There is a dialogue in Jack Finney’s “Time and Again” where the landlord asks a tenant for references and he replies “It’s true that I’m an escaped convict, an active counterfeiter, and occasional murderer. And I howl during the full of the moon. But I’m neat.”
Well! I don’t say for a moment that things could get as bad, but it’s always prudent to rent out your property after thoroughly checking with the prospective tenants. Conducting Due Diligence is part of your homework but equally important is to ask a few probing questions.
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All You Need To Know Before Buying A Home
Getting a nice home for oneself is like completing a major part of the happiness ‘Jigsaw’. But the nicety and persevering beauty of your home will depend upon how you follow these home buying tips.
How Banks Perform Property Valuation
It is a bank’s job to lend money but it is also their job to hold the sanctity of the prime lending institution. Banks fulfil both these requirements to the tee- they never shy away from forwarding home loans but at the same time conduct their own home valuations to judge the strength of the collateral. This brings us to a crux question? What standards of property valuation do banks use or in other words how do banks value properties?
Five People Every Property Investor Should Know
Is there something wrong in dreaming about a strong asset base or proud property portfolio? In all honesty, there is nothing wrong in it but such a dream also warrants suitable action. Each step of the way, you need impeccable guidance. This reminds me- there are a few people you must have in your team. Rather than making a random note of them, let me discuss 5 of them below.
Property or portfolio manager
They are the “Man Fridays” of a property investor. From taking care of tenancy agreements, disputes, repairs and renovations, their arc stretches to council compliance deeds, approvals, green-certifications. It is actually a never-ending list.
Let us say, any investor with more than 3-4 properties in his portfolio requires a competent property manager.
Solicitor
Fund misappropriation, duplicate land deeds, biased clauses (read Sunset Clause), failure of settlement dates and a lot more require able guidance of a solicitor.
He will let you know how best to act in such situations and in many of them, he will become your ‘action’ man.
Tax expert/Accountant
He instructs you about all the possible avenues of capital gains and tax deductions that you may claim on them. He lets you know about the negative geared properties and the way you can earn through them.
Tax analysts suggest you various means of benefitting from Superannuation funds, if used for property investments.
Insurance broker
Property requires not only its own indemnity but also the insurance of the assets that it contains. A competent insurance broker will instruct you on property and liability insurance, and any chances of third-party subrogation claim.
Additionally, he is the one who looks into exclusions and endorsements for insurance contracts prudently and ensures that you do not suffer while making claims on a later day.
Landlord insurance is an imperative for investors who offer tenancy. Lack of such insurance can result in a subrogation claim on you even if a third-party is hurt due to your tenant’s fault.
Such a situation does not arise if you have a deft insurance broker on your side.
Finance broker
A finance broker helps you in servicing a loan, tells you about the right Loan to Value ratio to follow, and advises you on the declarations you need to make to the bank.
At times, it is important to show the self-funding nature of your property and at other times, you need to hide your asset base. Finance brokers know the nitty-gritty of property financing.
In addition, they also recommend you when to refinance a property, how much of home equity to liquidate and which property locations have hit a crest or a trough (and are thus ready for sale or otherwise)
Strong team=success in property investment
Real estate is mired with complexities. You can make a fortune for yourself but it takes a lot of expertise to sail through property cycles and come out a winner. The above mentioned professionals are what it takes to make a winning team.
How many of the above 5 do you have in your property investment team?
Some Packing Tips for Your Next Move
You may think that buying a home is the most difficult part but there are ample testimonies to suggest that packing for a new home is no child’s play either. Removalists are not accorded so much importance without a reason. After all, we are talking about packing the entire life’s content of your family and unpacking it in a new place without disturbing a single bit of asset-worth or nostalgia-worth. Phew! It is no mean objective to fulfil. Yet if you vow to be disciplined about the job, the process of moving home can be great fun.
What If The Australian Property Bubble Is Made Of Rock?
In an ideal world there will be no cynics. There won’t be people sitting on the fences and announcing the height of the next tide. In an ideal world, whenever that kind of a world chooses to appear, we will all be men of action. We will give due relevance to thoughts but won’t at least be carried away by cynical or baseless assertions of a few. For instance, we won’t be eager listeners to the chant of “Australian property is in a bubble” because if we care to find out, this is far from the truth.
