Three More Years of Rental Increases Predicted

The Real Estate Institute of Australia (REIA) has recently published nationwide data indicating that rents have increased by 25 % over the last 3 years.

The cause of rising rentals has to do with the lack of new home construction and cautious investors continuing to put off building more investment properties.

According to property commentator Michael Matusik, rents will continue increasing over the next 3 years. Matusik’s research shows that 25% of the average renter’s income went into paying their rent in 2004. Today that figure has advanced to 26% of their income.

There is no doubt that some renters are doing it tough, but the report suggests that, generally speaking, renters can afford the increases.

The most recent figures of the REIA indicate a vacancy rate in all capital cities averaging 1.9% for the September quarter. Noel Dyett, president of the Institute comments that a vacancy rate below 3% is regarded as undersupply.

To gain perspective on these figures, one need only look at the REIA’s figures for the average vacancy rate around Australia for the past twenty years. That figure is 3.6%. The 1.9% current figure has been in effect since March 2005.

However, if rentals are set with unrealistic expectations, properties will sit longer on the market, costing the owners precious lost rental income. Generally speaking, it’s not worth the effort to try and recoup an extra $10 or $15 per week when you figure the costs of a week or two’s vacancy.

If you have a question about real estate, or would like assistance with property management, feel free to phone me, Noel Thompson Principal Professionals Logan Lifestyles at either Waterford 3299 7733, Browns Plains 3800 4000 or Springwood 3808 5544

PROFESSIONALS AGENT WINS TOP AWARDS

Professionals Logan Lifestyles would like to congratulate their Browns Plains office.

Winning top listing & settled sales office at the Queensland Quartly Awards Ceremony on the 13 May 2009.

Congratulations also goes out to Gayle Thompson for taking out the 4 Million Dollar Award, Top 10% Salesperson Award (sides), Top 10% Salesperson Award (brokerage).

Mark Sutton for his Top 10% Salesperson Award (sides).

Sarah Bey, Office Administrator, for her Shining Star Award.

BUYING AT AUCTION

On the actual day of the auction you should arrive with plenty of time to spare in order to make one last inspection of the property. In doing so you will have time to check the contract of sale, the vendor's statement and the auction rules.

If you have any questions about how the particular auction will work, be sure and get clarifications from the agent representing the buyer. One key principle in the whole action affair is that if property is passed in below the reserve (minimum asking price of the vendor) then the owner through the agent or the auctioneer will first negotiate with whom ever is the highest bidder on the day.

So if you are attending the auction and are interested in bidding for the property and you hear the auctioneer announce the property is going to be passed in, then it is a good idea to position yourself so that you are the highest bidder. That way you get first crack at the negotiating table afterwards. You need to do this before the property is actually passed in, because once that occurs it's too late to bid.

No auctioneer can reopen the auction to accommodate a late bid and override someone else's position as highest bidder.

Once the after auction negotiations open up, you either accept the owner's asking price or the owner has the right to end the negotiations then and there to start negotiating with yet another buyer.

If you have a question about real estate or would like assistance in locating a property feel free to phone me.

Noel Thompson, Principal Professionals Logan Lifestyles.

Waterford 3299 7733 Browns Plains 3800 4000 Springwood 3808 5544

http://www.llr.com.au

BUDGET FOR EXTRA COSTS WHEN PURCHASING A HOME

When purchasing a home be sure to account for all the costs beyond the purchase price itself.

HERE IS A SUMMARY:

• Stamp duty: This is a compulsory tax charged on any exchange of property at the time of purchase
• Legal fees: Generally a conveyancing firm or solicitor will need to be hired to analyse and oversee all documents. A title search is always needed to assure outright ownership and that there are no legal encumbrances.
• Building & pest inspections: Necessary inspections to identify all potential defects in the building(s) involved as well as in the invironment and to look for termites and other pests.
• Council and water rates:
• Mortgage insurance: This may or may not be applicable depending on the funding source and their requirements.
• Home & contents insurance expenses: Generally you will want to be fully covered for fire, damages and theft.
• Moving expenses: This covers the removalist fees.
• Disconnection & re-connection of utility services: This includes telephone, electricity, gas & internet connections.
• Strata levies when moving into a strata unit: These are quarterly assessments for property maintenance and leisure services.

