Forum Replies Created
What about brick edged coloured concrete. Looks good and is cheaper than many other types.
Wylie
We manager our IPs, all in the same suburb as ours. I am happy to help with any queries, but have never had to take over from an agent. Perhaps call the RTA and ask them whether Dr X is right.
RTA is very helpful and if they can’t help you, your solicitor should be able to.
Good luck
Wylie
We also watch this show and I have to say it in no way glamourises the process of renovating. Quite the opposite.
I think they are really clear about the costs. The fact that at the end the renovators make a profit (or not) before tax cannot be made any clearer because everyone’s tax position is different.
Sarah also does spell out at times that had the buyers done nothing, they still would have made a good profit because the market had moved.
I think it is very realistic, but having never done a flip, don’t know about doing it here.
If you want to do it, and don’t want tenants in to sell, buy a rundown place, rent it out for six months or a year and then renovate. That way you have passed the magic twelve months and can half the profit for capital gains tax purposes.
By the way, I am always gobsmacked at how cheap kitchens and bathrooms are over in the UK and that owners often do their own plumbing and electrics.
Wylie
Good grief!!
I often watch in amazement at Property Ladder and wonder about the homeowners taking on the plumbing and electrical work themselves. Plumbing can lead to a mess at worst but electrical could mean bye-bye. I suppose with the money they save, their family could buy a nice burial plot.
Wylie
I have to disagree that sellers are greedy. Would you not want the best price for your house?
I also disagree that sellers chose their agent simply because they give an inflated price estimate. I don’t think all people are that one-dimensional or so easily have the wool pulled over their eyes.
Unlike the bad old days, my understanding is that these days, agents actually have to back up their appraisals with evidence of previous sales. I know there are some naive sellers around, but I think you have to give people more credit to be able to see through some of the obvious “pick me” tactics that some agents use.
As for punishing the agent for selling below the estimate…. well the agent cannot sell below the estimate. The vendor signs the contract, not the agent. If you vendor doesn’t like the price, they simply don’t sign the contract.
Of course, I do know some sellers are unrealistic, but if that is the case, the agent will not try too hard. I have heard many stories (and seen for myself) about vendors who start with a really high price, and after a few months of slowing reducing the asking price, they decide the agent is no good. They choose another agent. By that time, they usually also realise their starting price was too high and they are more reasonable. The next agent they sign up lists the property for the more realistic price, sells it, and the vendor thinks the agent is fantastic because they actually sold the house.
If the house had been priced realistically, it would have sold with the first agent. This is very frustrating to an agent, but very common.
Wylie
I think you will find agents inflate the estimated price simply to “buy” the listing. It is nothing to do with their self-esteem. Many people will go with the agent who tells them their house is worth $600K if the other agents are saying $550K. The $50K difference is nothing to the agent.
Of course, once the vendor is signed up, they then start “crunching the vendor” by telling them the “feedback is that your house is only worth $550K”. I have seen this happen countless times via a family member who used to be an agent. I have quite a few stories about agents that make me squirm, some of which have happened to me.
It is the same mentality of buying the cheapest article – it is not always the best. There are many honest agents out there. If you find one, hold on to them because there are quite a few sharks out there too.
What these agents should realise is that word of mouth is THE most important tool they have. A happy vendor will tell two friends, etc etc. A cranky vendor will probably tell at least ten others.
Wylie
If your agent is prepared to put in the low offers, go ahead, but beware of two things –
1. Agents will get sick of wasting time on offers that they believe have no chance of being accepted.
2. Many vendors will be so annoyed at your lowball offer that they would probably sell to the devil rather than negotiate further with you.
I know of agents who refuse to write up a contract for offers that they know will not be accepted. I like to think my initial offer is a starting point, and I fully expect the vendor to make a counter-offer. Some vendors just refuse point blank to make a counter-offer if they are offended by a lowball offer. It is a risk.
If you are prepared to keep trying, you might hit the jackpot, but just be aware you might not be popular and your agent might not bother calling you with any listings because of your lowball tactics.
I have seen it first hand and a family member who used to be an agent has told many similar stories. People are funny creatures when it comes to money and the perceived value of their house.
