Buying your first home

What do I need to know when buying an apartment off the p... Buying ‘off the plan’ provides investors with the opportunity to buy some of the best-positioned apartmen...
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Buying your first home?

The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions. Click here for full Terms of Use.

What are the most important things to look out for at open home inspections?

Open house inspections can be equal parts fun, exciting and nerve-wracking, especially if you find yourself falling in love with a property at first sight.

However, there will be plenty of time to dote on your home in the future - inspections are all about keeping your eyes open for any signs that your potential new abode might be a major lemon.

Homes may not have voices, but that won't stop them from trying to tell you something. Here are some of the more serious open inspection red flags to be on the lookout for.

A shaky foundation

It's often said that a strong foundation is the most important part of whatever's built atop it, and this can hold true for houses. While costs can vary, cracked foundations are notoriously difficult to fix and can cost homeowners tens of thousands of dollars.

Keep an eye out for cracks on steps and walkways outside. Small cracks may be normal and come with age, but wide, horizontal cracks may be a dead giveaway that the home is falling apart underneath.

Wet worries

Nothing quite compares to the risks associated with water damage. Not only can moisture rot building materials, it can lead to the growth of mould and mildew. In turn, this can lead to serious respiratory problems for people with allergies.

Signs of potential water damage include dank, musty smells, water stains, mould spots and warped walls. While water damage itself can be fixed, even more important is what caused it. After all, a leaky pipe will be much easier to fix than a hole in your roof.

Pesky pests

Not only can vermin and insects make your skin crawl, they can also be terribly difficult to get rid of. The damage caused by pests like mice and wood borers can be far-reaching, and the costs associated with eliminating them aren't cheap.

During an inspection, take time to look around for signs of pest problems. These include dead bugs, animal droppings and mouse holes.

How can you grow vegetables with a small garden?

There’s no better way to eat healthy, save money and make the most of your property than to plant a garden.

Some home owners may feel overwhelmed by the idea – after all, not everyone is born with a green thumb. However, creating a varied and delicious garden full of herbs and vegetables can be easier than you think.

Herbs

Planting herbs is a great first step for burgeoning gardeners. Best of all, because they require such little space, even property owners with little room can have a stunning herb garden. In fact, herbs can even be grown easily indoors!

For instance, all you need to do in order to always have fresh basil on hand without visiting the supermarket is place a basil plant in a window that gets at least a few hours of direct sunlight each day.

The same can be done with delicious herbs like rosemary, sage, mint and chives.

Veggies

Vegetables like carrots, radishes, onions, tomatoes and lettuce are also very easy to grow for amateur gardeners.

Additionally, just like with herbs, there are plenty of ways to grow fresh veggies if space is an issue.

For example, while garlic cloves are a popular cooking ingredient, they are often too bitter to the taste to cook with when they sprout. But instead of tossing these in the garbage, you can simply place sprouted cloves in a glass of water and grow new sprouts.

These sprouts are not as overpowering as garlic cloves, and can go great in a number of dishes or as a garnish.

Lettuce stems from a head of romaine lettuce can also be used to grow fresh produce. All you need to do is place the intact stem in a bowl with approximately a half inch of water and place it on a windowsill that gets some sun.

Soon enough, new leaves will grow and you’ll be on your way to crafting a delicious salad.

What can I do to create more storage in my home?

Storage space may not be the first thing that jumps to mind when considering must-haves in your home, but as those will little storage space know, a tiny bit of room goes a long way.

Fortunately, there are plenty of crafty ways to give yourself more storage space, whether in the bedroom or the kitchen.

Think vertically

Most homeowners think in terms of floor space, but there is plenty of room being unused higher up.

Whether you invest in tall bookshelves, hooks to hang from walls and doors or simple shelves installed in bare areas, make sure you maximise how much of your vertical space you're taking advantage of.

Stay out of sight

If you have a lot to store, chances are you're worried about a cluttered home. After all, no one likes to look like a hoarder.

Luckily there are plenty of out of the way spaces in which to store items. Under beds is one great option, as guests will not notice if you expertly pack boxes and bins that can easily slide under where you sleep.

Closets should also be utilised to the fullest degree, whether this means taking advantage of the coat closet in the entryway or simply adding shelves to your bedroom closet in an attempt to create more space.

Slim down

Perhaps the best but least popular piece of advice regarding storage is to get rid of what you don't need.

Many people are unable to part with their possessions, even if they're broken or no longer needed. However, holding on to these things makes storage an issue and turns an already stressful time like moving into a nightmare.

