This entry was kindly contributed by a member of the Talking Property community. If you are interested in contributing an article that would be of interest to our readers then please contact us.

Urgent Breaking News !!!

That got your attention didn’t it !

How many opportunities do you think there are out there in the property world at the moment and what do you think the state of the market is like ? Well, at the moment I think it depends on the area. There are some fast areas as well as many slower ones. So if we choose the right area, there are literally hundreds of opportunities to make stacks of money and build up piles of equity within short periods of time…even in little old Adelaide !

Just this week, I saw a house on a corner block come onto the market. It’s an easy subdivision where a significant amount of equity can be built up within a relatively short period of time, you could either build on the new land, sell the land, sell the house, keep the house, there are so many options for this property. So I rang the agent the next day and was amazed that no-one else had made a time to go and have a look. I made a time for a few days later and as I was driving up to the property I fully expected to see a swag of people falling over each other to get this deal, bearing in mind what it was, an easy subdivision of some land on a corner block, behind a solid brick house in good condition, in a reasonable area. It was the first time this property had been viewed by the market.

Guess what, there was only one other person looking at the property and they had a quick look and left, leaving me there by myself. Needless to say this allowed me to spend some time with the agent, giving me an insight into the vendor’s circumstances, subsequently placing an offer that was attractive to their individual requirements. Even if I don’t get this particular property, I was there, playing the game, and no-one else was there to compete. I think you’ll agree this builds up your chances quite considerably.

Initially I couldn’t fathom why no-one was interested in this property. It’s a good deal. I thought maybe there was something wrong with it, did it have a big easement, a stobie pole in the way, a bikie club next door, squatters in the shed, termites, asbestos, graves in the backyard, old cars, broken roof timbers, massive cracks, drainage problems, a disgusting kitchen or bathroom etc. Nope, none of the above.  I came to the conclusion that it must just be the current market in that area ! Awesome !

How many other properties must be out there right now with no-one looking at them ? How many bargains could I pick up in these slower areas, with a bit of legwork and determination ?

As of today, there are currently 11,684 properties listed on the market for sale in SA, (as per RP Data). That’s right, over 11,000 !!!!   I know this may not be 100% accurate, but I am thinking that there might be enough properties for sale for me to conclude that there might be some opportunities out there at the moment !

But how many of us are maximising the current market conditions and getting out there and having some fun, looking at properties, speaking with agents, placing offers ? Not many. I say that with some level of confidence given my experience this week.

So, what can you do to get out there and get some bargains. It’s simple really. Stop daydreaming and get out there and start taking some action. Just take the first step and you will find that momentum builds, before you know it you will come across a great deal…but you won’t unless you hit the road and get out there and have a look.

Hot Tip: It is worthwhile signing up for an account on www.realestate.com.au and registering to receive email alerts when a property is listed in your chosen area. This is a great way to keep your finger on the pulse and be notified immediately of new listings. But be warned…alerts are no substitute for getting on the phone and hitting the streets. The last property I bought was purchased through an agent before it was advertised anywhere. This happens all the time.

So get out there and have some fun. Call agents, go and have a look, make offers and get some great deals. There are currently 11,684 properties on the market in SA (according to RP Data), so there is plenty of great deals for everyone !

Go get em !

Tim Ellis
Property Investor

This post is from the Talking Property Podcast

The Current Property Market

This entry was kindly contributed by a member of the Talking Property community. If you are interested in contributing an article that would be of interest to our readers then please contact us.

News Break!!! Valuations are very subjective.

They can be one of the most subjective areas of financing a property and they can make or break a property deal.

This is great news for investors because it means there are stacks of things you can do to maximise your chances of getting an awesome valuation. You must have an understanding of how you can make a difference.  If you are not prepared, you may be disappointed and will be kicking yourself that you didn’t do more. Of course, being prepared is no guarantee of a good valuation but it definitely works in your favour.

I’m going to talk about valuations when refinancing a property you already own. For example, if you have owned the property for a couple of years and the value has grown, you may be able to revalue the property at the higher value, enabling you to access increased borrowings. This would be the case for a rental property or an owner occupied property.

I’ll start with your relationship with the valuer. This relationship is like any other business relationship. It’s important and plays a role in the deal you get. You may never see them again but for the short time you are together, you had better make a good impression.

Before they even get to the front door, make sure there are no cars parked where they have to squeeze past. Make it easy for them. If your car is old or dirty or both, move it down the street. Borrow a nice car from a neighbour to park in your carport for an hour. They will be flattered you asked. If you have more than one car, move the others down the street for a while. Hook the trailer on while you’re at it and take that too.  Trailers are ugly and take up a lot of room. This creates a feeling of space that wouldn’t exist otherwise.

