Money was never a big motivation for me,
except as a way to keep score.
The real excitement is
playing the game.
~ Donald Trump, "Trump: Art of the Deal"
except as a way to keep score.
The real excitement is
playing the game.
~ Donald Trump, "Trump: Art of the Deal"
So then - what then will you need to play a game?
(Any game...)
Generally speaking, there will be different rules for the following types of properties:
• Inner city units
• Innet city houses
• Fringe city units
• Fringe city houses
• Outer city units
• Outer city houses
• Satellite units (units in stand alone towns)
• Satellite houses
Each market is different.
The rules governing buying a new inner city unit are quite different to those that apply when buying an existing house in an outer city suburb.
Then there are rules for
Team
Building your team of experts is an essential part of your Real Estate success. Don't be afraid to dump anyone who isn't performing or pulling in the same direction you are.
Quantity Surveyor/Chattels Valuer:
they are experts at providing a comprehensive report on every possible item I can claim a paper tax deduction on.Their report lists every item, its value and what percentage I can depreciate it at on my next tax return. They can also give you an accurate estimation of the cost of renovations that were done in the past.
Accountant:
The difference between a good one and a bad one can cost you thousands of dollars in lost tax deductions.
Valuer:
Use a quality valuer that is approved by your bank. Valuers assess the current market value of a property by comparing the property you are looking at with other similar house sales in the surrounding area. Many valuers or Real Estate valuation web sites offer quick estimation services for a minimal fee — they will give you an accurate guide of what the property is worth. If you think a valuer has valued a property too low, challenge them on their valuation with supporting house sales data and don't be afraid to get another valuation as a second opinion.
Solicitor:
The average suburban solicitor just isn't good enough if you're aiming at investing in Real Estate in a big way. You see, they are generalists. I believe you need to seek one who specialises in conveyancing (property settlement), property law and property litigation.
Real Estate Agent:
Do you need one on your team? And are they a good or bad thing if you're an investor? As I see it agents are a necessary evil! Many good agents that do invest in property (over 90% of them don't) will usually snap up all the good deals for themselves long before you get to hear about them. So the trick is to find a good agent who will pass you the good deals.To begin with, and especially when we are entering a new area, we phone three or four Real Estate agents offices to make appointments with the top agent in each office. When the agent shows me a hot deal and the numbers look good, we enter into negotiations.
If at all possible I never negotiate with the seller through the agent simply because I don't trust the agent as far as I can throw them! The reality is most of them are there only because they couldn't get another job. Most of them see themselves in transition.
So, how do you get around that?
Simple. After they've shown me the property for the first time, I return later that evening, knock on the door and say:
"I was here earlier today with your agent, and I just love the place.
In fact it's the best I've seen so far. We were just driving past on our way home, and my wife asked me what colour the bathroom is.
I just couldn't remember, so I thought I'd stop by. Mind if I had another look?"
They rarely ever refuse. And then I say I'm ready to make an offer, but I'd prefer not to go through the agent, as I didn't get on too well with them.
"Of course, I'm more than willing to pay their commission, because they were the one who led me to you."
Then I draw up the contract and we verbally negotiate and get it signed before I leave.
I prefer making the offer direct. What seller would run the risk of losing a sale, just because the agent wasn't the one conveying the offer to them?
Builder & Contractors:
Get to know a good builder - a tradesman, not a hammer hand.
You want a professional job done. So many people try and save a dollar by getting a cheap unqualified person who ruins the job and costs them more in the long run fixing up their mistakes. Real Estate is a long-term asset; make sure you approach all renovations or repairs to your properties with a long-term view. This includes, for example, painters, tilers, structural landscapers, carpenters and builders. In most cases pest controllers, plumbers and gasfitters are all required to have certification as part of their trade. Always ask to see the tradesperson's credentials, check them out, do your due diligence.
If you want to do this work yourself, be aware that you need to check first with your local building services authority to see what the rules are. In some states in Australia, for instance, if the work you want to carry out yourself comes to more than $6,600 in total, you'll need to get an owner/builder's licence. And if your renovations amount to more than $11,000, you'll be required to complete an owner/builder's course first. Be aware, too, that it's not always cheaper doing it yourself.
Insurance Agent/Broker.
Insurance is a specialist field with a multitude of players in the market. There are literally hundreds of different insurance packages out there, and finding the right one at the right price to suit your requirements takes more effort than it's worth. Let an agent do this for you. And the best part is that it doesn't cost you anything, as their fee comes as a commission from the insurance underwriters.
Property Manager.
As you accumulate investment properties, you'll need a good property manager. They specialise in sourcing good tenants, conducting regular property inspections, and making sure the
rent is paid on time. They are well worth the small fee they charge.
Banker.
There aren't that many around and, once you're into the game, you'll become well aware of current interest rates, packages and trends. Better stilldeal both with institutions directly and through your own Mortgage Banker
(Any game...)
