NORTH SHORE HOMES: The Market
3 for 5
Channel asks five North Shore real estate leaders for their thoughts and advice on residential property in the local area.
Ron Sadler - Barfoot & Thompson
With the recently announced budget and current market conditions, do you still see property as a good investment?
Residential property is a great investment, particularly in the North Shore marketplace.
The key ingredients for a successful residential investment are:
Location: Close to established employment centres.Prospects for population growth. Access to good schooling. Easy access to transport routes such as motorway on ramps. Easy access to public transport. Good quality amenities such as beach, shops and restaurants.
Low Maintenance Construction: Brick and tile and aluminium joinery for low maintenance. Weatherboard with a regular maintenance regime.
The locational factors will affect the availability of tenants and vacancy periods between tenancies whilst the construction types will affect the cost of repairs and maintenance when these do arise.
Most people looking at any investment need to consider the risk profile of that investment. With a residential investment there are three factors that need to be examined; the income potential or rent including the availability of tenants; the outgoings or expenses including repairs and maintenance costs; and the prospect of capital growth.
The budget announcement whilst removing the ability of landlords to charge depreciation as a cost, has not limited the landlord’s ability to charge all other direct expenditure. It could be argued that there was some merit in removing the depreciation factor as this was an arbitrary factor not necessarily related to the reality of buildings often appreciating. In actual fact, where a property was sold then there was always a claw back of depreciation requirement.
There is no getting away from the fact that a residential property is a great investment vehicle in the North Shore market. The beauty of such an investment compared to equity and finance markets is that it is very tangible, the decisions that relate to the operation of the property are yours and yours alone and when combined with a great property management team will provide a relatively stress free investment scenario.
What are the “must dos” people should keep in mind when selling a property?
Firstly, you cannot sell a secret so your appointed salesperson must provide an effective marketing plan. This will draw the right response from the marketplace and will invariably mean an investment in advertising so the property can be visible through all the right publications.
Secondly, presentation is key to marketing your property and achieving the best possible price. All outstanding maintenance should be attended to and grounds and gardens should be in good shape. The benefit of attending to maintenance issues prior to launching the property to the market will be well rewarded during the sales process.
Thirdly, declutter the home so that prospective purchasers can readily see the merits of the property. To achieve this, it could be that some furniture and memorabilia needs to be removed and placed in storage.
What’s the most important piece of advice you can give to people looking to buy property?
The purchase of a residential home is usually one of the largest investments a property owner will ever make. For this reason it should not be treated lightly but with respect to the proven cannons of investment. That is location, location, location. A purchaser should buy into the best location that they can afford and if that means compromising the size of property or sacrificing some replaceable amenities in the short term, then so be it. It is often said that buying the worst house in the best street is a much better scenario than buying the best house in the worst street.
Andrew North - Harcourts
With the recently announced budget and current market conditions, do you still see property as a good investment?
The arrival and departure of the budget has been wonderful for us in terms of people being able to get on with their lives and once again operate with some certainty. No real surprises in the budget and probably no real surprises when I answer your question by saying that “yes” I still see real estate as a good investment but would caution those who are looking to make a quick return on investment and un less you have a good formula look at real estate as a long term investment – not to mention a good way to keep you and your family warm and dry!
What are the “must dos” people should keep in mind when selling a property?
My answer to this might change depending on a number of things such as; construction, location and time frame. For example, if you are selling a plaster home my recommendation is that you deal with potential issues up front, get a comprehensive building inspection, possibly quotes on how much to re clad and allow buyers to proceed with certainty. Make sure that the company and agent you are dealing with can demonstrate un understanding of the current market, gives your all you selling options (if they are recommending an Auction, ask them whether they have done one before and what additional support they have) and importantly is some one who you trust and you feel will tell you not only the good news but the hard news as well.
Other than that the usual rules apply: clear out excess “stuff”, let in as much light as you can, gardens and lawns should be tidy and make sure you are not present when prospective buyers are inspecting you home.
Oh yes, and if you are going to spend money on the home before sale then make sure you fix the problems. What I mean, is that I see a lot of people spending money re painting, re carpeting, maybe even putting in a new kitchen but failing to fix the fundamental problem that the house might have, such as “lack of flow”.
What’s the most important piece of advice you can give to people looking to buy property?
Try and approach buying property with a 10 year strategy. I personally have never met anyone who has lost money holding real estate for this period.
If you like something then buy it, I see so many people miss out on the first property they like and end up paying more down the line for something inferior.