Dress neatly and put shoes on. Shower beforehand. Wash your hair, clean your teeth and have a shave. You only have one chance to make a good first impression. Remember their name. Offer them a coffee or a glass of water. Offer them a guided tour of the property so you can highlight all of the positive aspects. Don’t mention ANY negative aspects. Be positive in everything you say. If you have children, move them out for a while. If you have dogs, move them out for a while. If you have a husband or wife, move them out for a while. The property needs to feel peaceful and spacious. The less living creatures hanging around the better. If you are no good building rapport quickly and effectively, move yourself out for a while and get someone in who is good in that area.

Mow the lawn. A freshly cut lawn looks great. Water the lawn. Turn on all the lights, including bedside lamps, even if you don’t think they need to be on. Every little bit counts. Clean the windows. This can make a huge difference to the feeling of a room. Don’t believe me ? Clean your windows and you will see what I mean. De-clutter everything. In other words, move everything out into the shed or shove it inside the kitchen cupboards or bedroom wardrobes, including toasters, kettles etc. Clear everything out. Get rid of kids toys. Pile them up in the back of the car if you have to but get them out of the house. The rooms need to feel spacious, not cluttered.

Make the valuer’s job as easy as possible. Ensure you are up to speed with all the technical aspects of the property. This includes sizes of sheds, offices, rainwater tanks, tennis courts, pergolas, car spaces, square metres of living space, cost of renovations, size of air conditioners, power outlets, broadband, year built,  the list goes on and on and on and on and on.

Then, offer them a pre-prepared copy of a series of nice colour photographs of your property, highlighting all of the positive aspects you want them to remember when back in the office. Many valuers will visit several houses in a day before going back to the office to do further research. How will they remember your property amongst all the others ?  Will they remember all the bits that are stuck in their head for whatever reason, or will they remember your property by looking at the nice colour photographs you gave them ? I bet no-one else did that for them today ! It’s all about making their job as easy as possible.

Then, offer them a pre-prepared list of all the features of your property. This would include some of the things I have mentioned above and how new some of the improvements might be. Include everything that will help the value in an upwards direction. For example, if your shed has power, phone and broadband cables, list them. If the tennis court has a new net, list it. No more than one page otherwise it’s too cumbersome for the valuer to use.

You can also include up the top where you record your address, an estimated value. Then add some. “I can’t do that” you say. “Yes you can” I say. The mind works in peculiar ways. If you believe the property is worth $500,000 in the current market, indicate to the valuer that you believe it is nearer $600,000. Use $600,000 in your conversations with the valuer. You must ensure your impression of the value is also discussed with the valuer, not just on the paperwork you give them. Initially the valuer has no idea what your property is worth, possibly having done only preliminary research, if anything, prior to viewing the property, and you can significantly sway them in your favour. They might be inclined to come back to $500,000 which is great because it’s a fair market value, or more, which is awesome.

If you indicate your opinion of value as being $500,000 and your language reflects this, you may get $500,000, which is an OK outcome, or you may get less, which would not be good. This is just another strategy for getting what you want. Start high. You have nothing to lose. It is better that they start with a higher value of $600,000 in their mind and come down, rather than $500,000 and come down even further!

You could also include some information in relation to comparable properties, although this is not absolutely necessary, (but be wary of coming across as though you are trying to do the valuers job!). Valuers will know real estate agents in your area and will generally discuss your property with them after doing their own research on recent sales. It would be worth mentioning a couple of properties for them to look at which reflect the higher valuation.

Finally, make sure that when in discussions with the valuer they are standing where you want them to stand. For example, if it’s a hot day, make sure they are standing in front of the air conditioner. If you have a beautiful outlook from a particular living room window and you want them to have this outlook stick in their mind, make sure they are standing facing the window when in discussion with you. They will remember the outlook. If you have a huge living area, be there for the discussion. Don’t get stuck down a narrow hallway for 10 mins while you chat about your property.

How much does it cost to achieve all of what I have mentioned ? Next to nothing.  It’s all about the impression you make and your relationship with the valuer, however short that relationship might be. You don’t need to be doing extensive renovations and spending millions of dollars to potentially get a better valuation than you otherwise would get. So it’s just a bit of hard work. That’s all. So you may as well. You’ve got nothing to lose. You may be amazed at how subjective valuations are and the difference you could make.

Have fun out there and good luck !

Tim Ellis
Property Investor

This post is from the Talking Property Podcast

Subjective Property Valuations

In this episode of Talking Property Debbie talks to Martin Castilla of Smartline Personal Mortgage Advisors.

