How to know when your property is a dud | What do tenants look for? | Financing renos | A lesson for 2015

How to know when your property is a dud | What do tenants look for? | Financing renos | A lesson for 2015

This time of year there is a good window of opportunity for those with underperforming properties in their portfolio to divest themselves of their lemons.
The best way to uncover an underperforming asset is to annually review your portfolio and ask yourself some hard questions.
Hear Michael Yardney tell us the questions we should be asking.
Margaret Lomas tells us the lesson she will take out of 2014 that will help her invest better this year.
Critics of negative gearing have recently argued the case that scrapping the mechanism would save the Government $5 billion in the first year and free up housing supply. Ken Raiss tells us why he isn’t a fan.
Shannon Davis explains the ways to make sure your investment is attractive to potential tenants – happy tenants, happy investor.
A Sydney buyers agent recommends that South East Queensland might be a place to look for a good investment property. Christine Rutledge tells us exactly where to look and why.
And finally in today’s show, our finance expert Andrew Mirams details some strategy you can employ to secure funding for your next renovation.



Margaret Lomas

Kevin:  It’s a pleasure to have Margaret Lomas on the line once again. Margaret, of course, is from Destiny Financial Solutions.
Welcome to the New Year, Margaret. It’s nice to be talking to you again.
Margaret:  It’s great to be back. It’s been a while.
Kevin:  It has, too long, but we should do it more often during 2015. That’s for sure.
Margaret:  We will.
Kevin:  Margaret, I’m really curious to know what you picked up during 2014 as a lesson, I guess, or something that you experienced that you’re going to take in to 2015.
Margaret:  What I found in 2014 is that because the interest rates came down to probably, as we all know, their lowest level in a very, very long time, I found that a lot of the spruikers tended to resurface, and there were a lot of deals going where there was a sense of urgency for people to jump in and buy.
I think the fear of missing out once again reared its ugly head, which it does during times like that. I saw so many property investors who would come to me subsequent to making a deal or signing a contract were jumping in with their two feet onto something that was offered to them, thinking about it afterwards, and realizing that maybe they didn’t do their due diligence.
They were just really frightened that this market was going to become so unaffordable to them that they would never be able to get in. We did see a lot – unfortunately – of not so good deals made during the year.
Kevin:  I was staggered to see how many people, despite all the information that was flying around, who still persisted in wanting to chase those big returns and go to some of the mining towns. It was staggering.
Margaret:  Oh my goodness me. I hate it when I’m right. That’s not true. Of course, I love it when I’m right, but I hate it when I’m right and we have a fallout like we’ve had. You know because you’ve spoken to me for years about mining towns. You know the warnings that I’ve always issued about them.
That includes the fact that not only are they very volatile, but if you’re going to invest in a mining town, you have to be an investor with the kind of risk profile that can bear not only the extreme highs but the very, very extreme lows.
Unfortunately, for the average investor, the extreme low can’t normally be worked through. Most people can’t bear the major expense of sustaining a property with very low returns and high expenses and waiting for the next upswing, which – of course – will come.
I think of people who invested in towns like Moranbah as a great example. Eventually, Moranbah will probably be okay again, but we saw people – again, the ones who had that fear of missing out – investing in areas like that as they were on their way up and up and up, chasing the major returns – which, of course, they were getting – paying $700,000 and $800,000 for properties that they may have seen a $1500 a week return for, but still not seeing the fact that it was unsustainable and very, very risky.
Unfortunately, a lot of those now are having to declare bankruptcy, liquidate other properties to sustain their holdings in those mining towns, and basically having to start all over again – an awful situation.
Kevin:  It is an awful situation. This is a saying, too, that if it looks too good, it probably is. I think we learned in 2014 that if it looks too good, it might be true, but it may not last.
Margaret:  Exactly. It’s interesting, Kevin. The other day, I was reading a blog that was sent to me by an investor who said, “I think you’re going to like this one, Margaret.” When I read it, it told of rising property prices, it told of unsustainable rent returns, it told of that fear of missing out and people rushing in and pushing the market up.
But when you got to the bottom line, you realized that it was a blog from the 1970s. It could have been a blog that was being written today. I guess what it taught me – and it’s something that I’ve always known – is that when we’re in these situations, we will be in them again. The aftermath is usually always the same.
A property investor needs to be very, very careful about following the crowd into these supposed hot spots, about being worried that the property market is going to become unaffordable and therefore making bad decisions, and instead sticking to the old basics of being able to understand what makes property grow, being able to find an area that isn’t the subject of current overheating and buying pressure, areas that go on and have generational growth because families live there and councils are providing infrastructure for generations to come.
We see those areas not return such a high return in the short term, but when you measure them over time, their ultimate return over a 10- or 15-year period is usually far better than those hot spots that people rush in for.
Kevin:  Margaret Lomas, always great talking to you. Thank you so much for your time. Margaret Lomas from Destiny Financial Solutions. Thanks, Margaret.
Margaret:  Thank you.

