov.au. This has links to all state infrastructure planning departments.

2. What’s it worth?

A property’s selling price doesn’t mean it’s worth it. Invest in a property valuation – usually starting at around $350 – to assess the property’s true worth and then use that to negotiate the price.

3. What’s happening in the local market?

What’s happening in the local area can directly impact the property market – either negatively or positively. The best way to find out is to get out there yourself. It’s also wise to look at local demographics, crime rates and employment drivers in the area – take a look on the Australian Bureau of Statistics’ website (abs.com.au).

4. What’s the rental potential?

Just because an agent says a property will earn $400 a week in rent, doesn’t mean it will. Use property portals such as Domain and realestate.com.au to get a realistic idea of rents on comparable properties and ask an independent company to do a rental appraisal.

5. Capital gains or rental return?

Investors need to consider whether they are chasing rental returns or capital gain and in the case of multiple investments, it should be the latter.

6. Is there competition?

A market saturated with investors will reduce your chances of successful rental returns. Contact the local council to find out what percentage of homes are owner occupied and exercise caution in big apartment blocks.

7. What’s included in the title search?

Don’t assume everything is included in the sale. Make sure you identify what’s for sale – including parking spaces and storage facilities – and ensure this is reflected in the title search.

8. What’s the state of the accounts?

Properties on strata plans incur a monthly maintenance charge, which is deposited into a sinking fund and used to pay for the lifts, grounds and carpets. Ask to see the Body Corporate Disclosure (it’s a legal right), which outlines exactly what’s been spent and what works are planned.

9. Who’s your target market?

It’s essential you identify your potential tenants and know what they would be looking for in a rental property. If you’re looking at a property in a university town, you should be looking at a multiple occupancy homes near transport and amenities.

10. What’s the property management situation going to be? Every state of Australia has its own tenancy laws. These laws assign rights and responsibilities to both the landlord and the tenant. Failure as a landlord to fulfil your rights can result in severe financial penalties, so find out what you’ll be required to do.

Source : Life @ Home (5 November 2012)

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Ripple Effect: Pool Safety Compliance Flow Charts… !

pool safetyBuilding Codes Queensland has developed three flowcharts which can be used as a guide for compliance with pool safety laws in the following scenarios:

  • Sale of a property
  • Pool safety inspection – illustrates the rules that pool safety inspectors are required to follow when engaged to perform pool safety inspection
  • Accommodation agreements for properties associated with a shared pool

 A phase-in period applied to the sale and lease of properties with shared pools associated with long-term accommodation. If these properties were sold or leased between 1 December 2010 and 2 September 2012 a pool safety certificate must be obtained prior to 1 December 2012.  As of 2 September 2012, a sale or lease triggers the usual 90 day period.

To view the flowcharts visit http://reiq.informz.net/z/cjUucD9taT02NTE1NTQmcD0xJnU9NTAwODM0MDQzJmxpPTM1Mzg0NjQ/index.html.

 

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Commissioner Warns: Pay on Time to Keep Your Credit Rating!

creditThe Privacy Commissioner is urging Australians to be aware that if they don’t pay their credit card bills and loans on time, it may impact on their ability to get credit in the future. Recent reforms to the Privacy Act 1988 (Cth) that received Royal Assent on 12 December 2012 mean that credit reporting agencies will soon be allowed to collect new kinds of credit-related personal information.

This includes repayment history information – that is, information about whether people have made or missed the full amount of a consumer credit payment. From March 2014, credit providers can pass this information on to credit reporting agencies. However, the information can relate to payments made or missed from December 2012. Australians need to be vigilant about their repayment history now.

‘It is now even more important that people keep an eye on their credit card and loan statements when they come in and avoid missing or making a late payment. Changes to the Privacy Act mean that late or missed credit card or loan payments may be included on your credit reporting file and could affect your ability to obtain credit in the future,’ Mr Pilgrim said.

The move to more comprehensive credit reporting means that credit providers are able to get a more complete picture of an individual’s ability to repay a loan or credit card.