In this timely interview Martin shares a wealth of information on how to navigate a loan application. A must listen for anyone planning to purchase a property in the current climate.

Show length: 32:43

To download the MP3 right click on this link and choose “Save Target As…”.

Here’s a short bio:

After twelve years of mortgage lending experience as well as personal experience in buying, renovating and selling properties, Martin enjoys sharing that knowledge. For eight years he’s been a guest lecturer in investment property financing at TafeSA, UniSA and NSW’s The Property School.

You can read more about Martin here.

This post is from the Talking Property Podcast

Show 011 – How to Navigate a Loan Application

“Hey You??”

“What’s the matter with the life you have?”

“What do you mean you are working weekends as well as every evening and holiday?”

“When are you going to spend time with me?”

And, “don’t go there, you will get burnt, go broke or get hurt. I may be left to pick up the pieces and I couldn’t let you do that to yourself.”

These are some of the comments and objections you will come face-to-face with when you start venturing into a new life. Why do our friends and family see the doom and gloom that will swallow us, but can’t see that we have the ability, passion and desire to achieve our goals?

When I started investing in property in 2001 I was alone, none of the people I knew were investing in anything but a regular job. It made me the standout which was a frightening and lonely place to start investing.

It wasn’t until I had bought a few properties I took time out and went to a property investment seminar. I couldn’t tell my family and friends I was spending more than $15,000 on a property investment seminar, I’m sure you could imagine what they would have said.

Even my accountant was sceptical when I asked him to set up our investment structure, he told me to do a few renovations before going to the expense of setting up a structure as many people only ended up buying one or two properties.

I knew I was different.

It’s hard to remain excited and want to share your new found wealth with everyone, only to be met with scepticism and horror stories, especially if they tried and failed.

In 2 weeks my daughter is settling a new business (her first). People around her know she has a supportive family but still have not supported her decision. One of the comments she has repeatedly made is about the lack of interest and support from the people who have been her closest friends. She now feels hurt, isolated and alone instead of being supported and buoyed.

Why does this happen?

When I went to my investment seminar in 2001 the speaker spoke about trading up your family and friends.

At the time I thought this as an insult to my choice of friends (‘cause I realise you can’t choose your family) but it wasn’t long after I realised what the speaker was talking about. My family and friends were comfortable with who I was and my position. The hierarchy had already been established.

I was working in my family’s business and teaching piano after hours at the time, but had a burning desire to get into the property market.

I put our owner occupied house in jeopardy (that’s what it felt like at the time) to invest, there was nobody giving me advice on what to do. I made mistakes, but are mistakes really a problem?

I was bagged and got the “I told you so” attitude.

Then the comments started – “What would you want to buy property there for?”

“Don’t you know the boom has already been?”

I even heard the words greedy and selfish used about me! – AND that was from my family!

Then the comments “Is property all you talk about?” as you get on further.

It’s hard to be confident when you are shaking in your boots. Comments from these people can be completely detrimental to the ongoing growth of your business. My situation is not unique. If you have supportive family and friends then I would consider your position pretty unique.

Our friends and family are really trying to protect us from something they don’t understand.

They also don’t want you to outgrow them or the relationship. They don’t want you to become a superstar while they live their mundane existences.  I don’t believe this behaviour is conscious, I think there must be a gene inside us that arc up as protection for those we love.

If you asked your friends and family why they weren’t supporting you some would deny and state they were very supportive and others would say they don’t want to see you hurt. Funny thing about that is the way they are hurting you with the behaviour to start with.

For you to grow and move into a different lifestyle, you change. The way you talk, walk and think changes. Your behaviours and life style changes and your friends and family notice. You become an alien!!!

Luckily aliens are well accepted in investment and business circles. This is why you need to trade up your family and friends. Your new friends will take you as you are now, and move with you as you grow because these people are growing too.

If you want to grow in your business, you need to feed and strengthen your mind. I do this by getting involved with groups, reading, listening to audios and even changing the inner chit-chat in your head. Then surround yourself with people who are going the same direction as you. Those friends who want to remain will remain.

I love my new friends, they have become just as important as any friends and family I have had before, but they have a way of challenging me, fulfilling a part of me that continues to grow.

This post is from the Talking Property Podcast

What are Friends For?

This entry was kindly contributed by a member of the Talking Property community. If you are interested in contributing an article that would be of interest to our readers then please contact us.

Those who have children and have renovated with them on site, will know how much of a learning experience it can be, not only for them but also for you as parents ! Kids love the experience. There is so much for them to explore, watch, people to talk to, things to learn, it’s like a huge playground. They love it. They are in their element. Well, all this depends on the child of course…sometimes they love it for an hour or so then spend the next several hours asking to go home !