There are concessions available for First Home Buyers on some of the above. A $14,000 grant is offered throught state governments to counter the effects of the GST on home purchases. Plus, there concessions for stamp duty.

If you have a question about real estate or would like assistance in locating a property feel free to phone me.

Noel Thompson, Principal, Professionals Logan Lifestyles

Waterford: PH 3299 7733 Browns Plains: PH 3800 4000 Springwood: PH 3808 5544

http://www.llr.com.au

HOW TO SUBMIT AN OFFER

A real estate agent must present all reasonable offers to the owner. The agent cannot pick and choose amongst the offers favouring one particular buyer.

Just because a vendor has your offer and is giving it serious consideration does not mean other offers are not coming in simultaneously. Unfortunately for the buyer this means that someone else can top your offer in the interim.

One move to counteract these factors is to make your offer with a date of expiration. This could vastly aid your cause, because it gives a sense of the imperative and forces the vendor to make a decision.

When making an offer you can also make it subject to various conditions. This favours the buyer, but, remember the more conditions you place on the sale, the less chances you have of your offer being accepted.

Most importantly, offers are not legally binding until both the buyer and the seller have signed a contract note (or contract of sale) and they have been notified that the other party has accepted the offer.

The contract must contain details of the property. This should always be double-checked and include price, deposit and settlement.

While the seller is not under any obligation to accept your offer, it still remains the case that a written, unconditional offer with a deposit cheque attached can be very persuasive in helping secure the purchase.

If I can be of any assistance feel free to contact me.

Noel Thompson, Principal, Professionals Logan Lifestyles

Waterford 3299 7733, Browns Plains 3800 4000, Springwood 3808 5544

www.llr.com.au

TIPS FOR BUYING THE RIGHT PROPERTY

A simple rule of thumb for investors is that you most often make your profits when you purchase the property, so buying at the right price becomes paramount. By focusing your research and time on a particular geographic locality you can develop an "investment comfort zone".

The first thing to do is to choose a geographic locality in which to concentrate your study of the market. You might choose an area of high capital growth, or maybe just your own neighbourhood. The best places for investment have good rents, low vacancy rates and are popular to live.

You will also want to choose an area you can afford to invest in. No point in looking at areas in which you cannot afford to buy.

Now that you have chosen your area the next thing is to develop your expertise in that same locale. Study price ranges, rental market data including vacancy factors, plans for potential infrastructure additions, planned developments, employment statistics and trends, school locations, transport, and local council matters. The latter includes town planning and zoning rules and regulations.

The next step is to acquire investment skills such as negotiating techniques, knowledge of finance, tax laws, and risk minimisation. All this will aid building an investment portfolio.

Finally is the ability to act when the right property arises, because with all the above, bargains will start to stand out to you.

If you have a question about real estate or would like assistance in locating a property, feel free to phone me.

Noel Thompson, Principal, Professionals Logan Lifestyles

Waterford 3299 7733 Browns Plains 3800 4000 Springwood 3808 5544

http://www.llr.com.au

SELLING POINTERS

If you are planning to sell a property, here are some useful tips.

Be sure to promote your property. Make sure you invest sufficient funds to allow your agent to do their job properly. Keeping your property a secret will hinder your chances of success.

Plan to use your funds to promote your property. Do not rely on agent-paid advertising. Skimping on advertising monies may come back to haunt you in the form of a lower selling price.

Let your agent tell you the best mix of newspaper, proper signage, internet, window cards, open inspections etc. A co-ordinated mix of strategies works best and your agent has all the experience of their other properties.

Maintain flexibility. Do not stick to your guns unnecessarily. If your marketing strategy is not working, then chance tack in one or more areas.

It is extra important to realise that an early offer in your sales campaign that's reasonable will often prove to be your best offer. Plus if you are buying then it will enable you to move more quickly to buy back into the same market, so you can also get a similar fair price.

You must also stay in tune with the market. While you cannot control it, you can at least follow it. Properties that are priced right always sell no matter what the market conditions happen to be.

If you have a question about real estate, or would like assistance in locating a property feel free to phone me.

