What is Living in an Old House Costing You?

Older houses have a certain undeniable charm. Yet, problems can lurk just below the surface of even the most magnificently refurbished properties.

If you’re not sure whether you’re going to buy new or old, but know that you want to save money wherever you can, read on.

By the time you get to #8 you'll be reconsidering whether you really want to take on the myriad of financial burdens and building challenges that come with an old fixer-upper.

 

1. Electricity for Days

While new houses are legally required to implement strict energy efficiency measures, these high standards haven’t always been the norm.

The older a house is, the less likely it is to have efficient electrical systems in place.

There are many ways an old house racks up additional energy costs. From a lack of insulation, through to old lights, undersized electrical panels that are constantly on the fritz, or old wiring with crumbling insulation that needs to be replaced. 

And, fixing these systems will do little to add value to your property. Electrical improvements are out of sight, and having a property with working and safe electrical systems is a basic expectation.

 

2. Expect Hazardous Building Materials Every Time

Chances are, if your property was built or renovated over 25 years ago, it was constructed using asbestos-based building materials. Asbestos – or “fibro” – isn’t dangerous if it’s left intact. But if you want to do even the simplest renovations or repairs on asbestos-based materials, you’ll have to hire a professional because it’s illegal to do the job yourself. And any renovator will tell you that safe asbestos removal is not cheap.

Additionally, if your house was built before 1970, lead paint was probably used. Like asbestos, lead paint is fine when it’s untouched, but if its flaking or chalking you’ll need to fix the problem ASAP, and make sure you take all additional safety precautions to limit exposure.

 

3. Renovations & Repairs are Harder & Needed More Regularly

Older properties are more likely to need work done before they’ll pass a building inspection.

Whether you need to fix an ancient DIY project that was never up to standard or standard features that have fallen into disrepair over time, don’t expect upgrades to be in the same price range as upgrades to newer houses.

Why? Aside from the hazardous building materials already mentioned, older houses are rarely square and level like new houses because they settle into the earth over the years. This means cash wasted on labourers having to fiddle around.

 

4. More Wood, More Problems

Warping wood can lead to windows and doors that don’t seal tightly and reduce overall heating and cooling efficiency. Rotten or warped wood components also allow pests into your home, and termites, wasps, ants, rodents and possums can all wreak havoc on your home’s structural integrity. Fixing these pest problems will cost you two fold – the price of extermination and then the added price of damage repair.

 

5. Foundation Problems - A Bottomless Money Pit

Older houses are more prone to needing potentially costly foundational repairs. Warning signs that the problems in a house run deep can include cracks in plasterboard, windows and doors that stick, flooring that is not level, bulges in the foundation walls or a noticeable lean.

 

6. Water Intrusion - Checked Your Shingles Lately?

Over time, a leaking roof can be the downfall of a house. Older houses that have shingled roofs are particularly at risk of water intrusion, as their shingles are out of sight and out of mind, so maintenance is often neglected.

If your home has water spots on the ceiling or exterior walls that could indicate another money sink.

 

7. Plumbing - Out Of Sight, Until It's Too Late!

Everybody loves a traditional home with a fresh bathroom, kitchen or laundry installation. Yet, any value added by aesthetic improvements to an old home can be destroyed by a host of common yet hidden plumbing problems. Inadequate drainage, underground pipes that are cracked and leaking, toilets with weak flushes and backflow issues, and outdated and inefficient hot water systems can’t be ignored.

And, worst of all, some of these issues aren’t easy to spot, so you won’t know what you’re up against until annoying minor symptoms later down the road lead to the discovery of a major plumbing issue.

 

8. Mould - The Hidden Killer

If plumbing issues or water intrusion have left the inside of your home wet at one stage, you will probably have issues with mould inside the walls. Aside from making a house smell musty, mould is a major health problem for a building’s inhabitants.

Eradicating mould and stopping its source will be expensive – but not as expensive as the liability you face if you leave your tenants or home’s occupants to live in a toxic environment! When it comes to mouldy houses, it’s a lose–lose situation for the buyer. It will cost a lot and you won’t get any financial return.

Are You the Best Real Estate Agent You Can Be?

Real estate agents work with their clients for weeks or even months on end, and they are ultimately responsible for what is often the most critical financial transaction most people will make in their lives. 

That’s why stories of a bad real estate agent can spread through a town like wildfire, while great agents often don’t get the recognition they deserve.