Those of you who read my previous article will know all about the excuses that people come up with to avoid taking action. Unfortunately children is one of the biggest ones. I encourage everyone who had used their kids as an excuse not to tackle a renovation to think again. Don’t let it stop you. It is so good for you and for your children. But do it in the right way. The safe way. Set some ground rules and some boundaries and you and they will have a ball.

Oh and as an aside, those of you who have used being pregnant as an excuse, forget that too ! Providing you are healthy, there is absolutely no reason why you can’t renovate a property. My wife was 34 weeks pregnant with our 3^rd child when we took off to Port Pirie to complete a renovation. It was expensive though…we had to hire a spa suite (I think it might be the only spa in Pirie !) to ease her aching joints at the end of the day. Actually I’m stopping on this particular subject before I dig a big hole for myself.

We have recently renovated 2 properties with 3 kids, aged 5, 3 and 2. One of them we were living in at the time and one was on the other side of town. For the property on the other side of town, we were on site with the kids every day for 5 weeks (in the middle of Winter !) and for the other renovation, well were living there at the time so they were effectively there all the time ! This one took approximately 10 weeks.

Setting some ground rules is probably the first thing to do. Make some areas ‘No Go’ zones and others ‘Safe’ zones. The safe zones can be used for extended periods if your child needs to sleep, watch a DVD (laptops are great for sticking on a DVD if they just need to chill out for while) or play with some toys. Safe zones can be anywhere. Our last safe zone was the shed in the backyard. We lucked it with that renovation as the shed was FULL of kids toys, most of which we threw in the skip, but the remainder were played with! We had a mattress, toys, books, paper, textas, pencils etc. Most meals were also eaten in this area. ‘No Go’ zones are important for your child’s safety. The problem we had was that our two youngest children were too young to understand where they can and cannot go. It was therefore our responsibility to keep them out of these areas while work was being done, so effectively one of us became a babysitter, completing safer tasks where it was safe for kids like tidying up the gardens or driving around sourcing materials.

Another method we use to keep them safe is to get them to help you. Get them to follow you around and give you a hand. They can hold things, help you carry things, mix things, pass you tools, you can pass them tools, they can dig holes (little ones – and often in the wrong spot), sweep (usually the piles that you’ve already done), carry wood (small bits!). The list is endless. The important thing is to keep them busy and attentive with what you are doing. Some times are easier than others but if you are patient, it’s a really valuable experience. My 2 year old daughter keeps the older two away from the power tools, telling them to stay away because they are noisy. My 3 year old son knows lots of different types of tools and what they are used for. He knows what happens next in the process and often tells me what to do. “Hurry up and get that door on”, “Why haven’t you put the ceiling back yet ?”, “Where has the painter man gone ?”. I swear he will have his builders license before his 5^th birthday !

My youngest daughter a couple of months ago sat and watched my wife tiling for about 3 hours. Asking sooooo many questions, it was great (well, maybe not so great after 3 hours). A couple of weeks later I must confess I left some tile glue out under the carport and found the youngest two doing some mixing and tiling on the carport floor. What a mess !  But they were having a go and having fun and learning…..It was nothing a shower couldn’t fix !

The most important thing is to be flexible and work things out as you go. If something is not working, do it another way. Take it in turns being the adult keeping an eye on the kids, but give them some freedom to have a go. Have patience, try not to yell TOO loud when they draw on the kitchen wall days after it has been freshly painted. When they do, because they will do, just show them how to clean it off. That keeps them busy for a while longer !

To be honest, there actually is not much more to say about renovating with kids. It’s not that hard. You work it out as you go. They learn a lot by simply being on site. Everyone has fun and simply has a great time. I have enclosed a few photos of the type of fun the kids get up to, playing in the mud (the yellow line in the photo is actually a string line for a picket fence, just so you know I wasn’t playing in the mud as well !), throwing rocks at each other before they get spread on the driveway, concreting. The list goes on !

Have a go, you will have a ball.

Tim Ellis
Property Investor

This post is from the Talking Property Podcast

Renovating with Children

In this episode of Talking Property Wayne McDonald shares the 3 keys to sharpening your mind for success in property investing.

Wayne offers some great insights on motivation and how to overcome the barriers that stop property investors from achieving their goals.

And stay tuned until the end for an exclusive offer from Wayne to Talking Property listeners.

Show length: 23:16

Here is Wayne’s bio:

Wayne McDonald is a rare speaker with the ability to connect with audiences and compel people to take action. Wayne brings to his presentations 25 years International experience as a high energy speaker and coach.