Think long and hard about what you can part with and then have a garage sale. Pocketing some extra cash will help soothe the sting of saying goodbye.

Most First National agents have 'Garage Sale' signs that they're happy to let you borrow when you need them. Give your local member a call for assistance on 13 16 66.

What are the best insulation options for my home?

Insulation is an often-overlooked piece of the homeowner puzzle. Not only can it keep you warm during winter and cool during summer, it can do wonders for your energy bill.

With this in mind, if you find yourself making decisions regarding the type of insulation to use inside your home, it can pay off to understand exactly what the pros and cons of each option are.

Fibreglass

Perhaps the most well-known type of insulation, fibreglass is created using rock slag, recycled glass, quartz sand, soda ash, limestone and boron. This insulation comes in blankets, segments and loose fill.

It can be found at your local hardware store, and is probably the most widely used insulation material by DIYers.

Wool

Comprised of either new or recycled sheep wool, this type of insulation is often blended with other preservatives and materials to make it stronger. It is also usually treated to make it resistant to pests, mould and fire.

Wool is slightly less effective than fibreglass at containing heat, but the chemicals it is treated with make it more fire-resistant.

Synthetic

Synthetic insulation can come in various forms, including polyester and polystyrene. Polyester is more affordable than fibreglass while offering the same heat-containing properties, while polystyrene is actually better than fibreglass at containing heat.

Both types of insulation are long-lasting, but are also vulnerable if exposed, especially to water. Additionally, polystyrene can shrink over time.

Foam

Made out of urea and formaldehyde, foam insulation is pumped or injected into existing walls before it dries and becomes a solid shape.

This can be very beneficial to homeowners who do not wish to remove wall linings or cladding. However, foam insulation can lose its heat-containment strength as it dries, and is not suitable for brick homes.

These are only a few of the options available for home insulation, and regardless of which you choose, it's important to take effectiveness and cost into account, as chances are you'll be living with the choice you make for quite some time.

How do I approach neighbours about a nuisance?

In a perfect world, all our neighbours would be our friends and we'd regularly trade cups of sugar and lend out lawnmowers with smiles on our faces.

Unfortunately, this is not always the case.

Be it a noise issue, a property boundary dispute or any other problem, there will likely come a time when you'll need to approach a neighbour about some kind of nuisance.

When this situation arises, it's important to keep your cool and follow some general guidelines in order to keep the peace and have your home remain a sanctuary, not a battleground.

Timing is key

If a problem arises, it's a good idea to speak with your neighbour sooner rather than later. This will give you less time to stew on something they may not even be aware of.

With that said, if you're angry, it's probably a good idea to hold off on approaching a neighbour until you've had some time to cool off.

Either way, when you do approach your neighbour, do so at a convenient time that will give you ample opportunity to talk. Banging on someone's door in the middle of the night is not ideal.

Cordial is better than cranky

A neighbour that keeps you up at all hours of the night with blaring music may lead you to write a nasty note or yell some choice words over the fence, but this strategy has the potential to backfire horribly.

After all, it's not as if your neighbour will suddenly pack up and leave overnight. You have to live next to this person, and if you start a feud, it could turn your homelife into a living hell.

That's why it's important to be polite and reasonable in all dealings with your neighbour. Honey really does attract more flies than vinegar in the end.

How can I be sure I’m ready to buy?

You can be certain you’re properly prepared when you’ve covered these bases:
  • You’ve saved your deposit, consulted a mortgage broker or financial planner and made sure you can afford the monthly repayments on your proposed property loan
  • You’ve prepared yourself mentally, meaning you’re prepared to move on from being a renter and sacrifice the flexibility, or you’re ready to invest in property and accept the responsibilities and concerns of becoming a landlord
  • You’ve properly considered where you can afford to buy and the standard of property your budget will stretch to
  • You’ve done the footwork in the suburb/s you want to buy in and feel confident you understand fair property values
  • You’ve considered whether it would be wise to obtain income protection insurance, in the context of your personal and family obligations
  • You’re happy that the real estate market conditions are right for you and that you’re not buying because you feel compelled by others
  • You’ve considered renting versus buying and weighed the benefits and downsides carefully
  • You’ve received legal advice (or at least had a Conveyancer inspect the contract of sale) and you’ve carried out a building and pest inspection that is to your satisfaction
  • You’re prepared to accept your obligations as a good neighbour i.e. contribute your share to maintenance in a strata plan or share costs of replacing fences and pruning gardens with houses

What are some of the common mistakes landlords make?