Are you an outstanding agent or a property professional in need of some help? Take a look at the qualities every stellar real estate agent possesses to find out.

Experience: Does Quality Trump Quantity?

When it comes to real estate, hiring an experienced professional is more important than it is in many other industries. Nobody wants an amateur learning the ropes on their life savings.

How much experience is enough?

As a rule of thumb, at least 5 years of experience is preferable.

However, agents with less time in the industry but more specific knowledge relevant to the buyer’s needs are just as valuable. Local game is important for both buying and selling, and it can be better to hire someone who has worked in the right area exclusively for 3 years, than someone who has worked all over the place for a decade.

In fact, being too popular can be a disadvantage. Potential clients can be put off by experienced agents that have a finger in every pie, but aren’t able to give them the attention they feel they need and deserve.

4 Skills You Can’t Survive Without

1. Negotiation: This is often confused with persuasiveness. Negotiation, however, isn’t talking people into doing what you want, it’s about making all parties to a transaction feel like they’ve “won”.
2. Communication: Arguably the most important of all the skills, this includes both verbal and written communication. Your communication – whether it’s emails, listings, forms, phone calls or face-to-face meetings – should be the best you’ve ever seen. Your responses should be timely and delivered via your client’s preferred method of communication. Finally, if you notice a nice touch to someone else’s communication style – adapt and emulate it
3. Tech savviness: With the vast majority of buyers and sellers reviewing potential properties online, don’t think your experience will compensate for being stuck in the marketing dark ages. You must know how to appeal to all demographics using a mix of both traditional and digital advertising.
4. Adaptability: Even if you have no formal education, you must be constantly adapting to the industry. It’s your job to know more than your clients, and be able to explain the ins and outs of property, from mortgages through to legal processes to industry practice.

The Ideal Real Estate Agent Personality

Follow the 80/20 listening rule: Aim for 80% of your communication to be listening and asking questions, and 20% to be talking to your clients. Agents who talk at people too much are off-putting, and shoot themselves in the foot when it comes to networking.

Perseverance not pushiness: The last thing anyone wants is an agent who gives up really trying and puts your property in the “too hard” basket after just a few weeks. Follow up all of your leads politely but firmly, and regularly communicate the outcomes to your clients.

Enthusiasm and motivation: You need more than just financial gain to be your motivation, otherwise when the going gets tough you’ll be tempted to quit. Discover all of your motivations and call on them to get you through the hard projects.

Presentation and attention to detail: Real estate agents need to be meticulous in everything they do – from presenting both themselves and the properties they show, through to dotting all the i’s and crossing all the t’s in the final paperwork. Sloppiness in this industry can cost clients thousands and irreparably damage your reputation (all it takes to put off future clients is one or two bad reviews!).

Don’t be the agent clients dislike the least – be someone people genuinely like and trust.

Interview Yourself: Questions You Must Be Prepared to Answer

Can you provide a detailed list of references? You are interviewing for a job every time you speak to a potential client, so always leave previous clients ready to speak highly of you.

What are your fees, what’s included and are you willing to negotiate? People need to know that, as their real estate agent, you know how to do business. After all, if you can’t negotiate with your clients, you won’t be able to negotiate for them.

What properties in this area have you bought and sold this year? People will be more confident in your ability to buy or sell on their behalf if you can give them clear cut examples of how you’ve done it before.

What will you do to help me get the best price? Smart clients know that agents can inflate quotes just to score a listing. Win them over with an explanation of your strategy before giving them an honest and realistic sale price expectation. And whatever you do, don’t lie. All it takes is an independent valuation for you to get caught out!

Future Proofing Investment Properties in Uncertain Times: 3 Basic Principles

Whispers of national recessions, market crashes and popping property bubbles have been doing the rounds for decades. Yet, many property investors continue to thrive, despite both real and speculated economic ups and downs.

What is the secret to choosing a property that has growing value, as opposed to a dead end investment that never pays off?

1. Research the Area’s Future

If you don’t take the time to get an understanding of both the zoning and future planning of your potential investment area, you could miss out on some incredible opportunities.

Take, for example, the recent case of a property for sale in Brisbane. Two years ago, buyers were put off from purchasing this property because of its consistently noisy neighbour - a very active live music venue.

