\nIn this week\u2019s show Andrew Mirams <\/b>answers a question \u201cCan they really get a better deal in this environment?\u201d
\nAs we head into the second quarter of 2015, Michael Yardney<\/b> shares a series of questions designed to help you evaluate and glean the lessons and meaning of the year so far to help you clarify your direction and your plan so that you make any needed course corrections.
\nHere is a staggering stat for you\u2026 we\u2019re going to have 4.3 million more households in Australia by 2036! How will that impact your property portfolio?\u00a0Pete Wargent<\/b> has been looking into this for us.
\nHave you heard of Title Insurance? Conveyancing expert Garth Brown<\/b> tells us about this little known gem that could save you in the future.
\nMichael Cooney<\/b> from Hodges joins us to talk about how to sell a very unique property with limited interested buyers and Greville Pabst<\/b> touches on the topic of how oversupply of apartments makes area selection critical.
\n <\/p>\nTranscripts:<\/h4>\n
Andrew Mirams<\/b><\/h3>\n
Kevin:\u00a0 <\/b>I received an email from Joseph that was quite interesting. I want to put the question to Andrew Mirams from Intuitive Finance. He joins us.
\nGood day, Andrew.
\nAndrew:\u00a0 <\/b>Good day, Kevin. How are you?
\nKevin:\u00a0 <\/b>Good, mate. I\u2019ve sent this through to you, but I\u2019ll just quickly read it out. \u201cIs it really worth my while using a broker? I\u2019ve heard you talk about using brokers, but I have a good relationship with my bank manager. Surely that will be enough for me. Do brokers actually get me a better deal?\u201d
\nThere you go. I think I know what you\u2019re going to say, but let\u2019s have it anyway.
\nAndrew:\u00a0 <\/b>It\u2019s funny, you didn\u2019t ring the bank manager for that advice. Thanks, Joseph, for your question. I think it is a really good question. The thing with anything in relation to this is getting experts in their fields to surround you. That\u2019s the real key. Whether it be a mortgage broker or an accountant, it doesn\u2019t really matter. Get experts in their fields to surround you if you\u2019re trying to build a property portfolio or whatever it is that you\u2019re doing.
\nWhy should you use a mortgage broker? A bank manager\u2019s job, for example, is to manage the bank, look after the cash, look after deposits, look after accounts as well as the loans and the lending side \u2013 anything ranging from a $5000 personal loan for a car up to a commercial loan. They\u2019re probably what we would call generalists, whereas mortgage brokers specifically work in just the field of the asset finance, actually trying to get home and investment loans.
\nI think when you have a specialist rather than a generalist working for you, you\u2019ll always get a far better outcome. That\u2019s the first thing, as a comparison. The online market is coming on leaps and bounds, and there are all sorts of online specials out there. But when you sign on for just the low rate, do you really know what you\u2019re getting? A mortgage broker can give you that advice.
\nKevin:\u00a0 <\/b>Let me ask you, if I may, in your normal day-to-day workings, how many lenders do you have access to?
\nAndrew:\u00a0 <\/b>We have access to just over 30 lenders and well in excess of 500 products. Again, your bank manager, if they work for ABC or XYZ bank, they\u2019re going to have just their product range, and they\u2019re not going to be able to do all things for all people. That\u2019s the other thing. What one bank may or may not do, we can find another one that will certainly be able to assist clients.
\nKevin:\u00a0 <\/b>Let me ask you this other question, too, that\u2019s been asked of me from time to time about brokers. How do I know that the broker is actually giving me something that\u2019s best for me, not just pushing me to something that\u2019s going to give him a higher income?
\nAndrew:\u00a0 <\/b>Yes, because <\/b>brokers traditionally get paid a commission from the lenders. Every broker by law has to disclose what their commission is, and we openly advocate clients asking us why we\u2019ve recommended that structural price or that lender to them. I have no problems advocating, and any decent broker won\u2019t have any problems in disclosing the whys, the hows, and the comparisons in how a broker got to that decision.
\nThe other thing, like I was saying before, Kevin, is we\u2019re the experts in our field. We have access to the best packages, we can analyze the best prices, we can get access to funds, but also experts in our field \u2013 and I specifically work closely with investors and things like that \u2013 means we know where the best structures are, and we know how to set clients up to help them buy an investment property, or buy their second or third, or grow their portfolio, and try to grow their wealth through property.