Some property investors choose to manage their own rental properties. This has both advantages and disadvantages. One advantage is that you can save on real estate agent costs but there are challenges you need to be mindful of. Some mistakes self-managing landlords make are:
  • Access – Landlords must obtain permission from their tenant to access their property - some fail to give adequate notice. Whether it is for inspections or to undertake maintenance duties, landlords must not ignore the rules about access
  • Bonds – Some landlords ask for more than four weeks rent (which is against the rules) and/fail to lodge a rental bond with the appropriate authority, where applicable, in their state
  • Proper documentation – Some landlords fail to put written tenancy agreements in place, complete comprehensive property condition reports, or keep proper records of rental payments. This can lead to significant difficulty if or when a dispute arises.
  • Charging for utilities – There are clear rules for when you can and can’t charge for water usage and other utilities but these vary from state to state.
  • Failing to make communication easy – Some landlords fail to provide tenants with their full name and address or phone contact details. This can make it difficult for tenants to communicate about problems or respond appropriately in emergencies
  • Not seeking help – Landlords often forget they can seek guidance from appropriate tenancy authorities in their state. Many services and information sheets exist and state based real estate institutes can help direct landlords to the help they need.

What do I need to know when buying an apartment off the plan?

Buying ‘off the plan’ provides investors with the opportunity to buy some of the best-positioned apartments within a complex. When the market is rising, it can also sometimes offer property investors a capital gain by the time construction is completed.

Here are some tips to help you make sure you make the decision that’s best for you:
  • Make sure you look carefully at the displays that developers make available. These will show examples of carpets, tiles, kitchen fittings and finishes, colour schemes and general fittings.
  • Ask about previous projects that the developer has completed. Arrange an inspection to make your own judgment as to the quality of construction
  • Ask residents of the developer’s previous projects how happy they are with the property they purchased
  • If you’re not confident you understand floor plans, consider asking an architect to assist you with your decision making
  • Banks generally wont provide unconditional approval of your property loan when you buy off the plan. If the market moves downwards, between your purchase and settlement, you will need to be prepared to find additional funding
  • It is a good idea to include a finance clause in your contract and get a valuation ‘as-if-complete’ when you’re getting your initial approval. This will allow you to gauge how the property stands within the current market, as well as how the bank views the area and the property’s potential
  • Get legal advice before signing a real estate contract. Make sure you understand delivery timeframes, sunset clauses, size variation clauses and confirm that you are buying what you believe you are buying
By conducting your due diligence and taking your time, you can take advantage of what off the plan purchasing can offer buyers; a way to secure a quality property in the future, at today’s price.

Should I get a building and pest inspection?

Building and pest inspections typically cost around five hundred dollars but are a vital part of the due diligence process when buying a house. When buying an apartment, a strata inspection report may be more appropriate, depending on the size and construction of the block. Remember though that almost all inspection reports reveal some form of problem, particularly with older properties.

A building and pest report will provide crucial guidance as to the condition of the property you are considering and can be useful in price negotiations, if significant problems are present. Here are some tips on understanding and responding appropriately when you receive your report:
  • Don’t be shocked if your report is in the order of 30 or more pages. That’s normal.
  • The presence of ‘past termite activity’ should not be viewed as a deal breaker. What is important is the extent of the damage and whether there is evidence that corrective action has been taken. Naturally, if current termite activity is present, this is potentially serious and needs to be fully assessed and dealt with
  • It is the building inspector’s job to point everything out that he/she sees to ‘cover’ themselves. It’s important you calmly read through the information and understand what it means
  • If you have a question, phone the inspector. They will often be happy to discuss their findings and explain their relevance.
  • If major faults have been found, discuss these with your real estate agent. It may be possible to negotiate a suitable adjustment to the agreed property purchase price.
  • Be realistic. A small range of typical faults may not be fair grounds to renegotiate price

How do I work out market value so I don’t overpay when buying real estate?

"Market value" is whatever a willing buyer will pay for a property when it sells.

While this advice doesn’t help new buyers, or even experienced buyers, there are ways to work out what you should pay for a property. Here are our tips:
  • Use technology. Many real estate websites provide suburb median prices and recent sales details. Remember that a median price is only indicative of the middle price in a suburb; it may not reflect the value of the property you are considering
  • Ask real estate agents
  • When buying an investment property, rental returns are the key factor in determining value. 5 per cent gross rental return is considered the ‘rule of thumb’ which essentially converts to $1 in weekly rent for every $1,000 spent buying a property
  • Obtain a valuation. Formal valuations can cost between $500 and $1,000 but a licensed valuer must support his or her indicative price with solid comparative market evidence
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