FAQ

Find answers to commonly asked Real Estate questions. Click on a heading from the list below.

Couldn't find the answer? Then contact us for a FREE assessment about selling, buying, leasing, renting or simply check your decision (even if you are using another Agent) from another qualified perspective.

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While the concept of debt may seem disturbing, the reality is that we all live with debt of one form or another, and few people attain true financial independence without some form of leverage.

There are two key principles that will ensure security when it comes to borrowing:

  1. Only borrow to purchase appreciating assets
  2. Make sure your debt is manageable

Maintaining control of your investment does not have to mean active involvement.

Once a property has been purchased, an investor's involvement can be reduced to a minimum through the use of an effective property manager.

The right kind of property management will save the investor time, money and tenancy headaches.

Managers can assist in some or all of the following areas:

  • maintenance
  • improvements
  • tenant screening
  • rent collection
  • lease preparation
  • advertising
  • inspections
  • tenant relationships

When selecting a professional manager, it is important to look for someone who is a good people manager and runs the rental roll like she/he would run their own business.

Should this be a concern, take out a long term or fixed interest loan. This gives the investor two advantages:

  1. The amount of repayment is known in advance and it is easier to plan financially
  2. The amount of interest paid will remain constant for the duration of the fixed term, despite a rise in interest rates

Historically, whenever interest rates rise, property prices also rise, providing the capital growth and growth in income stream for investors.

We only have to look back to the late 1980's and the mid 1970's to see an example of the parallel between a rise in interest rates and a peak in property prices.

It is our experience that, providing a property is in a reasonable state of repair and you are not a greedy landlord, you can find a tenant for it.

With the right property management in place, vacancy should not be a problem. A good property manager should have no difficulty finding suitable tenants.

Residential property offers a lot of flexibility. These days if you need cash in a hurry you can actually draw the equity off your own home simply by re-financing.

If, in the worst-case scenario, an income stream is cut off for an extended period of time and there is no other redeemable asset base to turn to, the investment property can be sold to pay back the loan.

Purchasing a new house, unit or land is an important step. We recommend that you take time when deciding upon the home you want.

It's a good idea to make a list of 'essentials' that you require in your new home to make sure you don't overlook any of your needs in the excitement of inspecting a property.

It is critical that your solicitor is thorough when giving advice and clearly explains the process throughout the transaction.

A purchase transaction can be quite detailed. Here is a brief outline of the general procedures followed on a purchase matter:

When you find a property you wish to buy, a deposit along with a signed contract for the property is placed with the Real Estate Agent to secure the purchase, subject to a 'cooling off period', should the Vendor have allowed it. Typically the cooling off period is five working days from the date of exchange in which time, you should obtain pre-purchase inspection reports.

Should you discover any problems with the property or have trouble obtaining finance, you may rescind the contract within the cooling off period. You may be subject to a forfeit fee of .25% of the purchase price of the contract.

You need to advise the Real Estate Agent of the contact details of the solicitor acting on your behalf. The agent will then provide the solicitor with a sales advice containing the relevant information.

At this time, you should obtain a written loan approval. Lois Jones Real Estate can help you arrange finance so contact us to discuss this at a mutually convenient time.

You then instruct your solicitor to act on the purchase and attend to the following:

  • Request a copy of the contract from the Vendor's solicitor
  • Order the pre-purchase inspection reports
    • Strata reports for units
    • Pest report carried out by a qualified Pest Inspector
    • Building report carried out by a qualified Building Inspector
  • Request a copy of the written loan from you, the purchaser
  • Request an appointment with you, the purchaser, whereupon the contract is explained and signed

Cash is not necessary as a deposit when there are sufficient assets to borrow against. For example, equity in an existing home can be used to finance the purchase of an investment property and its associated costs.

  1. A comprehensive insurance policy will protect your property against most forms of damage. The cost of the insurance is minimal and is tax deductible.
  2. With effective property management, tenant difficulties should be non-existent or reduced to a minimum.

A residential investment property is a house, townhouse, terrace or unit which the owner rents out instead on using it as a personal residence.

This allows the investor to benefit from both tax advantages and rental income from the property.

While the concept of debt may seem disturbing, the reality is that we all live with debt of one form or another, and few people attain true financial independence without some form of leverage.

There are two key principles that will ensure security when it comes to borrowing:

  1. Only borrow to purchase appreciating assets
  2. Make sure your debt is manageable

The exclusive listing arrangement is your written authorisation to Lois Jones Real Estate of sole rights of representation in the sale of your property.

A key question facing you when you decide to sell your property is what price should you ask.

You certainly don't want to sell it too cheaply nor do you want to overprice it and a result, preventing it from being sold.

The price a property brings is determined by what a buyer is prepared to pay.

Be very wary of any agent who quotes you a fantastic price which is well above what other agents are indicating. Always ask the agent to justify the price compared with recent sales.

The term 'negative gearing' simply refers to a situation where your cash outflow to maintain an investment exceeds your cash income from the investment itself.

In other words, when expenses from a residential property exceed the rental income, it is said to be 'negatively geared'.

This means that when the interest and other expenses are offset against the income, any subsequent loss can be claimed as a tax deduction.

Contact us for more information or phone on +61-2-43397644.