\nKevin:\u00a0 <\/b>Andrew, does it depend on the person as to where you\u2019ll put them, or is it more about what they\u2019re looking at buying? In other words, I might be a homeowner but I\u2019m also an investor; will my home loan have different benefits to it over the investor loan?
\nAndrew:\u00a0 <\/b>Yes, it can. You certainly want to make sure that you\u2019re trying to repay your home loan as quick as you can, because it\u2019s not giving you a tax advantage, versus an investment loan that gives you a tax advantage, where there\u2019s no need to. Having your offset account attached to your home loan and not your investment loan is obviously a major priority, and just little things like that.
\nThere are specialists in all different areas. There are brokers \u2013 like in any profession \u2013 who are both really good at what they and are so-so at what they do, so finding the right broker within a mortgage broker also can be an effort. But again, word of mouth and networks are great ways to start.
\nKevin:\u00a0 <\/b>This is the man we recommend, Andrew Mirams, and you can contact him through our website, of course, RealEstateTalk.com.au. There is a button there, and, in fact, Andrew has his own featured channel where he puts a lot of his audios and videos, as well.
\nAndrew, I want to say thanks for your time and support. It\u2019s always great talking to you, mate. Thank you.
\nAndrew:\u00a0 <\/b>My pleasure, Kevin. Have a great day.
\n <\/p>\nPete Wargent<\/h3>\n
Kevin:\u00a0 <\/b>It\u2019s been fairly well known and very widely reported that over the next 25 years, into 2036, the population of Australia is projected to soar by more than 10 million heads, or 45%, from 22.3 million to around 32.4 million. Staggering figures, but Pete Wargent from AllenWargent buyer\u2019s agent says that he believes it may be a touch on the low side. He joins me.
\nHi, Pete.
\nPete:\u00a0 <\/b>Hi, Kevin.
\nKevin:\u00a0 <\/b>Pretty staggering figures, but you believe they could be on the low side?
\nPete:\u00a0 <\/b>Yes. The ABS recently released its household and family projections, as you referenced there, through to 2036. Around the same time, the Treasury also released its inter-generational report, which shows population assumptions right out to the middle of the century, expecting a population of just shy of 40 million by that time.
\nI think the key thing to look at, though, is the trend in the assumptions. Over the last four inter-generational reports, each time the immigration assumptions have increased from 90,000 per annum to 110,000, to 180,000, and finally to 215,000. But even these figures, if you look at these benchmarked against the Department of Immigration, they do look to be on the low side and imply that the rate of immigration as a percentage of the population is actually going to fall, which seems quite unrealistic.
\nAt the end of the day, lower immigration would result in slower economic growth, an aging population, and a lower tax take. For those three reasons, I think that you\u2019ll find the immigration rate in the future is pretty high.
\nKevin:\u00a0 <\/b>Some interesting things that I wanted to discuss with you are the outcome of some of these figures and not the least of which the impact on our property market but also the impact on what houses we\u2019re going to be living in the future, which raises another question. In your piece, you talk about lone households. What do you mean by that and what impact is that going to have?
\nPete:\u00a0 <\/b>By 2036, the ABS projects most of us will still live in family households. There will be a huge increase in the number of childless couples, 46% increase, a 47% increase in family households, but the biggest increase of all is expected to be in lone households \u2013 from 2.1 million today to 3.8 million. That\u2019s an enormous increase.
\nThis is really a function of two things. Firstly, it\u2019s a function of an aging population. Sadly, more of us are going to outlive our partners, and secondly, it\u2019s related to household wealth. Despite all the doom and gloom that\u2019s reported in the media about falling iron ore prices and so on, record household wealth is recorded in the December quarter. Share markets are at close to seven-year highs, house prices are rising. In short, in a country without punitive inheritance taxes, more people can afford to live alone and therefore more people will choose to do so.
\nKevin:\u00a0 <\/b>What do you see is the impact on the property markets of this shift?
\nPete:\u00a0 <\/b>For one thing, we\u2019re going to need a greater number of dwellings to house an equivalent level of the population, simply because those figures imply a fall in the average household size. I think it will obviously result in a huge demand for medium-density housing, but I think investors need to be wary of a high-rise housing glut. The latest building approvals figures from the ABS suggested that we\u2019re approving high-rise unit blocks at an unprecedented rate, so therefore if I was an investor today, I\u2019d be looking to steer clear of those.