Good luck.
Wylie
I have read in other answers on this forum that you can buy a kit for about $10 or so from newsagents (or maybe it was post offices) in some states. I have always wondered why people don’t download them for free, but maybe RTA Queensland is just generous. Could this buying from a newsagent be the answer for NSW forms?
Wylie
RTA is Residential Tenancies Association. I don’t know how to put a link but a Google search will bring it up. I don’t know where you are but I assume each state would have a similar site. They explain what you need to do at the start of a tenancy, what forms must be given to tenants etc. You download the forms, fill them in on the screen and print them out. It would pay to sit down and have good look at the appropriate site for your state, to feel comfortable with the requirements.
As far as being like insurance, not needing it until something goes wrong – we certainly have had things go wrong, but I read quite often on this forum about things going wrong with managed properties as well. We have had some issues, and they can be stressful, but I feel very much in control and I know what is going on with my tenants.
If you have tenants already lined up, why not save yourself lots of money. If you feel down the track that it is too much work, hand it over then.
For us, we advertise, put a tenant in and generally leave them alone. We don’t do inspections, with the exception of the rare occasions that things go pear-shaped. However, we do live nearby and can do the occasional drive past check. Our houses are in good condition, so we only have to deal with the occasional plumbing issue or similar.
I would never want to pay 8% or so for a manager to do as little as we need to, but I fully respect those who do. I grew up with my parents having IPs so it is second nature and I understand that others feel differently.
Wylie
I manager our IPs myself. I get all the forms and information from the RTA website. We live close by so it is simple for me. I have had very few problem tenants over nearly 30 years and have heard many stories about slack PMs, so why not save yourselv some money.
I put any receipts during the year into a folder for that particular house and at the end of the year I divide them into some sort of order and give them to my accountant with loan interest amounts and rent received – very simple. I don’t use any software.
Wylie
Only thing I can think of is that you could give a solicitor a phone call. They will tell you quickly whether your idea has worth.
I would think the big company will tell you to “go whistle”.
Last year we took the same type of risk, got owners permission to start renovating and the more we spent, the more anxious I became about the “what if settlement doesn’t happen” scenario.
We had our finance in place and our contract was unconditional but I still didn’t like the feeling of ripping out walls and the bathroom and spending money on (technically) someone else’s property (not to mention the hours of blood, sweat and tears we put into it). I don’t know if I would do such major work prior to settlement again, but we were heading to the US the day after settlement and the quiet Christmas period was straight after that and we needed to get it renovated so we could get some cash flowing as soon as we could.
I would guess that you probably have no claim on the money and may need to look on it as experience and a lesson, but it is worth asking. You would probably have a better chance if it was a private vendor, but big companies are only interested in the dollars (in my opinion).
Perhaps they would reimburse you some of your costs (but don’t hold your breath).
I really feel for you but don’t get bitter if the answer is one you are not happy with because it will eat away at you. Just pick youself up and move onto the next one and rack it up to experience. We all do things that don’t work out or that we regret, and none of us have the benefit of hindsight.
Good luck, Wylie.
Hi Lena.
With our latest purchase we asked our solicitor to seek a letter from the vendor’s solicitor to allow us in to begin renovating in the month leading up to settlement. We were flying to the US the day after settlement for two weeks and wanted to make a start so most of the work was done and we didn’t have it all ahead of us straight after a big holiday.
Our solicitor suggested we approach the vendor privately as she said in her experience, once she asks the vendor’s solicitor formally, nine times out of ten they say no.
We asked the real estate agent to approach the vendor who was more than willing to sign a letter allowing us entry and keys and visited us a couple of times during the renovation and at the end.
Of course, once we had started ripping out walls and pulling out bathrooms, and spending our own money on the house, I got a little nervous in case there was a hitch in the settlement, but all was good.
So my suggestion is to get a letter direct from the vendors or via the real estate agent rather than try to get two solicitors to agree.
Good luck, Wylie.
For us (in Brisbane) a house having had termites at some stage of its life is no big issue. As long as it has been treated and there is minimal repair required, we are happy.