Rules
Generally speaking, there will be different rules for the following types of properties:
• Inner city units
• Innet city houses
• Fringe city units
• Fringe city houses
• Outer city units
• Outer city houses
• Satellite units (units in stand alone towns)
• Satellite houses
Each market is different.
The rules governing buying a new inner city unit are quite different to those that apply when buying an existing house in an outer city suburb.
Then there are rules for
- property you intend living in yourself,
- property you intend renting out,
- property you want to buy and then sell again quickly,
- property you intend holding onto long-term,
- property you aim to get capital gain from,
- property you're buying for a rental purchase plan,
- and property you're buying through vendor finance deals.
Team
Building your team of experts is an essential part of your Real Estate success. Don't be afraid to dump anyone who isn't performing or pulling in the same direction you are.
Quantity Surveyor/Chattels Valuer:
they are experts at providing a comprehensive report on every possible item I can claim a paper tax deduction on.Their report lists every item, its value and what percentage I can depreciate it at on my next tax return. They can also give you an accurate estimation of the cost of renovations that were done in the past.
Accountant:
The difference between a good one and a bad one can cost you thousands of dollars in lost tax deductions.
Valuer:
Use a quality valuer that is approved by your bank. Valuers assess the current market value of a property by comparing the property you are looking at with other similar house sales in the surrounding area. Many valuers or Real Estate valuation web sites offer quick estimation services for a minimal fee — they will give you an accurate guide of what the property is worth. If you think a valuer has valued a property too low, challenge them on their valuation with supporting house sales data and don't be afraid to get another valuation as a second opinion.
Solicitor:
The average suburban solicitor just isn't good enough if you're aiming at investing in Real Estate in a big way. You see, they are generalists. I believe you need to seek one who specialises in conveyancing (property settlement), property law and property litigation.
Real Estate Agent:
Do you need one on your team? And are they a good or bad thing if you're an investor? As I see it agents are a necessary evil! Many good agents that do invest in property (over 90% of them don't) will usually snap up all the good deals for themselves long before you get to hear about them. So the trick is to find a good agent who will pass you the good deals.To begin with, and especially when we are entering a new area, we phone three or four Real Estate agents offices to make appointments with the top agent in each office. When the agent shows me a hot deal and the numbers look good, we enter into negotiations.
If at all possible I never negotiate with the seller through the agent simply because I don't trust the agent as far as I can throw them! The reality is most of them are there only because they couldn't get another job. Most of them see themselves in transition.
So, how do you get around that?
Simple. After they've shown me the property for the first time, I return later that evening, knock on the door and say:
"I was here earlier today with your agent, and I just love the place.
In fact it's the best I've seen so far. We were just driving past on our way home, and my wife asked me what colour the bathroom is.
I just couldn't remember, so I thought I'd stop by. Mind if I had another look?"
They rarely ever refuse. And then I say I'm ready to make an offer, but I'd prefer not to go through the agent, as I didn't get on too well with them.
"Of course, I'm more than willing to pay their commission, because they were the one who led me to you."
Then I draw up the contract and we verbally negotiate and get it signed before I leave.
I prefer making the offer direct. What seller would run the risk of losing a sale, just because the agent wasn't the one conveying the offer to them?
Builder & Contractors:
Get to know a good builder - a tradesman, not a hammer hand.
You want a professional job done. So many people try and save a dollar by getting a cheap unqualified person who ruins the job and costs them more in the long run fixing up their mistakes. Real Estate is a long-term asset; make sure you approach all renovations or repairs to your properties with a long-term view. This includes, for example, painters, tilers, structural landscapers, carpenters and builders. In most cases pest controllers, plumbers and gasfitters are all required to have certification as part of their trade. Always ask to see the tradesperson's credentials, check them out, do your due diligence.
If you want to do this work yourself, be aware that you need to check first with your local building services authority to see what the rules are. In some states in Australia, for instance, if the work you want to carry out yourself comes to more than $6,600 in total, you'll need to get an owner/builder's licence. And if your renovations amount to more than $11,000, you'll be required to complete an owner/builder's course first. Be aware, too, that it's not always cheaper doing it yourself.
Insurance Agent/Broker.
Insurance is a specialist field with a multitude of players in the market. There are literally hundreds of different insurance packages out there, and finding the right one at the right price to suit your requirements takes more effort than it's worth. Let an agent do this for you. And the best part is that it doesn't cost you anything, as their fee comes as a commission from the insurance underwriters.
Property Manager.
As you accumulate investment properties, you'll need a good property manager. They specialise in sourcing good tenants, conducting regular property inspections, and making sure the
rent is paid on time. They are well worth the small fee they charge.
Banker.
There aren't that many around and, once you're into the game, you'll become well aware of current interest rates, packages and trends. Better stilldeal both with institutions directly and through your own Mortgage Banker
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