\nKevin:\u00a0 <\/b>What are some of the winner and loser type markets? We\u2019re hearing about a massive oversupply, particularly in the unit market in Melbourne. Is that translating right around the country?
\nPete:\u00a0 <\/b>The number of households projected through to 2036, the biggest number of households required will actually be in Melbourne. Therefore, although there may be an oversupply around the Docklands area, it may only be a short-term thing. The number of required households projected for Melbourne is 938,000 \u2013 which is a vast number \u2013 through to 2036.
\nSydney, will be just behind at 820,000, and the other two markets that are projected to need the greatest number of households are Perth and Brisbane at 698,000 and 519,000 respectively.
\nIn terms of regional markets, it\u2019s mainly a Queensland thing. The property markets that are expected to grow would be the Gulf Coast, Sunshine Coast, and also Mackay, <\/b>Townsville, and Rockhampton. But New South Wales and Victoria\u2019s regional markets are generally projected to be a slower-growing area.
\nKevin:\u00a0 <\/b>That\u2019s one other point, but we are out of time right now, Pete. I\u2019m wondering whether next week we can come back and we have a look at those two different markets \u2013 the capital cities versus the regions \u2013 in light of what you just told us.
\nPete Wargent will come back again next week. Pete, thanks very much for your time.
\nPete:\u00a0 <\/b>My pleasure, Kevin.
\n <\/p>\nMichael Yardney<\/h3>\n
Kevin:\u00a0 <\/b>We\u2019re well and truly into 2015, now and we\u2019re heading in to the second quarter of the year, well and truly. Is this a good time to assess your portfolio? What are some of the questions you need to ask yourself? That\u2019s the question I put to our genius when it comes to this sort of thing, Michael Yardney from Metropole Property Strategists.
\nHi, Michael.
\nMichael:\u00a0 <\/b>Hello, Kevin.
\nKevin:\u00a0 <\/b>Have you been called a genius recently?
\nMichael:\u00a0 <\/b>Actually, it\u2019s a long time. <\/b>I think my mother is probably the only other one who\u2019s ever called me a genius.
\nKevin:\u00a0 <\/b>Oh, well. We think you are. We love having you in the show. Michael, what are the key questions you find we should be asking ourselves now to evaluate what we\u2019re doing?
\nMichael:\u00a0 <\/b>I think it\u2019s a good time \u2013 you\u2019re right. I think one of the questions you should ask yourself is \u201cWhat is it that I set out to do and accomplish in 2015?\u201d Now be honest with yourself and where do you stand on those? How\u2019s it going, Kevin?
\nKevin:\u00a0 <\/b>Is it best when all these are written down, Michael, so you can assess them better?
\nMichael:\u00a0 <\/b>It makes much more sense to have set some written goals, Kevin \u2013 you\u2019re right.
\nKevin:\u00a0 <\/b>It\u2019s really about the reasons behind it all, isn\u2019t it?
\nMichael:\u00a0 <\/b>That\u2019s right. The same question I ask myself is \u201cWhat are the deeper reasons why I set out to accomplish these goals, and are they still important to me \u2013 if that\u2019s the case, the reasons still matter the same \u2013 or if not, why not?\u201d Then what I\u2019d be saying is do you want to adjust the goals for the rest of the year? Are they still appropriate for you? Are they still meaningful?
\nAnother question I ask myself is what do you like best about what\u2019s going on so far in the first three or four months of the year? What are you proudest of? What are your victories? What are you grateful for? It\u2019s always good to be grateful for what you\u2019ve achieved.
\nKevin:\u00a0 <\/b>The thing I love about what you just said then is that we can be very negative on ourselves; it\u2019s always good to look at the pluses, as well, Michael, to get a bit of a balance into what we\u2019re doing.
\nMichael:\u00a0 <\/b>We live in such a lucky country. We have people around us who love us. We\u2019re in a great position. You have to start with an attitude of gratitude every day.
\nKevin:\u00a0 <\/b>I like that very much so. Yes.
