Friday, 7 September 2012

Tips and Tricks to Help You Get Ahead of the Pack

Property investing should be fun. It’s by no means an easy task but making money should at least be enjoyable. To help ease some of your stresses, we here at Streamline Investing have come up with a few key tips and tricks that will put you in front of the pack.

Time is Money – no matter if you are planning on renovating, investing for a high rental yield or purely purchasing a property as your primary place of residence, time is money. Over-runs can cost you thousands of dollars. Delays in finding a tenant or commencement of renovation work can severely eat into your profit. You must be ready then to start doing what is required immediately after settlement takes place.
To assist with this, it is always good practice to put a clause in the contract which provides that the seller will give you access to the property before settlement at reasonable times and upon reasonable notice. A suggested clause could be the following:

"The seller will allow the buyer or the buyer's trades people and manufacturers access to the property, at reasonable times and upon giving reasonable notice to the seller in writing before settlement, to allow the buyer and its trades people and manufacturers to take measurements and obtain quotes for the cost of carrying out work for the buyers following settlement."

A clause such as this will allow you to progress with your plans for your new property without delay, while maximise any potential profits.

Another reason to agree on a long settlement period is to reduce the time it takes you to find a tenant. If you can agree with the seller to show people through the place during the settlement period, it can mean you gain an extra 4-8 weeks’ worth of rental payments. This is something that is easily forgotten during the purchasing phase.

Conditional Clauses – These can be double-edged swords and must be used with caution. I’ve heard of dodgy buyers adding “subject to building inspection” clauses in their contracts and subsequently asking the seller to agree on a lower price due to a negative building inspection. This is fine when it’s true but if you use this as a way of bargaining down, it won’t be long before the seller catches on. You don’t need an upset seller, especially if you’re also trying to get a long settlement or have the seller rent the property back from you. The key message here is to be honest and not to try and ‘pull the wool over the seller’s eyes’. Adding ‘subject to property inspection or valuation’ clauses can be a good strategy as long as you use them the right way.

Buying Off the Plan – This one is simple. Don’t do it. There are numerous reasons (and cases supporting those reasons) as to why buying off the plan is a bad idea. Over-stated prices, dodgy contract conditions and simply not knowing what the workmanship is going to be like are only some of the negatives. I really can’t see too many positives in this kind of purchase so my only advice is to not buy off the plan.


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