Noel Thompson, Principal Professionals Logan Lifestyles at either:

• Waterford 3299 7733
• Browns Plains 3800 4000
• Springwood 3808 5544

http://www.llr.com.au

THERE ARE FOUR REAL ESTATE PROFIT DRIVERS

There are 4 ways to make money out of property investment:

• PASSIVE APPRECIATION: This occurs when you purchase a well-positioned property with a good location and it increases in value along with the general property market over time. History has shown that good properties in Australia double in value every 7-10 years. Hence property is best viewed as a long-term investment.

• ACTIVE APPRECIATION: This happens when you take an action to increase the property's value. Maybe you add a granny flat or redevelop it in some way.

• RENTAL RETURN: This is the most common source of return on investment, since it provides cash flow. But it is important not to place too much emphasis on rentals, remembering your overall investment return.

• TAX BENEFITS: Property is probably the best investment for tax benefits due to negative gearing and depreciation allowances.

It is important to keep all four of the income producing qualities in mind when investing in property. One reason is that well located residential properties have inherently high growth rates. This means that the rental returns are always going to be low yielding on this type of property.

Real estate investment should be viewed as a long term investment for this very reason, but, at the same time, it is one of the most secure.

If you have a real estate need or question, feel free to call me:

Noel Thompson, Principal Professionals Logan Lifestyles at either:

• Waterford 3299 7733
• Browns Plains 3800 4000
• Springwood 3808 5544

http://www.llr.com.au

THE FEDERAL FIRST HOME OWNER GRANT

All first home buyers should keep in mind the Federal Government's $14,000 grant, it will substantially defray legal costs or, alternatively, can help compose the deposit.

To qualify you must be an Australian citizen or permanent resident who is buying or building your first home. If you have a spouse or defacto, they must also be a first home buyer as well or you will not qualify.

The other main requirement is that it be your principal place of residence and at least one of the applicants must occupy the residence for the first 12 months.

If you apply and are accepted, the grant will be electronically transferred directly to the nominated bank, credit union or building society when:

1. The buyer becomes entitled to possession of the home under a contract to purchase (usually at settlement)
2. If the first home buyer is building their home and the building is ready for occupation as a place of residency.

In the case of the second option, most lenders are authorised by the State Government to administer the scheme on their behalf and can organise earlier disbursements.

Some lenders will accept the grant as part or even all of the deposit, but many will want to see an additional 5% or genuine savings as a deposit.

In any event, the Federal assistance is most welcome and every State has some additional assistance as well.

If you have any questions about real estate or would like assistance in locationg a property feel free to phone me:

Noel Thompson, Principal Professionals Logan Lifestyles at either:

• Waterford 3299 7733
• Browns Plains 3800 4000
• Springwood 3808 5544

http://www.llr.com.au

Should your First Purchase be an Investment Property?

If you are wondering whether your first property venture should be an investment property or a home, I suggest you start with your own home.

To get started, you may have to buy into a less expensive suburb or area, but at least you can get a hold on the property ladder. The government will assist you with the Federal First Home owners grant and often enough a State Grant as well.

If your home need a bit of work done, that is fine because you can bring up the value. The same if you are buying into an up and coming area that is a bit less expensive.

After a year or two you will find your property will most likely have grown in value. Plus you will have been making steady payments which will lower the amount owed. So your equity in the home can be a springboard for funding your first investment property. (Equity is the amount of home you own outright less the mortgage.)

When you get around to purchasing your first investment property it will be easier than paying off your home loan, because, if you set up the financing and ownership correctly both the tenant and the tax man will assist you in making your mortgage payments. The tenant's contribution will be their rent and the tax man will help through depreciation tax benefits.

If you have a question about real estate, or would like assistance in locating a property, feel free to phone me, Noel Thompson Principal Professionals Logan Lifestyles at either Waterford 3900 7733 or Browns Plains 3800 4000 or Springwood 3808 5544

http://www.llr.com.au

THE CASE FOR SOLAR POWER

As Government subsidies mount there is a growing case for solar power, HERE'S HOW SOLAR POWER WORKS.

There are two basic ways of harnessing solar power for domestic use.

The first is to use it to heat your water. The second uses photovoltaic cells, known as solar panels to convert sunlight into electricity for powering lights and domestic appliances.