\nMichael:\u00a0 <\/b>The next question I ask myself \u201cWhat are the key lessons I\u2019ve learned in the first three months?\u201d What are the hardest of those for us to listen to, and what are we going to do with the insights that we\u2019ve learned from those lessons \u2013 the things that worked and the things that haven\u2019t worked?
\nKevin:\u00a0 <\/b>Once you\u2019ve been through and assessed that \u2013 we\u2019ll get back to writing some of this down \u2013 is this a good time to evaluate your plan?
\nMichael:\u00a0 <\/b>It is. It\u2019s a good time to write them down again \u2013 \u201cOkay, here are my goals for the rest of the year\u201d \u2013 and then you actually have to share them with somebody, with your spouse or your significant other, and with your mastermind team. You actually have to share it, because the real power and juice in life comes from the relationships we have with other people.
\nKevin:\u00a0 <\/b>Just tell me a little bit about that peer group, too, Michael.
\nMichael:\u00a0 <\/b>I think it\u2019s really important, Kevin. You\u2019ve probably heard it said that you are the average of the five people around you. If you\u2019re a fit person, very likely your best friends are going to also be cyclists or runners or fit people or people you meet in the gym. If you\u2019re financially successful, your peer group is going to be important. Your net wealth will very likely be the average of the five closest friends you have.
\nIt\u2019s been said that your level of wealth is likely to be relate to them, so maybe it\u2019s not a bad time to look at your peer group.
\nKevin:\u00a0 <\/b>Michael, just to build on that, why does the peer group matter so much?
\nMichael:\u00a0 <\/b>I always look at a couple of reasons, Kevin. Firstly, your peer group\u2019s attitude, beliefs, and behaviors, they\u2019re contagious. This impacts on the way you think, your ability to spot and take advantage of opportunities, and your behaviors as you go after \u2013 or interestingly, as you don\u2019t go after \u2013 your financial goals. If your mates pooh-pooh you and make fun of you and say you shouldn\u2019t do it and you\u2019re greedy, you actually don\u2019t go after your financial goals. That makes a difference.
\nI think another reason is alone, you\u2019re vulnerable; connected, we are strong. We all have blind spots, we all have limitations, but your peers can help you bridge these gaps, and they\u2019ll often share resources with you to help you make better decisions, better financial choices, Kevin.
\nI think the other thing is it\u2019s actually a lot more fun to build with other people. It\u2019s hard to do it in isolation. We live in a world that can be isolating, but we are social beings. We build better when we have peers to bounce ideas off, to encourage us, to hold us accountable.
\nKevin:\u00a0 <\/b>That\u2019s a lovely segue, Michael. You\u2019ve given me three great reasons there to mention your Wealth Retreat, which is coming up next month, as well, because it gives that platform, doesn\u2019t it?
\nMichael:\u00a0 <\/b>It does, Kevin. I\u2019ve found that when people become very successful in property, in business, as entrepreneurs, when they get to a certain level, they actually don\u2019t have a lot of people to bounce ideas from \u2013 you\u2019re right, Kevin \u2013 therefore they come to Wealth Retreat to get an instant mastermind group of movers and shakers
\nThey come along and they sit with fifty of their peers, people who are really successful, and with the best faculty I can get together, people like my business coach, Mark Creedon, with Pete Wargent, who\u2019s a regular on this show, who\u2019s an economist \u2013 he retired when he was 33, financially independent \u2013 with Ken Raiss, with the top property, tax people, share people, and all of a sudden, they create their own mastermind group \u2013 people who are there to help them to network. And it\u2019s not just the formal education; it\u2019s the chats you have over lunch, over breakfast. The informal chat is a great way to do it, Kevin.
\nKevin:\u00a0 <\/b>Okay. Tell me a little bit more about how can we get some more detail?
\nMichael:\u00a0 <\/b>If you\u2019re interested to come along to Wealth Retreat, go to WealthRetreat.com.au. We\u2019ll get all the information, you\u2019ll find out more about it, and register your interest, and I personally speak with everybody who comes to Wealth Retreat one-on-one to make sure their investment of the five days\u2019 time \u2013 and, to be honest, the money \u2013 would be worthwhile for them.
\nKevin:\u00a0 <\/b>Wonderful. On that note, Michael, we\u2019ll say thank you.
\nMichael:\u00a0 <\/b>Thanks. My pleasure, Kevin.