Shannon Davis

Kevin:  Any property investor will tell you that one of the important things about having investment property is making sure you have income coming in. One way to do that is to make sure that your investment property is tenant friendly. How do you go about doing that?
Shannon Davis from Metropole Properties in Brisbane joins us. Good day, Shannon! How do you go about doing this, mate?
Shannon:  I think the first thing, Kevin, for being tenant-friendly is the price. No matter how good your property is, if it’s over-priced… People do a lot of study for these recurring expenditures, and for many people, it will be their biggest bill. So don’t have it over-priced.
Secondly, the location. People have grown up in an area, or they work in area, they have commitments to an area, so location is going to be pretty important. When choosing a property, look for employment hubs, and transport, and shopping, and school districts, because that’s going to bring your property more and more in demand.
Kevin:  What else?
Shannon:  The main living areas. Kitchens: look for counter space. Bathrooms: try and make them modern. A really tired bathroom will drag you back. Bedrooms: see if they can fit a double bed in, and have built-ins, if at all possible, because that’s what tenants want.
With living spaces, Kevin, the more bedrooms you have, the more reception areas you need for people to retire. A four-bedroom house might need two reception areas or two informal lounge areas, maybe a courtyard or a balcony, as well, because people don’t want to be crowded or living upon each other. I think that’s really important.
Also, Australians still love their cars, so parking – especially the off-street parking – is really important to an investment property. Also, pet friendly accommodation is really important. 56% of Australians, as per the last census, have pets, and 25% are thinking of getting pets. I think that’s a really important thing to consider, because if you rule out pets, you are ruling out a big percent of the renting population.
Kevin:  Yes. It’s crazy to cut out people with pets, and also I guess that flows on to making sure that the backyard is nice and secure for the pets, as well.
Shannon:  Yes, definitely. Well-fenced, which brings me to my next point. Security is a big point. I would make sure that not just fencing, but security grilles and allowing the tenants to feel safe within their home is really important, and it’s something that comes up a lot in open home inspections.
Kevin:  How important is storage, making sure there’s plenty of storage space?
Shannon:  Yes, storage is becoming increasingly popular. You can actually get more rent for it. You see storage cages in areas where there’s a secure car park but not secure for people to put items like bikes, and whip snippers, and things like that away are becoming more and more important, and people will pay you extra for that.
Kevin:  You can actually charge extra for that? Are there any other things that you could charge a little bit extra for, or maybe get a slight premium on, Shannon?
Shannon:  I think mod-cons are really important. When you update your properties with air conditioning, or remote garages, or dishwashers, tenants will pay a premium for those modern conveniences. I think despite if that’s the way you live or not, you should think about that for your investment property.
Kevin:  Always good talking to you – Shannon Davis from Metropole Properties – about ways that you can make sure that your property is more tenant-friendly.
Thanks for your time, mate.
Shannon:  No worries, Kevin. Any time.