His primary aim is to lead, teach and inspire people to live an extraordinary life and to help them build an extraordinary business. Whether exploring how to unlock human potential or revealing his formula for business success, his down-to-earth and entertaining style ensures that participants really ‘get’ his compelling message and take action as a result.

This post is from the Talking Property Podcast

Show 010 – 3 Keys to Sharpening Your Mind for Success in Property Investing

This entry was kindly contributed by a member of the Talking Property community. If you are interested in contributing an article that would be of interest to our readers then please contact us.

You are probably sitting there wondering what on earth this article is all about. Well, it’s about excuses! Excuses are really reasons that people who generally take no action pull out of thin air because they are often too lazy to do be anything but mediocre.

I find these people particularly frustrating. In particular, someone I have known for some time has been continually asking me about property investing for several years. I have even looked at properties with them. Have they bought anything yet ? No ! Have they put in any offers yet ? No ! When asked why what do you think they say ? Here we go…

• When work quietens down I will have more time to look for a property
• Next week I will be over this cold and will have more energy to look for an investment property
• It took longer than I expected to do the shopping so I didn’t get an opportunity to look at that house you suggested
• I’m now studying part time as well as working so definitely have no time until next semester
• We always have so many social commitments at this time of year, after xmas we will get stuck into it
• We have been trying to get pregnant so our mind is focussed in that area
• Mary is really crook at the moment so I have been doing all the running around.
• Mary is pregnant now and we just can’t take the risk prior to the baby being born.
• With child care drop offs as well as work, all we want to do on weekends is relax.
• We have just had to spend $2,000 on the car, money we had put aside for an investment property.
• I’m just not too sure the market is heading in the right direction.
• I was talking to my mechanic who said shares were better than property so I am looking into that now.
• Johnny starts school next year and we don’t want the burden of an investment property.
• There are just not enough properties for sale during winter to choose from.
• I’ll wait until spring, there will be plenty of properties for sale then.
• We have decided that we will save the money we have for Johnny’s tertiary education rather than buy a property.
• Johnny’s sport commitments always seem to be at the same time as open inspections.
• We can’t save enough for a deposit.

The list goes on and on and on and on and on and on…

What frustrates me more than anything is that these people don’t realise what they could do with their lives. How much more fulfilment they could derive from every day if they just took action. I don’t care if they decide to invest in property or not. I wish they would just take action instead of being experts at making excuses. Without realising it, they are teaching little Johnny how to live his life by setting the example. Do they want a child who grows up to be an ‘ant’.

I must clarify an ant for you. I was in the car with my 5 year old daughter a few weeks ago driving through the Adelaide CBD just after 5pm. “Why is everyone wearing black and following each other ?” she innocently asked. What could I say ? I think I explained that Daddy used to wear black every day, like the people she could see, until one day he started taking action. Look at an aerial photo of the CBD at either 8.45am or 5.15pm and you will see what I mean. Black ants following the same path to and from their destination day after day after day.

She then asked me what ‘taking action’ meant. I explained that it’s about finding something you love and then doing everything you can to make it work. It’s about finding something that get’s you up in the morning before anyone else is up and keeps you from wanting to go to bed at night. It’s about finding something you are so passionate about that you smile every day when you think of the joy it gives you. It does not matter what it is, just find it. You will then take action.

The sad thing is that people are kind of brainwashed into a particular way of life by a mixture of social pressures, experiences parents provide you with and the good old television. They believe that being ‘normal’ is being successful and they will be happier if they work harder at what they are already doing.  It’s only when you break out of these pressures that you start to see people standing out from the crowd and having real fun in their lives, at the same time making a difference in the lives of others.

So what’s the point of all this ? We all have a job to do in teaching ourselves and then those of younger generations, how to find what it is that they love and then encourage them to do that, whatever it is. Teach someone how to find their passion and they will be successful. This is not about getting a good education (my wife and I discussed the other day we might be the only parents who would be disappointed if our children went to university !), good grades at school, learning to read or write, being fit and healthy. This is about finding the reason you are here and then going for it. Helping others to do the same. If we all do this the world will be a better place (with much less excuses !)

Good luck finding your passion.

Tim Ellis
Property Investor

This post is from the Talking Property Podcast

Excuses, Excuses, Excuses

It’s Debbie back again ready to share the next part of the journey. As mentioned before, this renovation is a big job.

I’ll begin to address some of the issues we came across, it may take a few episodes to tell you all about it but stay tuned and we will not disappoint! 

Budget & Timeframe

This property was purchased with the strategy to renovate and sell.

Since we settled the property with private funds, the plan was to get the renovation completed within 3 months; market for about 6 weeks and settlement another 6 weeks.