\n <\/p>\nGreville Pabst<\/h3>\n
Kevin:<\/b>\u00a0 In the past, we\u2019ve talked a reasonable amount about a possibility of over-supply in the Melbourne market, and it particularly relates, a lot of commentators will tell you, to the unit market. I guess that makes selection criteria very, very important for you if you\u2019re looking to buy a unit in Melbourne \u2013 and no doubt a lot of people will. And they should, otherwise there\u2019s going to be even more of a problem.
\nGreville Pabst is a buyer\u2019s agent with WBP Property Group and is also a familiar face on television because he\u2019s one of the judges on The Block<\/i>. He joins me.
\nHi, Greville.
\nGreville:<\/b>\u00a0 How are you, Kevin?
\nKevin:<\/b>\u00a0 Good. Greville, what\u2019s your feedback? What are you seeing about apartments in Melbourne? Is there an over-supply?
\nGreville:<\/b>\u00a0 The oversupply question is an interesting one. Look, property growth and performance really is based on where the population shifts are. At this point in time, most people are wanting to live close to the CBD, and if you live in the CBD, particularly young people are wanting to live in apartments.
\nKevin:<\/b>\u00a0 Yes. Then that factor has no doubt driven developers to go into a situation where we possibly do have an over-supply, particularly in those capital city areas. It\u2019s not unique just to Melbourne, because we also hear that there could be some over-supply in the Brisbane market, as well.
\nIt makes that selection criteria very important. If you are looking to buy a unit in, say, the inner ring of Melbourne, what would you be looking for specifically?
\nGreville:<\/b>\u00a0 There are a couple of things. The first thing that I always look for is scarcity. What I mean by scarcity is I\u2019m looking for an apartment that may be one of 15 or 20, a boutique development. That\u2019s probably the first box that I\u2019d like to tick.
\nThe second one, it has to have a relationship to a lifestyle element, whether that be a caf\u00e9 strip, transport, or a school. It has to have that relationship to that amenity. That\u2019s really important.
\nThe third thing is that it really must have a high underlying land value. If it\u2019s in a block of ten, we want it to be sitting on highly valuable land that might be worth $2000, $3000, or $4000 per square meter so that the apartment that you are buying will only share the value of that highly-valuable land with as few other people as possible.
\nKevin:<\/b>\u00a0 I guess the other issue, too, is if you\u2019re looking at an area where there already is a bit of an over-supply, it\u2019s important to know what\u2019s going to be coming up in the future in terms of the suburb zoning.
\nGreville:<\/b>\u00a0 Yes. Zoning is very important, and zoning in many capital cities around Australia has changed, particularly in Melbourne, so you need to be aware of those changes.
\nThe demand and supply equation is something that\u2019s been talked about a lot. Just recently \u2013 in the last few days \u2013 I\u2019ve heard that one of the biggest tower developments, 108 City Road, where there are 1105 apartments, 1000 of them have sold within the last two months. But I suspect that many of those are to overseas buyers.
\nKevin:<\/b>\u00a0 Is there anything other than the fact that they\u2019ve gone to overseas buyers that makes them unique, Greville, in your book?
\nGreville:<\/b>\u00a0 It is unique because that particular development is the tallest building in the southern hemisphere. But the other thing \u2013 and this is what I think many investors and buyers need to be aware of \u2013 is that that particular development does not complete until 2019. The question that I raise is, \u201cWhat is the market going to be like in 2019? Are you still going to get the same value that you have paid today?\u201d
\nKevin:<\/b>\u00a0 Yes. I guess that\u2019s a big question, too, that maybe some partners have come in on the basis because it\u2019s not going to be completed for such a long period of time, maybe they can punt it and make a profit out of it. But I would have thought those days had well and truly gone, Greville?
\nGreville:<\/b>\u00a0 Yes. I don\u2019t truly like to speculate when I buy real estate. To me, one of the best investment decisions that you can make is to buy those vintage apartments \u2013 the lower density, the Art Deco, the 1950s\/1960s\/1970s apartments. Some of those are the best investments that you\u2019ll ever make.
\nThe thing is they have a history of performance, so you\u2019re not speculating. You actually calculate capital growth in arrears over the last 20 to 30 years. The data is now available for you to do that, so there\u2019s no need to speculate when you\u2019re buying investment property today.