The amount of power generated is directly linked to the area covered by the solar panels.

The trick to solar power is to store the energy so it can be used at night. In rural areas where there are no power mains a battery system is needed. But in urban areas with power mains you can exchange electricity with the power grid.

The best part is watching your electric meter go backwards. This is when you build credits, then at night it goes in reverse. In this way, a household can use the power grid like a giant battery and the whole community benefits from having solar power generate part of its electricity.

The best part of investing in solar power is that it will always be a welcomed feature of the property and it insures against future price rises in electricity.

As time passes, government will keep raising its subsidies as well, making your investment more and more lucrative.

If you have a real estate need or question feel free to phone me, Noel Thompson, Principal, Professionals Logan Lifestyles on 0418 517 525 or call into our friendly offices at Browns Plains and Waterford for immediate assistance.

http://www.llr.com.au

MAKE RETIREMENT EASIER

Owning a Home makes Retirement Easier

When condiseration comes to retirement, one of the problems with renting all your life is the temptation is so great to spend your money on lifestyle. Then when it comes time to retire not only do you need to think about daily spending requirements and medical bills, but you also have the monthly rent to pay. Worst yet, the rent keeps going up along with inflation, NOT A PRETTY PICTURE.

Renters don't have the fallback of a mortgage payment for savings. So they need a plan to fund their retirement likestyle and not just their lifestyle while working. Unfortunately, retirement is the one area where renting instead of buying is really tested.

People tend to think that compulsory super will make for a confortable retirement but this is a misconception. According to Ross Clare, the research director at the Association of Superannuation Funds of Australia the average earner with 30 years of continuous full-time work ahead of them will amass only $180,000 in today's dollars by the time they actually retire.

Compare that with the latest Westpac ASFA Retirement Standard which states that a single retiree needs $36,141 a year for a comfortable retirement and couples require $47,371 a year. In order to accrue an income like this, singles need to amass $500,000 as a nest egg and couples an extra $50,000 on top of that. This figure does not even include your yearly rent if you don't own your own home.

If you have a real estate question or need feel free to phone me, Noel Thompson, Principal, Professionals Logan Lifestyles on 0418 517 525 or call into our offices at Browns Plains or Waterford for a friendly chat.

http://www.llr.com.au

A PROPERTY ACQUISITION STRATEGY

First look for a property that is well located and can be acquired at a good price. Now go to your financier and get a loan for 80-90 percent of the value of the property.

The next step is to add value to the property by renovating it or refurbishing it or by redeveloping the property (say, by getting developmental approval for multiple units on the site).

You have now added value to the property and if renovated or refurbished you can then increase the rent collected since you have improved the property.

With a tenant paying better rent and a now improved property you then can get your property re-financed, because it will bring in a higher evaluation. This may have to wait for a period of six months, however, before banks will acknowledge the increase.

Now you can take out the extra monies left over from paying off the first loan and use it to put a deposit on your next investment property.

One idea is never to sell. That way you get the benefit of the long-term capital gain.

By re-financing and recouping your deposit and most if not all of your refurbishment costs, you are in effect using the same money over and over again to buy and develop a series of properties.

Servicing your mortgages is your main concern but because the properties are improved along with higher rents being achieved and good depreciation allowances you will have a lower net cost of ownership.

If you would like to view some investment properties feel free to phone me, Noel Thompson Principal of Professionals Logan Lifestyles on 0418 517 525 or call into our offices at Browns Plains or Waterford for immediate assistance.

http://www.llr.com.au

BUYING BEFORE AUCTION

You don't necessarily have to wait for an action to buy if you're certain it's the right property. One way to avoid all the angst is to try and buy the property beforehand.

Of course you will need to do your homework and line up your finances. You may want your solicitor to check out the contract of sale to make sure everything is correct. You should have a professional building and pest inspection done on the property and most importantly to make a serious bid you will want to already have your financing lined up.

This pre-auction strategy is particularly useful if you think there will be great interest in the property. But be prepared to offer a fair price. You won't achieve a bargain but you may avoid having to bid against 3 or 4 other interested parties.

Remember everything is negotiable.