Andrew Mirams

Kevin:  Andrew Mirams from Intuitive Finance joins us to give us some tips on financing renovations. Does it need to be any different, Andrew?
Andrew:  It does, Kevin. There are probably the two main things we need to talk about. The first instance is whether the renovation is actually structural or non-structural. If you talk about a structural renovation, that’s more an extension, extra rooms, maybe even a second story, or a significant amendment or change in the footprint of the property.
The way you would finance those might be different to what we would call then a non-structural or cosmetic renovation. That might be just simply replacing a kitchen, bathroom, or both, or painting or floor coverings, etc.
The difference with the two of those is with a structural renovation, you will nearly always have them as a builder’s contract, unless you’re doing an owner-builder. Certainly, you’ll have a build contract, and there will be certain stages of the development – as the renovations and improvements are added – that certain payments will need to be made.
Kevin:  On that point, does the bank prefer you to have a fixed contract?
Andrew:  Absolutely. Owner-builders all want to do it themselves and save a buck along the way. Sadly, a great majority of owner-builder projects actually never get finished, and you only have to look at a street with actually a builder’s own property, normally, and you still see it not finished. A lot of them don’t get finished, and most of the banks don’t like or don’t do owner-builders, so they can be tricky in themselves.
The banks will always prefer a building contract of some sort to be provided.
Kevin:  Once you get the contract done, should you talk to the bank before that so that you can structure the contract around the financing needs?
Andrew:  It’s like most things, Kevin. In the case of a major structural renovation and improvement, you’re probably spending $100,000 to $300,000 or $400,000, depending how much, so obviously it would make sense to get a pre-approval to make sure you’ve got the funding at that level. Once you finalize the plans, the contract, the tenders, and the quotes, etc., then you can go back with the actual terms and get the bank to finance them.
With a significant structural improvement, most of those would get financed along the journey. Where you probably don’t finance them as much might be in a non-structural event, where you’re actually doing a cosmetic or interior renovation and not changing any of the footprint of the property.
Kevin:  If I’m going to be doing a renovation, what are the things that I have to be wary of that are going to make the bank a bit nervous of funding for me?
Andrew:  Again, if we talk about the structural ones, the main thing they want to know – and the key to all of this – is getting an end valuation. If your property today is worth $400,000 and you’re spending $100,000 on a renovation or structural improvement, getting a valuer to come in and agree that it’s going to be worth $500,000 – i.e., your cost base – as a minimum to be able to finance that.
The end valuation is really important. If you are over-capitalizing, you might be spending $100,000 on that property that you think is worth $400,000 now, but it’s only worth $350,000. You spend $100,000, you think your place is worth $500,000, and it only comes valued in at $450,000. That can have a major impact on how you may finance it or not be able to actually complete the project.
Kevin:  To get a good feel for the end value, do you think it’s good enough just to get some agents in, or should we go the extra step and get a valuer in?
Andrew:  Normally, when we’re coordinating on behalf of our clients, we will actually coordinate the valuation on their behalf and try and arrange it. That’s using our expertise and knowing the documents that we need to show a valuer – being the plans, permits – and what work we’re actually going to do.
If it’s on contract, we don’t have too many issues. A lot of the variances probably come in what people think their actual property is worth today, and then, because you’re spending $100,000, they think that all of a sudden that’s going to add $200,000 of value, which is unrealistic. Probably just managing expectations is the key in that.
Kevin:  Just your closing tip then, Andrew, your biggest tip on helping us get some funding for our renovation.
Andrew:  I was just going to make one other note just in relation to non-structural cosmetic renovations, which probably, depending on your property, can be as low as $10,000, or maybe up to $60,000 or $70,000 if you’re doing a kitchen, bathroom, painting, and floor coverings. This is a tip to get a valuation uplift in the future.
If you can finance that yourself, valuers will generally take today’s value, plus your cost base of what it costs to do, and they’ll value it at your cost. If it’s, like I said before, $400,000, and you’re doing $100,000, they’ll value it at $500,000, as long as they have realistic estimates or comparable sales of the property.
If you can do it and fund it yourself, what we like to do with our clients who have a good equity position and can fund it themselves is we like to get them the valuation in nine to twelve months – and we’ll generally get a nice uplift in the value, probably more to do with the market flow.
You’re based on three really key events, and that is hopefully and in the markets at the moment, you get a bit of market movement – an increase. Obviously if you’ve done an improvement, you’re going to get a higher rent, which gives you a higher yield. The key – and why we wait that nine to twelve months – is we are going to get comparable sales of renovated units that will justify a higher valuation.
That is the real key to getting that, and you’re going to release potentially more equity than what you’ve actually put into it at the outset.
Kevin:  Very good.
Andrew Mirams from Intuitive Finance. If you want to know a little bit more about Andrew and his team, too, you can check out the featured channel at Lots of great information there for you.
As usual, Andrew, thanks so much for your time.
Andrew:  My pleasure, Kevin. Thanks.

