All Topics / Help Needed! / Just signed a contract, what next????

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  • Profile photo of SamSavvaSamSavva
    Participant
    @samsavva
    Join Date: 2010
    Post Count: 12

    Hello everyone,

    I have just signed a contract for a currently tenanted investment property. I'm not sure what my next steps are…….

    What do i need to organize next? Insurance?? Anything else?

    Thanks

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi Sam

    Have you arranged finance? If not, do you have a finance clause in place?

    Same applies with building/pest – some buyers make their offers subject to satisfactory building/pest reports. 

    Take out insurance on the property if you've gone unconditional on the purchase.

    Generally speaking, the period between exchange and settlement involves getting finances sorted and the bank ready to settle.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of SamSavvaSamSavva
    Participant
    @samsavva
    Join Date: 2010
    Post Count: 12

    Thanks Jamie!

    Yes I am currently sorting my finance. The offer was placed subject to finance.  In regards to insurance what insurance do I need? Are there good insurance packages that cover me for unpaid rent, property damage and maintenance? 

    Cheers

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    There's lots of different landlord policies out there – shop around.

    Make sure you've also covered off building insurance – that's what's most important right now.

    Do a search on the forum for previous threads about recommended companies.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,190

    Make sure you get legal advice if you haven't already.

    Then insure asap – building only needed at this stage, but might as well consider a combo policy

    Consider tax issues with the payment of the deposit too, if not too late

    Get finance sorted

    building and pest inspections etc

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of ClaireRClaireR
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    @clairer
    Join Date: 2013
    Post Count: 16

    Have you arranged a building & pest inspection??

    Profile photo of SamSavvaSamSavva
    Participant
    @samsavva
    Join Date: 2010
    Post Count: 12

    Appreciate every ones feedback.

    In regards to a building and pest inspection I didn't get one done. Reason being i intend on developing the site in the near future. Its almost 900m2. There is a solid brick 60's home on the site with a year long tenant in place. I guess as long as it doesn't fall over anytime soon Im ok. I called the current property manager, she adivsed me that they havent had many maintenance issues of late. I hope i made the right choice blush

    Profile photo of ClaireRClaireR
    Participant
    @clairer
    Join Date: 2013
    Post Count: 16

    Sam, it is a very bad mistake not to get a building and pest inspection done, development plans can always change, if your spending hundreds of thousands on a house $450-700 is a very small amount to pay to make sure the house isn't termite ridden or has serious structural damage and if you are purchasing a house with a rental agreement in place the moment it settles you're responsible for maintenance and must maintain the property until the tenants lease ends.

    Also is does the current property manager work for the same agency that is selling the house? If so they have a massive invested interest in the purchase going through.

    If the contract hasn't gone unconditional and isn't conditional on building & pest you can still get the inspections done, you won't be able to pull the contract if anything unexpected comes up but you could decide that you can't find suitable finance.

    If you start reading a few of the well know property magazines out there you'll hear a lot of horror stories about not getting building & pest inspections done because of development plans.

    Also on another note I would have asked for a copy of the current tenants ledger prior to it going unconditional to make sure they've been paying rent – I would have put this as a condition of the contract. Don't go on verbal information from real estate agents. If there are issues with them paying it doesn't mean you are going to pull the contract as you've mentioned you're purchasing for development but you could renegotiate a small amount off the price.

    Also make sure you do all the other council checks & property searches to make sure you're going to be able to develop as planed.

    Profile photo of mattstamattsta
    Participant
    @mattsta
    Join Date: 2011
    Post Count: 604

    You will need building insurance, pest inspection, landlord insurance. Google around to find the insurance that is highly recommended. 

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    If you intend to develop the site, be sure to use a mortgage broker that has secured finance for others for similar sites several times over.  This is not the time to have novices on the team.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of oc1oc1
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    @oc1
    Join Date: 2012
    Post Count: 148

    Ain't that the truth!!

    Cheers

    Oscar

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    Certainly you should be insuring the property the day you sign the purchase.

    A good general insurance based Broker should be able to provide you with a suitable policy.

    Secondly if you intend to develop the property in the future then ensure your lender is happy with multiple properties on a single title.

    Be surprised how many are not great fans and you might be snookered.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Nigel KibelNigel Kibel
    Participant
    @nigel-kibel
    Join Date: 2005
    Post Count: 1,425

    Great advice Jacqui

    Many finance brokers only finance owner occupier homes  it is important that you use people who are specialists in the area of investment or development.

    There are a number of great brokers just in this post.

    Nigel Kibel | Property Know How
    http://propertyknowhow.com.au
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