‘If you want to see what information a credit reporting agency holds about you, you can request a copy of your credit reporting file for free in most circumstances. If you believe that the information is incorrect then you should ask the credit provider or credit reporting agency to correct this’ Mr Pilgrim said.

In a recent survey conducted by the Energy and Water Ombudsman NSW (EWON), it was found that ‘credit repair’ agents are charging customers large fees to seek to remove credit default listings on a customer’s behalf. Customers were paying minimum average fees of $1000 to seek to have each credit default listing removed and 70% of complainants using these agents had multiple credit listings.

‘There are alternatives to using ‘credit repair’ agents. If people consider there is an error on their credit reporting file they should contact the company the default is within the first instance. If they are not satisfied with the company’s response, a person can contact the Office of the Australian Information Commissioner or a relevant Ombudsman service, such as the Financial Ombudsman Service or the Telecommunications Industry Ombudsman whose services are free. There are also consumer credit legal centres that can help’.

The OAIC has produced a fact sheet for individuals to understand the changes to credit reporting – particularly repayment history information. OAIC Privacy Fact Sheet 16 Credit reporting – Repayment history information is available on the OAIC website: http://www.oaic.gov.au/publications/factsheets.html.

Source: www.oaic.gov.au

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No Pool Safety Certificate – No Renting or Sale…

pool safety certificateLessors must ensure their pool fence is compliant with the current standards that were introduced on 1 December 2010.

A full list of the changes can be found on the Department of Housing and Public Works site.

Lessors must ensure that before they enter into a new or renewed lease for a property with a non-shared pool (private house), they must get a pool safety certificate.

For shared pools (where residents from 2 or more dwellings use the pool), the owner must give the prospective tenant a copy of the pool safety certificate.

If there is no certificate in effect, before entering into the lease the owner must give a Notice of No Pool Safety Certificate (Form 36) to the tenant, the body corporate, and the Department of Infrastructure and Planning.

All pool fences in Queensland must meet the current pool safety standard by 30 November 2015, or earlier if the property is sold or leased.

The Pools Safety Council recommends pool owners regularly check that the gate latches automatically and that the gate’s latching device meets the Australian Standard.

To find out if your pool meets the current pool safety standard, a checklist and other resources are available at www.hpw.qld.gov.au.

Pool owners should have their pool inspected and certified by a licensed pool safety inspector. To find a local pool safety inspector, pool owners can search the Pool Safety Register at www.hpw.qld.gov.au/construction/BuildingPlumbing/PoolSafety.

For more information about Queensland’s pool safety laws, contact the Pool Safety Council on 1800 340 634.

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10 Things You MUST Know Before Refinancing

refinancingThere’s more than one way to tie a shoe, and many more ways to botch a refinancing concern. We reveal the top 10 mistakes refinancers make:

1.Automatically refinancing with your current lender without shopping around
2. Assuming lower rates will automatically save you money without considering overall cost versus savings
3. Procrastinating over applying for a home loan while waiting for interest rates to drop. Don’t gamble on better future rates.
4. Failing to get your new rate locked in writing
5. Not doing your sums. Decreasing your interest rate by at least 0.75% to 1% will save you about $100 a month on a $150,000 mortgage
6. Switching loans or lenders without clarifying whether the total costs (including establishment fees, legal fees, stamp duty fees, ongoing fees) are outweighed by the savings in interest
7. Not having a lender or broker evaluate your credit rating and regularly revise your financial position
8. Not knowing the true cost of refinancing. Make sure your lender provides you with written statements on application fees, deferred establishment fees, or break costs on fixed loans.
9. Falling prey to the lure of honeymoon rates, which ultimately revert back to their original or higher rates at the end of the introductory period.
10. Taking out money to pay off credit cards with no intention of changing spending behavior, racking up further debts while drawing out more home equity. Don’t turn what could be a short-term debt into a long-term debt.

 

Source : Your Investment Property (27 November 2012)

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