Ken Raiss

Kevin:  Critics of negative gearing have recently argued the case that scrapping the mechanism would save the government $5 billion in the first year and free up housing supply. Now, I know a number of people who don’t agree with that view, and I want to take the opposing view right now.
Ken Raiss from Chan & Naylor joins me. Ken, thank you for your time. I thought it might be useful, firstly, just to tell us what negative gearing really is.
Ken:  Yes, it’s the shortfall between the rent you receive and the expenses of holding the property, including your interest and your outgoings. It’s effectively the loss you have on that investment property.
Kevin:  A lot of the arguments about scrapping it are based on the fact that many people believe that people who benefit from this are rich, wealthy landlords. Is, in fact, that the case?
Ken:  I think far, far from the truth. The focus is not on how much money the government would save, but they never look at the other side of the coin and what it would cost. My position is the costs are significantly more than what they would save.
When we look at the ATO annual statistics, we see that over 70% of residential property investors earn under $80,000 a year. They are moms and dads who are – if you like – trying to create a bit of financial future for themselves so they’re not dependent on government. It is the normal person that you pass in the street, not the riches that’s portrayed by a lot of our commentators.
Kevin:  Many people – of course, investors – are getting the benefit of capital growth in this current good market. Why, too, should they get some sort of a tax break? Why should they be favored, Ken?
Ken:  Well, they’re not getting a tax break. Every Australian is entitled to claim their expenses, and owning an investment property is like having your own small business. All business owners are allowed to claim any losses.
How many people would start a new business knowing that they can’t claim their initial costs? There is a cost when you open up a new café, a new hairdresser, a new mechanic shop – and for most businesses, they probably don’t generate enough to cover all their costs in those initial years.
Why punitize people in one particular investment category – property – versus all the other businesses that people set up in Australia?
Kevin:  Ken, let’s now play a what-if game. What if the government did, in fact, drop negative gearing? What impact do you think that would have on the market and also prices?
Ken:  I think it would have a devastating effect over a period of time. I think in Australia we see that about 90% of investment properties are owned by mom and dad, who own either one or two. Over 70% of investment property owners only own one property, so it’s a very cottage-based industry.
I think if you took out that ability to claim those initial losses, you would get a lot of those moms and dads who would pull out of the market. That would create a significant shortage. It would have devastating effects on all the ancillary industries that support investment properties – all the tradesmen – but more importantly, it would bring in professional investors. Professional investors would not be happy with the low yield, and it would be my expectations that, over time, rental prices would increase 50%.
Kevin:  When you say professional investors, are you talking about institutional investors now?
Ken:  No. I’m talking about the more sophisticated investor who doesn’t own one property or two; they will own four, five, or six. They will bring the same financial rigor into that investment that they do in the other areas of their investments. Just as an example, the rental yield on a commercial property is 7% or 8%, so why will those people accept a 4% or 5% yield on residential property?
Over time, the yields will go up for two reasons. Maybe there’s not as much supply – there’s definitely going to be an increase in demand over time – and more importantly, they will want a return on their investments.
When we look at the U.S., I was reading an article by this U.S. group, called RealtyTrac, in their September 2014 review. They’re a statistical generator. They go and get statistics on properties around America. They looked at over 580 counties in the U.S., which represents 280 million people, which is 71% of the population in the U.S. They said, on average, rental yields were about 9.5% in the U.S., and in the better markets, it was closer to 11.5%.
Now, I’m not suggesting Australia will get that bad. But in a market where it is a bit more professional, and the number of owner occupiers – at about 65% – is very close to Australia’s 70%, so there is still that 30% or 35% of people who rent, and they’re paying on average over 9.5% rental yields.
Why won’t that happen in Australia? I think people stick their head in the sand and say, “Well, if it happens, it will happen not on my watch and it will be years away.” But the problem is they’re putting in place – if you like – the bedrock that will force those increases to occur over time.
Kevin:  Does negative gearing happen in the States, Ken?
Ken:  Yes. You can actually claim the interest on your property that you live in, in the U.S. So you actually get a tax deduction for interest on the property, even if you’re living in it.
Kevin:  So Australians are not really pioneers in this, are they?
Ken:  No. Again, if we go back to what negative gearing is, it’s recouping your losses. The ATO won’t let you recoup your losses unless they think you’re going to make a profit in the future, which is a fundamental tax rule. This happens in every industry, in every aspect. If you buy shares, if you buy businesses, if buy commercial properties, you’re allowed to claim losses.
Kevin:  Yes.
Ken:  I don’t know why there’s this pincer movement – if that’s an appropriate word – that targets residential property under what I think are very false premises. It’s almost the have and the have-nots argument.
Kevin:  Yes, indeed. Ken. It’s great talking to you. We’re out of time, unfortunately. Thank you very much.
Ken Raiss has been my guest from Chan & Naylor, the national accounting and wealth advisory group.
Ken, thank you very much for your time.
Ken:  Thank you, Kevin.