You don't have to necessarily accept the seller's terms. You can ask (but may not receive) for amended terms. At least this way you can gauge the level of interest and the degree of competition by the seller and their agent's reaction. If you ask for a longer settlement for instance and the seller refuses it might indicate there is strong interest. On the other hand if they readily agree you may be in a stronger position to negotiate further.

If you have a real estate interest or need feel free to phone me, Noel Thompson Principal Professionals Logan Lifestyles on 0418 517 525 or call into our friendly offices at Browns Plains and Waterford for immediate assistance.

http://www.llr.com.au

SUCCESSFUL PROPERTY INVESTORS

Most successful property investors over the long term invest safely without speculating. They buy quality properties in good locations and hold them over the long term, allowing them to grow in value.

The main reason they purchase property in the first place is for strong capital growth. These types of investors rarely sell their properties. When they need money they simply refinance their investment properties as the equity increases.

It is probably the golden rule of property investing to buy the best quality property you can in the best location you can find. You then purchase within your budget and never sell the property.

Another successful trait of property investors is to buy at the right time in the property cycle. The end of a property slump is of course the ideal time to purchase because it is soon followed by an upturn in property values.

Purchasing at low prices kick starts and investment. One rule of thumb for property investors is not to overpay. You should buy at or below "FAIR MARKET VALUE".

There are still bargains to be had in today's market and any further negative global influences will flush out even more nervous sellers. Long-term investors can then take advantage of such short-term upsets to establish themselves for the next segment of the property cycle.

You can then add even more value to your property purchases by renovating or redeveloping your properties.

If you have a real estate need or question feel free to contact me Noel Thompson, Principal Professionals Logan Lifestyles on 0418 517 525 or call into our offices at Browns Plains and Waterford for a friendly chat.

http://www.llr.com.au

THE PROPERTY MANAGER'S ROLE IN CHANGING TENANCIES

One of the primary roles in a property manager's job is to oversee the changing of tenancies.

A property manager needs to be alert to the need to reduce tenant turnaround time; in other words to reduce the amount of time that a tenanted property is vacant.

Another primary task of the property manager is to make sure the property is adequately cleaned by the vacating tenant and that it is satisfactorily prepared to receive a new tenant.

When tenant changeovers do occur it can present an opportunity to do deferred maintenance such as painting as well as doing a thorough clean. You always want your property to be well maintained and well presented in the marketplace.

As property manages, we also need to verify that all correct keys are returned and to do a vacating inspection on behalf of the landlord. One of our jobs is to compare the Entry Condition Report with the state of the property upon vacating to make sure the property is brought back to its original condition.

We look to see that it's clean and without damage or excessive wear and tear. We also check to see the fixtures are in place and everything is working and that the gardens are tidy and lawns mowed.

If anything needs rectifying we oversee this as well as doing a final inspection for the purpose of arranging the return of the tenant's bond.

If you have a property management need or query feel free to phone our property management department on 3299 7733 or call into our office at Waterford for immediate assistance.

http://www.llr.com.au/

Rental Yield

How to Increase Your Rental Yield

Rents are definitely on the rise but increasing the rent is not the only way to increase your yield. You can also decrease your expenses and decrease the length of your vacancies.

Here are seven tips:

1. Increase the rent. This is the primary income producer but know your market.
2. Decrease the rent. This applies to those who are still suffering vacancies. You can go through prolonged vacancy periods when your rent is set too high that chew up all your profits.
3. Prepare a depreciation schedule. The tax office offers this deduction. So why not take advantage of it? Many investors don't realise that depreciation is available on older buildings too - not just brand new apartment blocks.
4. Consider pets. Half the Australian population has pets. So you can broaden your market by allowing your tenants to have pets.
5. Make your property more attractive. The time to do this is when you have a vacancy. This attracts tenants and allows you to increase the rent.
6. Include air-conditioning. Properties with this feature rent for an extra $10-15.00 a week over those without it. Not only will you be able to claim depreciation on it, but you will also attract a wider range of tenants lessening any chances of a vacancy.
7. Keep the property looking smart. It is recommended every 5 years to give your property a good overhaul and every 10 years a full refurbishment. This keeps the tenants happy and minimises vacancies.