\nKevin:<\/b>\u00a0 Greville Pabst, thanks for your time.
\nGreville:<\/b>\u00a0 Thanks, Kevin.
\n <\/p>\nGarth Brown<\/h3>\n
Kevin:\u00a0 <\/b>Have you ever heard of title insurance? According to Garth Brown from Brown & Brown Conveyancers, it\u2019s almost as critical if you\u2019re a purchaser of a property as if you were getting a building report. What is title insurance, and what does it cover? Garth joins us.
\nHi, Garth. Thanks for your time.
\nGarth:\u00a0 <\/b>Thanks, Kevin. I appreciate the opportunity.
\nKevin:\u00a0 <\/b>Tell me, what is title insurance?
\nGarth:\u00a0 <\/b>Title insurance is a type of insurance that protects you after settlement. It\u2019s a once-off premium. It comes in and compensates you for things such as if there\u2019s a problem with a boundary, if there\u2019s an encroachment by the property you own or a neighbor encroaching onto yours.
\nAlso, illegal building structures. If you\u2019ve put up a structure without council approval and after settlement, you\u2019re issued with a letter to demolish or upgrade that, title insurance will come in and compensate you for the loss.
\nIt also protects you from things like fraud on title that could happen after settlement. Also, too, if there are any government proposals later on down the track \u2013 like to acquire the land for education or a railway or a road \u2013 they will come in and help you out and compensate you for any potential loss or try to help out with negotiation.
\nIt\u2019s a wonderful tool. Life is so short, you just have to make sure you have most of your risks covered, particularly after settlement. That\u2019s when all the song and games start up.
\nKevin:\u00a0 <\/b>It seems to me to be a fairly critical form of insurance. Why isn\u2019t it better known?
\nGarth:\u00a0 <\/b>It\u2019s only come out in the Australian market over the last five to eight years. It\u2019s been in America for probably a couple of hundred years now; it\u2019s just migrated over here in the last ten years. This is a wonderful way to protect purchases, and if your conveyancer or solicitor is using it, they\u2019re really up-to-date on the way to protect their clients.
\nKevin:\u00a0 <\/b>I\u2019d imagine that you would be recommending this to all of your clients, but in your experience, how broadly used is it within Australia?
\nGarth:\u00a0 <\/b>Particularly in the conveyancing profession with our education seminars that take place, most conveyancers are moving over to using the product.
\nKevin:\u00a0 <\/b>What does it cost?
\nGarth:\u00a0 <\/b>The cost is so minimal. For a property in New South Wales that\u2019s under $500,000, you\u2019re looking at $450. If you look at the stamp duty on that, that\u2019s probably about maybe $40,000, so for the sake of $450, it\u2019s really worth the coverage that it offers.
\nKevin:\u00a0 <\/b>This would take into account, I think, things like if you buy a three-bedroom home that\u2019s actually had a masonry wall put down the middle to make it a four-bedroom home, improve its return on investment.
\nGarth:\u00a0 <\/b>In some parts of Sydney, some people will put a wall inside their bedroom to increase the number of bedrooms in the home and rent them out and increase their yield. One particular person did this to an apartment in the Chatswood area. A purchaser came across and decided to buy the apartment. They got a letter from the council, because the body corporate found out about it, sent a letter, and the council found out about it and wanted to send them a fine.
\nIf this purchaser had taken out title insurance, this would have covered them for the fine. You just don\u2019t really know what you\u2019re getting into, and usually, these things happen after settlement, not prior to settlement.
\nKevin:\u00a0 <\/b>A great point, too, Garth. Thanks for pointing it out to us. It\u2019s called title insurance, and you should be asking your conveyancer about that. My guest this time has been Garth Brown from Brown & Brown Conveyancers.
\nGarth, thank you so much for your time.
\nGarth:\u00a0 <\/b>Thanks, Kevin.
\n <\/p>\nMichael Cooney<\/h3>\n
Kevin:\u00a0 <\/b>Sometimes from time to time, you\u2019re going to need to move something out of your portfolio that might not be performing all that well, and it might not be performing because maybe it\u2019s only limited in terms of its attraction to tenants or even its attraction to buyers. What can you do? Michael Cooney from Hodges in Melbourne has had some experience with this and joins me.