Michael Yardney

Kevin:  Regular listeners to the show will recall that late last year, towards the end of the year, I was talking to Michael Yardney from Metropole Property Strategists and suggested that in 2015, a great way to start that year would be to have a look at the window of opportunity that exists to identifying and do something about some underperforming properties.
But what do they look like? How do you know if you’ve got a lemon?
Good day, Michael. Welcome to the New Year.
Michael:  My pleasure, Kevin. It’s going to be another exciting year.
Kevin:  It is indeed, and I’m looking forward to working with you as the year unfolds, too.
Michael, that question, how do you know if you’ve got an underperforming property? What are the signs?
Michael:  Let’s go back to what you said initially. I think it’s a good opportunity, because I see it in some ways as a window of opportunity. I think later this year, early next year, interest rates are going to rise, and when they do, they are going to affect certain markets more than others. I wouldn’t be wanting to hold an underperforming property into later this year, early 2016.
A good question is what do we look for, Kevin?
Kevin:  Can we identify it?
Michael:  What I’ll be doing is looking at my portfolio once a year – or more often – and probably with somebody independent, because if you do it yourself, we tend to be a little bit biased because we’ve put so much effort and time and emotion into buying our properties.
I’d look at each of my properties and ask questions like:

  • Is this property performing like I would expect it to?
  • Is this property outperforming the markets?

I guess the third question I’d ask is:

  • If this property was on the market today, would I buy it again?

Kevin:  Yes, what a great question.
Michael:  The fourth question is:

  • Is there anything I can do to improve the property so it generates more attractive returns?

Maybe some renovation, maybe it’s swapping property managers, maybe it could be redeveloping the site.
The last question I would be asking is:

  • Is this property likely to outperform the markets in the next decade or so?

Now, I accept that every cycle, there are going to be two or three years when an area isn’t going to perform as well. Every cycle, there are going to be three or four years when the market is going to do reasonably well, and then there are two or three years where it’s going to boom a bit.
I’ll not fuss that much if it hasn’t performed well for one or two years, but we’ve got to look at the medium term. If it hasn’t done well over the last couple of years where overall the markets have been pretty good, maybe it’s a lemon, maybe it’s a dud.
Kevin:  Just to dig a little bit deeper, what could make a property underperform?
Michael:  A couple of factors, Kevin. It could be the location. You can’t change that. It could the timing of the cycle, as I’ve just said. Maybe you can just ride it through. Or it could be the presentation of the property, and that’s something that you could improve, as well. There are a number of factors that are in your control but the big one – the location – isn’t.
If we accept the fact that later this year, early next year, interest rates are going to go up, I see more first-time buyer areas, more blue-collar areas, more regional and mining town suburbs locations are going to suffer more when interest rates go up than the more affluent locations where they have got high disposable income and they won’t hurt as much when interest rates increase. If you’ve chosen the wrong location, maybe now is a good time to consider getting out.
Kevin:  If you do decide to get out, it’s likely that the property is going to have a tenant in it. What’s your view about selling it with the tenant or without the tenant?
Michael:  Good question. I’d rather have my property available to the widest range of potential purchasers. I usually like to sell a property close to the end of its lease, when if an owner-occupier wants to buy it, they’ll give 60 days’ notice and the tenant will move out, but if an investor wants it, already there’s somebody sitting there.
That allows my property to be marketed to the owner-occupiers who in particular tend to buy with their hearts, with their emotions, and possibly will pay a little bit more than the investor who looks at it more with a calculator.
Kevin:  We might just quickly run through those questions about how to uncover an underperforming property, just so we can run a ruler over some of our existing portfolio.
Michael:  Sure.

  1. Is the property performing like I expected it to? Of course, that implies that you have a strategy, you have a plan and you’ve already worked out what it should be doing.
  2. How is it performing to the general market? Maybe it hasn’t performed that well this year, but is that because of how the market has gone overall?
  3. If it was available today, knowing what you know now – because your strategy may have changed, you’ve learned more, you have more experience – would you buy that property again?
  4. Is there anything I can do to improve it so it gives me a better return?
  5. Okay, knowing all that information, is this property the sort that’s going to outperform the averages? Because if you can only own two or three or four investment properties, whatever it is, then you’ve got to have your money working as hard as possible for you.