If you have a real estate need or question feel free to phone me Noel Thompson Principal Professionals Logan Lifestyles on 0418 517 525 or call into our friendly office at Waterford for further assistance.

http://www.llr.com.au/

Investment Properties

Investment Properties Still Popular

Australians still love their property and in uncertain times in the stock market investments that you can touch and feel are getting increasing attention from investors.

Plus there are still plenty of areas where demand continues to be strong despite the higher interest rates and Logan is certainly one of them.

"Property as an investment class is always popular and Australian home ownership remains a fundamental part of the Australian psyche", comments Real Estate Institute of Australia president Noel Dyett.

Property fundamentals never change, too "what matters most is position, position, position. None of the fundamentals change regardless of whether interest rates are going up or down or bumping along" Dyett adds.

To understand position you need to look at transport, community amenities and schools.

"climate, convenience and lifestyle are the overriding factors driving property hot spots" according the Bernard Salt, KPMG partner. "But if you can add another factor - like infrastructure - it will give a burst of appeal because if the lifestyle equation of the town changes overnight it can have a rapid effect on property values".

Record migration levels, rental property short shortages and a generation of baby boomer's looking to re-locate are some of the forces behind price buoyancy.

One thing to remember in investing, make sure you can service you debt. There maybe a dearth of rental properties but you can't keep increasing rent forever to meet higher interest rate costs.

If you are interested in viewing investment properties or have and investment query feel free to phone me Noel Thompson Principal Professionals Logan Lifestyles on 04185 517 525 or call into our friendly offices at Browns Plains or Waterford for immediate assistance.

http://www.llr.com.au

Purchasing a Home Extra Costs

Budget for Extra Costs When Purchasing a Home

When purchasing a home be sure to account for all the costs beyond the purchase price itself.

HERE IS A SUMMARY

• Stamp duty, this is a compulsory tax charged on any exchange of property at the time of purchase

• Legal fees, generally a conveyancing firm or solicitor will need to be hired to analyse and oversee all documents. A title search is always needed to assure outright ownership and that there are no legal encumbrance's.

• Building and pest inspections, necessary inspections to identify all potential defects in the buildings as well as in the environment and to look for termites and other pests.

• Council and water rates.

• Mortgage insurance, this may or may not be applicable depending on the funding source and their requirements.

• Home and contents insurance expenses generally you will want to be fully covered for fire, damages and theft.

• Moving expenses this covers the removal fees.

• Disconnection and re-connection of utility services this includes telephone, electricity, gas and internet connections.

• Strata levies when moving into a strata unit these are quarterly assessments for property maintenance and leisure services.

There are concessions available for First Home Buyers on some of the above. A $14,000 grant is offered through the State Government to counter the effects of the GST on home purchases. Plus there are concessions for stamp duty.

If you have a real estate question or need phone me Noel Thompson Principal Professionals Logan Lifestyles on 04185 517 525 or call into our friendly offices at Browns Plains & Waterford for immediate assistance.

http://www.llr.com.au

First Home Saver Case Studies

Here are two examples given by the Federal Government of how a First Home Saver Account actually works.

1. A couple Belinda and Josh Smith each open up an individual First Home saver Account when the scheme opens on 1 October 2008.

Both of them earn an identical wage of $61,000 so they decide to put aside 10% of their individual salaries into their respective accounts. Each one then receives a 17% government contribution on the first $5,000 of their contributions made to their accounts each year.

After 5 years Belinda and Josh will together have saved a deposit of approximately $88,500 to use towards the purchase of their first home.

If they had instead decided to for go the government plan and get a term deposit with the same 7% earnings rate and the same yearly contributions their total deposit for the house after 5 years would be about $75,900.

This means that the First Home Saver account would have earned Belinda and Josh an extra $12,600 over 5 years because of the extra contributions of the Government.

2. In a second case study 19 year old Ria saved $1,000 per year for 4 years while attending university. She then started working and contributed $5,000 per annum for the next 6 years.

With the First Home Saver Account she would have accumulated a home deposit of $50,400 by the age of 29.

If you have a real estate need or question fee free to phone me Noel Thompson Principal Professionals Logan Lifestyles on 0418 517 525 or call into our friendly office at Browns Plains or Waterford for further assistance.

http://www.llr.com.au/