Think Long Term With Property Investing

The Western Australian property boom of 2004-2007 was fuelled by sudden population growth, attracting many keen investors eager to try their hand in the housing market. Many of the more novice investors then fled this market when property took a dive in 2008.

The 12 per cent fall in median price that year was recovered in 2009 and Perth’s median house price actually peaked at $505,000 in the first three months of last year.

Since then the median price has been gently sliding and is currently around $460,000.

Now that affordability has improved and median rents have increased, some property investors are returning to the market, mindful of holding a long term outlook.

Property investors enjoy total control over their outlay, unlike other forms of investment. This is one of the reasons property investment remains popular. But this also means that the investor is more responsible for the performance of their investment.

The biggest mistake many property investors make is not keeping up with regular maintenance. In the long run this is counterproductive. Such properties will not increase in value as much as others, rental income will be lower and tenants are less likely to care for it.

The best way that property investors can minimise expenditure is to purchase lower maintenance properties that are structurally sound. Of course, even the best properties need occasional maintenance, but many of these costs are tax deductible.

Owners dread the prospect of a tenant who damages the property, but one of the best ways to avoid this is to ensure the property is in top condition. Most tenants will keep a property in the condition they find it. It’s about mutual respect and happy tenants are more likely to stay longer; a desirable outcome for owners.

REIWA recommends employing a property manager as an important way to protect your asset. Apart from finding tenants, collecting rent and administering your property, a property manager can access industry databases to learn if a prospective tenant has a history of rent defaults or damage.

Around 60 per cent of all rentals are managed professionally, meaning that investors who use this service have an advantage over properties managed privately, particularly in the selection of tenants and care of the dwelling.

Property management fees are tax deductible which makes them attractive, particularly for those people who lead busy work and family lives and who would rather not have to deal with the day-to-day issues of advertising for tenants, interviewing applicants, arranging the lease, collecting the rent, home inspections, responding to all-hours maintenance and possible court appearances if a dispute arises.

Following these basic guidelines and committing to property investment as a long term plan gives you the best chances for economic reward.

This article was originally published on reiwa.com.

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Will A Garden Grow The Value Of Your Home?

Spring is usually a time when many sellers like to conduct a home open, because the weather is pleasant and the garden, if there is one, is at its best.  A nice garden might attract more potential buyers but does it add value to your property?

A new garden can be quite expensive. It’s very easy to spend up to $10,000 and beyond on paving, landscaping, planting and reticulating a typical home.   Certainly, this work can ultimately result in a greater resale value of the home, however this can vary significantly.

Buyer research has shown that the value of a home is determined in order of importance, by the location; the selling price of neighbouring homes; the age of the home; the number of liveable rooms; the quality of its construction and then any additional lifestyle attributes such as a pool, work shed or perhaps the landscaping.

Any significant investment in home renovation or garden design needs to be carefully planned to maximize the dollar return on your efforts.   A garden, for example, should have two objectives: it should make the home more comfortable for the residents and it should make the home more appealing to a potential buyer.

Remember, most homebuyers make up their minds about inspecting a new home when they when they first see the property, or its image, from a street view. An appealing front garden, where possible, can boost the selling potential of dwellings which might allow for this.

Although a garden itself will not necessarily add to the value of a property unless it contributes significantly to the liveability of the home. For example, a home that has a protected lawn area ideal for children could be marketed as a family home. Whereas a low maintenance courtyard with a shaded seating area might be more desirable to a retired couple.

If you plan to sell later, then the message to anyone considering a new garden is to ensure that it is compatible with the lifestyle of future buyers.

With inner city locations the priority tends to be low maintenance, compact outdoor dining areas. Usually residents in these areas place a high value on a small private area where they can relax, read, entertain, pursue a hobby or snooze in the sunshine.

Of course another important consideration is the time you expect to live in a home after the garden makeover is completed.

You may have little regard for the resale value of home at the moment, however it makes sound financial sense to keep this in mind if you are about to embark on a gardening project. In particular, be conscious of the increasing cost of water as this resource becomes more precious.

This article was originally published on reiwa.com.

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Make The Best Use Of Great Weather

Few people can resist the allure of a sizzling BBQ, fresh salads and cold drinks at the end of a long hot day during Western Australia’s summer months, and the way we go about this has become more sophisticated in recent years.

Increasingly, people are taking advantage of our generous weather and balmy nights outside of their homes on patios, decks and courtyards.  Quality alfresco areas are now highly sought after and available in all manner of style and prices.

Alfresco areas, from the Italian, “in the fresh air”, is ideally suited to our Mediterranean climate, and even in cooler months can be enjoyable alongside a glowing chimonea, under a gas lit heat lamp or waiting expectantly before a pizza oven.

In many newer homes and renovations their presentation and quality has grown considerably from the days of the old back verandah.  Ideally an alfresco theme is designed to combine the outdoor and indoor areas of a home in seamless fashion. Real estate agents can attest that an appealing outdoor area has become a strong selling feature which for some buyers is equally as important to them as the interior.

The irony to this trend is that the land area in modern homes is shrinking and the big backyard has given way to bigger homes instead. However, smaller outdoor areas are getting much more use now that busy homeowners don’t have the time to tend to large yards. In other words, land size has given way to quality use of lesser space.

The contemporary alfresco design can range from a simple all-weather patio that leads directly from the living area, to an elaborate structure that might incorporate some standard indoor features, such as a cooktop, sink and refrigerator. A typical alfresco structure is generally a continuation of the main roofline.

The ideal is to create a liveable and comfortable outdoor space. Important factors to keep in mind include protection from glare and direct sun, shelter from the wind, adequate space for chairs and a table and a preparation and serving area for food and drink.

If space and funds permit, you might also include large decorative pot plants, ceiling fans, a television area or maybe a spa?

Having gone to all this trouble, it then helps to screen your garden shed, garage and clothesline from your alfresco area for an aesthetic finish.

The impact of a functional alfresco area in a home should not be underestimated. This is evidenced by the number of homes for sale which are promoted almost solely around this basis, and often the photo which catches the eye of the buyer will be the smart presentation of a home’s outdoor living area.

This article was originally published on reiwa.com.

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