If you are buying a plaster clad home then get a building inspection, be wary of paying too much for a character “do up” – they always
seem to cost more to restore than
you originally thought.
Sue Stanaway - Bayleys
With the recently announced budget and current market conditions, do you still see property as a good investment?
Having been in the real estate industry for 28 years I have seen some highs and lows but have always felt confident that property is a great investment. However some people look for a quick turnover and high capital returns and I believe the key is to be realistic and invest at a level where you can afford the repayments and hold if the market tightens.
Location and quality of build still remain key attributes in good capital gain.
What are the “must dos” people should keep in mind when selling a property?
It is important to put your property in front of the largest sector of potential purchasers and so a targeted marketing campaign is essential.
With purchasers being so cautious about building quality issues it is also important to have taken care of any remedial work that needs to be done on the property and to ensure it is presented at its best. Check with council to make sure all relevant sign offs have been done .
Select an agent who will present your property to both the local, national and international market and who will give you comprehensive market feedback. Listen to the feedback and be prepared to meet the market
What’s the most important piece of advice you can give to people looking to buy property?
The key aspects of a successful real estate purchase are location and quality of build but it is also important to make sure the home suits your personal requirements and you like it as the days of quick turnover and gain are behind us and you need to look at being prepared to hold a property for 4 years plus as this may be the time needed to achieve any capital gain.
Shannon Doell - Premium
With the recently announced budget and current market conditions, do you still see property as a good investment?
Regardless of the budget and market conditions, residential property for pure investment is always attractive provided the location is good, a ready tenant pool is available and as the purchaser you have sufficient equity ratio and intend keeping the property for at least five years. If these factors are adhered to property will be a good investment. “Nothing beats being able to drive past your investment”, rather than read about it in the financial pages.
What are the “must dos” people should keep in mind when selling a property?
Check that the Council file is up to date and in order – order a L.I.M. prior to marketing or download the council file to check your house complies. Remove yourself from “ownership” of your house, look at it through buyer’s eyes. Remove clutter, and personal items like photos. Let the buyer be able to imagine themselves living there. Fix any hazards like broken steps, handrails or torn carpet. Critique your own home from the road for “street appeal”.
What’s the most important piece of advice you can give to people looking to buy property?
Have your finance in place and know your limitations. Choose your preferred locations and look extensively there. Look at property you can afford – if a preferred location doesn’t meet your requirements move to look in a suburb you can afford. If you look for more than 6 months you are likely being unrealistic in your requirements for the money you have to spend. Once you have found the house you wish to buy do your due diligence – building report and L.I.M are two essentials. Make them conditions of your purchase.
Tom Kane - Precision
With the recently announced budget and current market conditions, do you still see property as a good investment?
Absolutely in answer to both questions. The budget has very limited impact on residential property investment as the depreciation component was only a small aspect of the tax benefits. Whilst current market conditions are fairly flat (making it an ideal time to buy investment property or upscale the family home) overall there has been a continued upward trend in residential property prices over the past 100 years. There have been very few and small corrections. The capital growth in the past twenty years has been around 400 percent. With property ownership you hold title to a solid investment that you control as opposed to the share market or investment in ‘Finance Companies’ where you vest control in others – sometimes at your peril.
What are the “must dos” people should keep in mind when selling a property?
Choose your Real Estate Agency and Real Estate Professional with care. Ensure they and their team are experienced and successful in your price range and location. Ensure they understand your objectives and can justify their market appraisal. Beware of the one fit fits all approach that is currently being evidenced by an obsession of auctioning every property. Obtaining a Registered Valuation from a Registered Valuer who specialises in your price range and location is very beneficial as is obtaining a building report from a recognised building inspector. The valuation will provide you with comfort as to price expectation and will be a useful tool for your Real Estate Professional. The building report will alert you to any matters that may require attention prior to the sale process. Obviously a LIM (Land Information Memorandum) from your local Council is essential but your Real Estate Professional will obtain this on your behalf.
What’s the most important piece of advice you can give to people looking to buy property?
Be location driven, as apart from providing a nice environment in which to live, good schooling and other facilities, the location will strongly influence your capital growth. Ideally work with one Real Estate Professional with whom you can build a rapport, they will soon understand your requirements, likes, dislikes and do a lot of the leg work for you. If they don’t have the right property for you they will approach other agencies to identify the right property.
Always obtain a current LIM. Always commission a pre purchase building report from a recognised Building Inspector.