Trouble with renovations, particularly on really old places is that when things go wrong they can go really wrong.

Time has already blown out, firstly with sewer issues, then electricity relocation and lastly the weather!

With any time blow out it is usually associated with costs blowing out.

Our budget for the renovation is $80,000. We set it high so it would cover problems – and we certainly have come across our fair share. So far the budget is not compromised but since it compounds exponentially, we have yet to see where it will end. In saying that though, I have done enough to know we will be pretty close and any blow out will be minor.

Sewer & Power Connections

One of the first major obstacles that faced us was the lack of accurate SA Water/Sewer plans. The house next door (the other duplex) had substantial work completed sometime previously but was not documented and the plans we were working from had the sewer coming through from next door into our yard (under the wet areas) and sharing a connection to the rear of our property. This meant we could not just go and dig it up, new connections were required to the property next door and SA Water was called upon to provide a new connection. That meant agreement from the owner that they would pay for the new connection, also the tenant was going to be inconvenienced by the process.

The major issue with all that was the time frame. SA Water took 2 months to do the new connection. Since we were laying new floors we could not commence preparation on that until the new connection was in place.

The same issue and same time delay came up with the power.

Plans

When we are planning jobs, a lot of attention goes into how the layout will flow after the job is done. That can mean relocating wet areas and kitchens, bedrooms and lounges. When we purchased the property it was sold as a 1 bedroom duplex, but in reality it was easily converted into 2 bedrooms.

Since we work within the existing structure and the wet areas were at the rear, we decided to swap them with the kitchen. Initially we were going to have the house flow (from the front door): Into the hall, bed 1 on left, bed 2 on left, bathroom, laundry, open plan living (kitchen/dining/lounge). The cost of doing this was going to be high so we rearranged the flow to: Bed 1, Bed 2, Lounge, create a small hall into the bathroom, open up into the kitchen/dining and have the laundry in a cupboard in the kitchen area. Best part of this was creating an outdoor living area off the dining – indoor/outdoor area with large patio doors.

This reduced our costs by about $15,000 even after we spent $5,000 on doors.

Salt Damp

On initial inspection the property looked like it had a lot of salt damp, but after consultation we discovered that this issue was old cement. Apparently cement has a life of around 100 years and of course with the property being built in 1880, the 100 year time frame is well and truly up. Since this comment came from a number of different sources, the credibility stands up. When some of the walls were checked they did not appear to be damp either which also supported the theory.

That’s not to say the property didn’t have salt damp because there were places where it was obvious. It’s pretty incredible that sometime in the past the floor boards were probably damaged by white ants so someone filled the whole room with dirt followed by a thin layer of concrete. By the time we purchased the property the concrete layer was damaged substantially and each of the walls in contact with the dirt had massive salt damp issues.

The salt damp was treated by a professional company.

The crumbling cement needed to be replaced so we enlisted the services of a renderer who has experience with restoration. He has been able to build up the stone wall on the front of the building as well as fix up the plaster inside. Usually plasterers charge a large fee as they are in high demand but I managed to find someone who had decided to get out of the business and just works small jobs after hours.

Even though this is not often ideal, it seems to be working out fine. The tradesman works nights and comes to us straight from his other job, usually about 8.30 am and works for a few hours a day (when the weather is fine). I think he has bought a lot of bad weather with him though so work has been rather slow.

I’ll leave the renovation there now, and follow it up again in a week or two. I’d love to hear your feedback.

This post is from the Talking Property Podcast

Real Reno Series – Bowden Part 2 The Renovation Begins

This entry was kindly contributed by a member of the Talking Property community. If you are interested in contributing an article that would be of interest to our readers then please contact us.

Do quality tradespeople exist?

This is the question often on everybody’s mind when sitting around home or an investment property, waiting for a tradie to show up to complete some work or complete a quote. Often you’ll get the “I’ll be there between 9 and 5” only have to have them call at 4.30 pm and tell you they can’t make it that day!

Something I always do nowadays is after I have organised a time with them, I will just ask in a light hearted way “Are you going to show up ?”! They can’t commit to a specific time because they probably can’t manage their own time. Often they advise they will call you 30 mins before they arrive (can they only manage their time effectively 30 mins in advance?) The phone call rarely occurs and you are left spending the day waiting for someone who may not even come. Avoid these types wherever possible. If they can’t commit to a time, don’t use them. Our time is too valuable to sit around waiting for others.