\nHi, Michael.
\nMichael:\u00a0 <\/b>Well, thanks, Kevin. How are you?
\nKevin:\u00a0 <\/b>Good. Michael, what advice would you have for someone in this position? What should they be doing?
\nMichael:\u00a0 <\/b>They have to firstly understand the property they\u2019re trying to sell and its uniqueness. Every property has a unique selling feature. If they\u2019ve had it for a while, it could be something that has a longer term tenancy in it. You have to understand the property, and if they\u2019re going to sell it, they need to find an agent who will understand the property. That\u2019s the first thing. The current owners bought it for a reason or reasons, so it\u2019s very important that the agent knows those reasons, and this will help them understand the buyers who they\u2019re looking for.
\nTiming is the next point. When is the best time of the year to sell and show the property? Now, now if it\u2019s an average investment, time is probably less critical. At the moment, if we\u2019re going to sell apartments above shops in an area where it\u2019s a bit of a tougher market, what we have to do then is look at \u201cOkay, how are we going to market those? Who\u2019s going to buy it?\u201d and they\u2019re very much a local buyer. I would advise your investors then to choose a local agent. They should be choosing someone local who knows the market, who has sold similar <\/b>properties, and that\u2019s very important, also.
\nKevin:\u00a0 <\/b>I like the point you made earlier, Michael, too, about understanding the buyer and where they\u2019re going to come from, because that\u2019s certainly going to help with the marketing again, I would imagine, as well.
\nMichael:\u00a0 <\/b>I think so. I think if you\u2019re looking at, \u201cWho is going to buy this property? Is it another investment or is it going to be an owner-occupier?\u201d If it\u2019s going to be another investor, are they going to be a local one? Are they going to come from a financial planner? Are they going to be a self-managed super fund?
\nBut if they\u2019re going to be an owner-occupier, if I were the owner of the property, I would be looking to do some research about what you can do. Research \u201cWhat properties like mine have sold recently, and who has sold them?\u201d
\nGo to that agent. If they\u2019ve had a successful marketing program, you know how many days it\u2019s been on market, they will have a list of buyers who perhaps missed out on the property, so an off-market sale may be a distinct possibility.
\nBut you also have to look with unique properties at why are they selling now? What\u2019s the reason they\u2019re selling now? Is there a real negative with the property that they need to tell the agent that needs to be overcome?
\nKevin:\u00a0 <\/b>There\u2019s always a reason for a property to be sold, Michael, isn\u2019t there? It could just be that it\u2019s excess in the portfolio and you\u2019re saying you should brief the agent on this?
\nMichael:\u00a0 <\/b>I think so. It\u2019s really important that people tell the agent and find an agent who you can sit across the table and have some really open and honest dialogue with. If it\u2019s a distressed situation, tell them, because the right agent will help you. The right agent will help you in every circumstance. The wrong agent won\u2019t.
\nIt\u2019s really important to research, \u201cOkay, I\u2019m going to perhaps rate my agent and see who the number one sales office in the area is, who is the number one salesperson. Does that coincide with who\u2019s selling these types of properties in the marketplace?\u201d
\nIt could be simply that you\u2019re retiring, it\u2019s a pre-CGT (capital gains tax) property, so you\u2019re just ready to liquidate it, or you\u2019re looking to move into another investment. You\u2019re shuffling between funds. There are a number of reasons why you\u2019re selling. Be open with the agent and make sure that person understands exactly what you\u2019re trying to achieve, when you\u2019re trying to achieve it, and how you\u2019re trying to achieve it.
\nKevin:\u00a0 <\/b>Yes, it all makes sense, Michael. Thank you so much for your time, Michael Cooney from Hodges in Melbourne. I appreciate your time, mate. Thank you.
\nMichael:\u00a0 <\/b>No worries. Thanks very much.<\/p>\n","protected":false},"excerpt":{"rendered":"
In this week\u2019s show Andrew Mirams answers a question \u201cCan they really get a better deal in this environment?\u201d As we head into the second quarter of 2015, Michael Yardney shares a series of questions designed to help you evaluate and glean the lessons…<\/p>\n","protected":false},"author":176692471,"featured_media":4181,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[24],"tags":[101],"class_list":["post-4090","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-shows","tag-podcast"],"yoast_head":"\n