I accept the fact that when you sell there are costs, there could even be capital gains tax, or sometimes you even have to crystalize a loss, and then there’s cost of buying the next one, but if you’re thinking about the medium term, sometimes you have to take a step or two back so you can move forward.
Kevin:  Indeed. Great advice, Michael. Good to have you back on board, too. Michael Yardley from Metropole Property Strategists. Don’t forget, you can check out Michael’s sponsored channel at Real Estate Talk. A lot of new content going up there all the time, because we are much more than just a show; in fact, we’re a website where you can get all the information you need.
Michael Yardney from Metropole Property Strategists. Thanks for your time.
Michael:  My pleasure, Kevin.

Christine Rutledge

Kevin:  Let’s check on another area that you might want to focus on if you’re looking for investment in different parts of Australia. We’re going to turn the focus on southeast Queensland this time.
Christine Rutledge joins me from Buy Right Buyers Agent, based in Sydney. Christine, thanks for your time.
Christine:  Thanks for inviting me to chat. Every chance I get to talk about property, I’ll gladly take that on.
Kevin:  That’s what I enjoy about talking to property people. We love talking about property!
Christine:  Yes, especially someone so passionate as yourself.
Kevin:  Exactly. Now, you’ve chosen a spot in southeast Queensland. Tell me where it is.
Christine:  It’s the area based between Logan Shire in southeast Queensland and towards Ipswich.
Kevin:  What drew you to that area?
Christine:  When I’m looking for properties for clients, you have to find the right property in the right location – that’s the key to success –  but that location is obviously going to depend on your investment strategy and, of course, your budget.
A large percentage of my clients are first-time investors or less experienced ones with a strategy to buy the more affordable properties, renovate them and hold, or buy and hold, and then leverage off the appreciation in the property, and then go again.
I’ve focused on that area because it’s a more and more affordable entry price of roughly between $250,000 and $350,000. Sometimes it can get less and sometimes it can get more. There is a good variety of properties in that area, and healthy yields, and it’s an area that’s still ripe for growth.
The market is slightly moving now, but it’s got all the fundamentals for growth, such as increasing population and fantastic infrastructure. It’s got the M1 that goes between Brisbane and Gold Coast, which is a key for those who are in Sydney, to the M7/M4 businesses locating along there. So it’s completely ripe for growth in that area.
Kevin:  I was going to ask you, but you’ve probably answered the question there, about the developments that are on the horizon in there that actually make it a good investment. You’re talking there a lot about transportation and infrastructure. Is there anything else on the horizon that tweaks your interest?
Christine:  You get the flow-on effect from Brisbane, so when the Brisbane market is starting to come up, it’s a more affordable area, and it’s got all of the basics such as schooling, hospitals, all those fundamentals. It has good moms and dads’ houses, so it’s good for those first-time investors just wanting to get into the market.
It’s got relatively lower risk because it’s got higher yields as well, so that when it comes to trying to grow a portfolio, it is better serviceability. The reality is that when they’re looking for property, people want that minimum risk when they’re trying to build a portfolio. This is what attracts me to that area.
In Sydney, when you’re looking at property, that more affordable area was around the Mount Druitt area, etc., but the entry value for that has gone up a hell of a lot recently and the yields associated in that area are much lower. We are focused in on the Brisbane area where the yields are much better and it’s a minimal risk. When people are first starting to invest, they want to be able to sleep at night, and when you have better yields and growth prospects, that’s where they’re happier to invest.
Kevin:  What sort of properties are you talking about typically? What are we looking at that would attract what type of tenants in that area?
Christine:  Most of the properties that I’ve secured in the last six to twelve months in that area have been brick homes, three-bedrooms, in just your average area. What a lot of clients focus on is a bit of value-add potential, so a lot of these properties have got such as single-lockup garage underneath the roofline, so they’re got a bit of potential to convert that later on to a bedroom or extra living space.
A lot of the clients look at a bit of value-add potential. In those areas, there is a lot of variety of properties. There are a lot of original properties that have been around 15 to 20 years that have got a bit of potential for them to add value to.
A lot of my clients like to be able to what we call “sweat equity,” add a bit of value of themselves. So they not only feed off the natural appreciation in the market, but also they can increase that equity again, draw out that, and leverage off that to buy their next property.
They’re the sorts of properties I’ve been able to secure for clients recently. They’ve not only got the yield, but they’ve also got that value-add potential in the houses.
Kevin:  Very good. If you would like to talk to Christine about that or any other area she might want to point you in, the website is, and the “BA” stands for Buyers Agent, of course.
Christine, thank you so much for your time.
Christine:  Thank you, Kevin.

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