So when the tradie does arrive and sees the property and what might be involved, how do you know they actually want the work ? You see if they don’t want the work, they probably won’t do a quality job.  Just ask them  “Do you want the job?” You will be surprised how many tradespeople will say they don’t particularly want to do the job. The reason they don’t want the work is more than likely because they find it difficult. In my book, this means they are either inexperienced at that particular task, they don’t know how to do it at all, or they are experienced but just have poor skills. If you use them you will most likely get poor quality work.

If they indicate to you they want the work, how do you know if they are any good ? The fact they want the work could indicate they like the work and are good at it. It could also mean they they have no other work because no-one wants them. Ask them how busy they are. Often good tradies have 3 to 4 weeks work booked up. If they indicate they could start tomorrow, this might not be a good thing. How busy they are will give you a good indication of the level of demand they are in and the quality of their work. Another strategy I use is to just ask them “Are you any good at your trade ?” If they are, they will have references you can contact, maybe a website where you can view photos of completed jobs and see the quality of the work they can achieve.

Asking for references is something I always do now, after being burnt a number of times by tradies who at first appeared professional friendly people, only to end up causing more problems. Even contacting references can’t always guarantee a good tradie. If you are really pedantic, you could visit the reference’s property and view the work yourself. This way, you have seen the evidence first hand.

The amount a tradie charges can be a good way to gauge the quality of their work. However this is not always the case. For example, one floor sander we use is one of the cheapest around and does an absolutely brilliant job. He takes his time, is honest and very reliable. On the other end of the scale we have used a general handyman who was quite expensive (who was also a fully licensed builder). They installed some French doors for us, leaving me with a days work afterwards to ‘reinstall’ them properly. The overall quality of the installation was extremely poor and I would suggest he probably sent away for his builders license from the back of a Corn Flakes box. Even when he was doing the job, he was asking me for advice ! I had to lend him my tools, show him the proper size screws to match the wall plugs he was using and show him how to install a deadlock after he pretty much stuffed the brand new door. He won’t be getting any more work from us !

Then there was another floor sander we used who came, did the job, was paid and then left, never to be seen and never to be contacted again. He went into hiding. I think he must have had friends in the some kind of underground society that helps to hide bad tradies from their dissatisfied customers. I think he sanded the floor with bricks. It was in better condition before he started !

Anyway back to the topic of finding good tradies. I must say from all my experience with all types of tradies, whether they be general builders, electricians, carpet layers, tilers, pavers, plumbers. The only way to give you the best chance of finding a good tradie is by referral. Word of mouth is the best way. Good tradies rarely advertise, so you may not even find them in the yellow pages. Ask around, you will be sure to find someone. At least, you will know who not to use ! A word of warning though, sometimes a referral from a friend could end up being the worst tradie on the planet, or one person’s experience could be completely different from your experience. Don’t hold it against your friend !

When we have found a good tradie, how do we keep them on good terms ? The answer is to pay them on time. Pay them as soon as the job is completed. We have an electrician we use all the time and make a point of paying him on the day. When he gets a call from us, he is usually there within a day or two. He knows he will be paid. Tradies are not in it for the love of climbing through rooves. They are in it for the money. If they have a choice between a job they know they will be paid for today and a job for someone who takes a week to pay, they will be there for you every time.

Anyway, I am sure that everyone has both some horror stories and some great tradespeople who they treasure and want to keep forever. Tell everyone about the good ones and the bad ones. The world will be a better place…..

Happy investing,

Tim Ellis
Property Investor

This post is from the Talking Property Podcast

Do quality tradespeople exist?

I thought I would share our latest renovation project with you. I have to say “latest” quickly because we have another property settling in a couple of weeks.

My husband Chris and I will jointly manage this project. Seems like we have very different ways of going about the same business – so better let him do it his way and I do it my way.

Just shows that two people who live in the same house don’t even renovate the same way – so when someone tells you they can teach you how, they can only really provide the basics – which provide a platform for you to develop your own renovating style.

This renovation is not one we would have started out with, it is a big project. The property had not been touched in many years, had salt damp, practically no power, had chunks falling off it (render), the roof was leaking, no kitchen, no bathroom and the toilet was in the back corner as an outhouse. Not only that, even though there is rear lane access, it is completely overgrown.

The property was found online on www.realestate.com.au and was being marketed at $260,000. This was a great price for the area – Bowden (5009) in SA. It’s only about 2km from the city amongst a massive redevelopment area known as Bowden Village. Not that I was actively looking there – but the price was caught my eye and the area was good.

I was happy to either sell the property after the renovation for cash flow – or keep it for capital growth. There would be great gains in both areas.  I contracted the property for $241K, knowing the resale on the property to be around $400K. I have budgeted $80K for settling costs – including Stamp Duty and the complete renovation works. The profit is set to be at least $60K after all incidental costs – including selling and loan repayments.