However, few potential investors bothered to investigate the future of the music venue. If they had done their homework, they would have known that the venue was under a 2-year lease that was not, under any circumstances, going to be renewed.

The lease is now up, and the music venue is set to be demolished and replaced with an apartment development. Meanwhile, the savvy buyer of the previously unwanted property nearby is now enjoying the financial benefits of owning land that is now in a highly desirable location.

The bottom line: Areas are constantly evolving, and when you invest in a property you’re investing not in the present vicinity, but in its future surroundings.

2. Renovate with an End Game

Television shows like The Block, Renovation Rumble and House Rules all emphasise the importance of wowing buyers with the latest in home technology, style and design.

In reality, however, there’s no prize for having an investment property with all the latest bells and whistles if those extra trimmings aren’t what the renters or buyers you target want.

When it comes to renovating, prioritise improvements that are suited to the type of people likely to move to your area. Don't buy a pool when retirees dominate your neighbourhood or install a fireplace when you're trying to sell to a young family.

The bottom line: Stay on top of the market by renovating smart. Seek the advice of a property manager before you start on your renovations as they’ll be able to tell you what changes will directly improve your rental or resale value.

3. Fully Understand the Area

If size, features, location and price are your only considerations when purchasing an investment property, you could be setting yourself up for failure. Why? Because a property’s long-term value is largely determined by the rest of the neighbourhood and its inhabitants. Before you purchase, ask yourself the following questions:

·        What is the demographic of the local area – are your neighbours interested in and capable of increasing their own property values?

·        Are there signs of economic growth in the area, including increased local business activity, employment opportunities and investment in infrastructure?

·        Does the property you’re interested in have unique selling points, or is there many similar properties on the market that could lead to oversupply later down the track?

The bottom line: Look for properties located in neighbourhoods that are geared towards strong growth.

7 Advantages of Buying Off-The-Plan

Are you tossing up between purchasing an existing property and buying off the plan?

When most people start looking for a property they are already ready to buy. The quick-buy approach, however, is a recipe for investment disaster.  

Every purchase you make is an important addition to your portfolio, that needs to be carefully considered over time. 

Waiting for your next property to be built off-the-plan has many advantages you may not know about,  including:

1. Less Maintenance & More Rent

Newer properties are a lot more appealing to renters, so you’ll be able to lock in a firmer rental return. And, aside from luring prospective renters with a fresh looking property, you’ll also be able to save on maintenance costs and keep your tenants happy with a building that doesn’t need repair.

2. Fixed Price Customisation

Additions and renovations to existing homes very rarely go exactly to plan. It’s natural for refurbishing budgets to stretch and deadlines to get missed. When you buy off-the-plan, however, you can build the house you’ve always dreamed of with the assurance of a fixed price. You can choose what you want and have it ready when you want, from colours to fixtures, finishes, and even the location within the community or apartment building, it's up to you.

3. Energy Efficiency

These days, there are strict energy usage requirements in place for all new homes. Buying new allows you take advantage of all of the incredible advancements in modern construction technology from the get go. With an off-the-plan home, you won’t have to worry about paying for additional efficiency measures like insulation, energy saving lights, or a new hot water system, because your home will already be performing at peak condition as soon as you walk in.

4. Warranties

Brand new homes are sold with a seven-year builder’s guarantee. This covers structural and interior building faults throughout both the inside and the outside of the house.

5. Easy Market Entry for First Time Buyers

Many companies selling off-the-plan properties require lower upfront deposits – typically around 10% - and the balance at settlement. While construction is underway, first time home buyers have around 18 months to 2 years to save more money to put towards their mortgage deposit, moving costs or furnishing the house. And, if the property increases in value during this period, you’ll get some nice passive equity growth.

6. Planned Parking

While parking is a non-issue for many people living outside of major cities, in some areas, the availability of parking (and the likelihood of people parking you in on a regular basis) can make or break a buying or renting decision. New residential communities and apartment blocks are planned to accommodate all the traffic needs of their residents, so you won’t be stuck circling the block for a park every day.

7. Save on Stamp Duty

If you buy off-the-plan instead of purchasing a new home, you’ll reap some massive stamp duty savings (depending of course on which Australian state you live in). This is because state governments are attempting to stimulate economic growth through construction. Purchasing off-the-plan can save you thousands of dollars on your purchase, and coupled with a first home buyer’s grant, could make a serious dent in your mortgage.