Also, at least with Queenslanders you can get underneath and see the damage yourself. Of course, too much damage would mean big spending to repair, but the last house we bought had a few floorboards eaten out enough that we had them replaced when we had the boards polished. Cost us a couple of hundred extra. The termites were long gone after having been treated in the past.
We have a fantastic pestman who we trust completely and he checks anything we are unsure of.
I would not have a full termite treatment done prior to putting a house on the market if there is no evidence of a problem. A comprehensive pest report saying the house is clear should be enough. Why pump chemicals around if there is no need?
Wylie
I have heard from real estate agents that battleaxe block properties are similar to busy road properties in that they are harder to sell, and buyers will pay less than a comparable property in a quiet street with a street frontage.
However, having said that, they should also be cheaper to buy so as long as you pay less than for a similar property with a frontage, and as long as you keep in mind that when it comes time to sell you will have less people prepared to buy, you should be okay.
We plan to divide a block into a battleaxe arrangement, and know that we will be faced with the same issues down the track, so will bear this in mind when we do our homework.
The other issue is that with battleaxe blocks there are more stringent privacy and overlooking issues if you want to build but a good architect or designer should be able to design specifically for your block and overcome these issues.
Wylie
Woodrow –
Can you actually read? I was asked to clarify an earlier post. I am simply providing an answer.
Read the whole thing before you put your mouth in gear.
Wylie
It is possible some insurance companies may take the view that if your house is worth $200K and you insure it for half its value, they can decide to pay you only a percentage of the insured figure. I suppose they assume you are prepared to carry some of the risk yourself. You may only get $50K.
I don’t know how many companies do this, but I do know that it is a real risk with under-insuring your properties. Not a risk we are prepared to take so we make sure we fully insure our properties, even to the point of slightly over-insuring them to be on the safe side.
Don’t forget to add into your insurance calculations the fact that clearing a burned house costs money and you need to add that on as well.
Wylie
As it is not your money, I would keep quiet but talk privately with your girlfriend about your own plans. Could you get her to read some of the posts on this forum and Somersoft to help her to understand the way property works.
What her father does with his money is his business and I don’t think you should place yourself in a position where you have an argument with the other most important man in her life. He may think you have some knowledge or he might think you are a prat. In my opinion it is not worth rocking the boat.
My father-in-law never lost an argument, even about things someone else knew lots about and that he knew nothing about. I soon learnt not to waste my breath trying to convince him about anything, even when it was something that I knew to be right.
For example, he argued until he was blue in the face one night that if you insure your $200K house for $100K and it burns down, the insurance company will pay out the full $100K. I tried to explain about under-insurance but HE KNEW BEST. I worked for a bank at the time and my brother was in the insurance area of the bank, but what did I know? You get the picture….. He knew everything.
Just keep your girlfriend interested in your ideas but don’t alienate her or her father if possible. Who knows, one day he may be your father-in-law.
Wylie
I would be inclined to tell them you will call it even, your damaged covers for their damaged shirt. Claim what you can on the covers either under insurance or write the couch off on your tax return – and then give them an old sheet to cover the couch with.
Wylie
[thumbsupanim]
I agree with the above comments. It is his wish to have broadband and it is his cost. I do, however, also agree that if it meant getting the house rented then $250 is less than a week’s rent, and could be worth spending as an enticement.
However, as he has already moved in, he should be on a lease and is going to stay for the term of the lease so I would tell him you are not prepared to pay for the installation.
Wylie
Could I suggest if you go down this track, that having visited a few of these types of facilities in Brisbane there are two things (in my opinion) that are essential –
1. Glass partition between 59 excited children all yelling at each other at the loudest possible level and the parents, who are trying to chat to each other without yelling.
2. Decent coffee and food.
One centre in Brisbane I visited had neither a partition nor good food and I was not happy being there. If I hadn’t had children who were having the time of their lives, I would have been out of there much earlier. After all, you have a captive audience in those parents. You need them to want to stay and spend.
I know with the one that had no partition and only junky fatty food, I had a headache after half an hour and couldn’t wait to get out of there, but knowing I was there for the long haul, only had yuck food and dishwater coffee to tempt me …. arghhhhh!!!.
Wylie