The property was purchased while in probate – which meant the settlement date was flexible.  I am sure we could have got early entry – but due to other work commitments we chose not to. We often get early entry on properties, but if there is ever any doubt about the property deal then spending money prior to purchase is not a good idea.

So we sat and waited – giving us plenty of time to prepare. I think preparation is very important in keeping a project moving along smoothly. Leave everything to the last minute and you end up with chaos!

Of course, when purchasing a new property one of the first things we do is apply for finance. This time we put in the application to one of the Big 4. We have used Lo-Doc loans for a very long time – and we were aware that the banks had recently decided that they were only offering Lo-Doc loans to trusts or individuals, not companies. So, we put the application in under a trust.

Well, blow me down but the policy had just been changed again to no longer lend to trusts either! Fortunately I had put the property purchase in my own name “Debbie Williams and or Nominee/s” which enabled me to nominate the purchaser – who now ended up being me. So, we resubmitted the loan application in my name.

All was going well until the valuer came out to the property. I met him on site and went through our vision and explained how we renovated many properties before and were well qualified to do this one. He explained that now not only were the banks assessing the property itself but the ability and knowledge of the purchaser to complete the renovation work. Imagine my surprise when our loan was rejected! Maybe they thought we didn’t have enough experience. I’m laughing as I say this because it has been our primary source of income since 2001!

This left us due to settle the property without an approved loan… This can be a stressful situation, but in reality it is a time for creativity and ingenuity to kick in. As I say, if you want nice and safe, go and get a job!

I decided to go with a private lender who lends 1^st mortgage funds. Private lenders typically only lend 70% – but this is the percentage of the valuation, not the purchase price. There have been times in the past when 70% of the valuation has provided me with more than 80% of the purchase price – but not this time.

The great thing about private lenders is they can make things happen very quickly. We had the property settled 1 week later. I am paying a higher interest rate of 9.5% per annum – but with no loan break fees. Private lenders typically want you to pay them back – so this makes having an exit strategy is very important. In this case we are only using the funds for 6 months – which is plenty of time to renovate, sell and settle a property.

Next time I will tell you what happened when we got into the disaster zone!

This post is from the Talking Property Podcast

Real Reno Series – Bowden Part 1 Purchase through to Settlement

In this episode of Talking Property, Debbie Williams talks to private lender Peter Anderson.

In a fascinating interview Peter takes us into the world of private lending, covering the following:

• The typical interest rates a private lender might offer.
• How a private lender evaluates a potential loan.
• Why an investor might consider using private lender funds – and what are the advantages of doing so.
• The place of private lending in the current economic environment.

Private lending is not a topic that is regularly discussed – and I guarantee you’ll get a lot of thought provoking insights from the information Peter shares.

Show length: 18:55

Here’s a short bio from Peter:

Well I guess I am just a regular person with a reasonable understanding of the real estate industry and finance. I sort of just fell into lending money some years ago with a friend needing some cash in a hurry which I was able to provide.

Over the last five years or so I have tried to develop a “system” to make the process as safe, easy and painless for both “the borrowers” and myself the “lender”.

It has provided me with an income which gives me the ability to free up more time to do things I want to do!

If you have any comments or questions please post them below.

This post is from the Talking Property Podcast

Show 009 – Switching onto Private Lending with Peter Anderson

In this episode of Talking Property, Debbie talks to Charyn Youngson from Houses to Impress.

In this info-packed interview Charyn describes 10 cost effective ways to increase your rental yields.

Show length: 35:54

Download the mp3 file

Here’s Charyn’s bio:

• Charyn Youngson is a full-time Real Estate Investor and Property Renovator widely recognized as a leader in the South Australian Property Investing and House Presentation industry.
• She started renovating her first derelict house in early 2005 with a small budget and a 5 week turnaround resulting in $30,000 profit. Her company, Houses to Impress, now specialises in transforming run down houses into stunning homes that sell quickly – and more importantly – for top dollar.
• Charyn’s book “Sacked to Successful” tells how she changed her life from being an unemployed office worker to a very successful property investor. Charyn also teaches the course “Renovating for Profit” at WEA.
• Charyn also provides Project Management of any renovations/makeovers and can source the most cost effective products along with a team of professional and reliable tradespeople.
• She is a single mum with two teenagers.
• She is currently in the process of finishing her soon to be released book Sold For Top Dollar – How to Sell your house faster for more.
• Her website is www.housestoimpress.com.au

This post is from the Talking Property Podcast

Show 008 – Ten Cost Effective Ways to Increase Your Rental Yields