Property Portfolio by Read Publishing

PROPERTY PORTFOLIO

meet

TOM PANOS Sebastian Sevallo & Mickey Fabbiano

HOW TO ASSEMBLE

YOUR FINANCE TEAM GETTING FINANCE APPROVAL PROPERTY FORECAST 2020

FIRST HOME BUYERS NEED MORE THAN JUST MONEY

Join the Property Portfolio Accelerator Property Portfolio Accelerator

Are you looking to build a successful property portfolio that will deliver a continuous income stream? Would you like to choose your income level and have the flexibility of deciding when to dial back from full time work? Use the Property Portfolio Accelerator to access the information, skills and support you need to fast track your goals.

The Property Portfolio Accelerator is a buyers ecosystem that will show you how to 9 9 Assess current opportunities and identify the best property mix 9 9 Research the market and select optimum locations 9 9 Utilise an extensive range of strategies from renovation to development 9 9 Implement the Modular Investing System to build an agile portfolio

9 9 Select the best purchasing structures to maximise your position 9 9 Access to a qualified team of specialists who are experts in their field 9 9 Includes 12 months Q&A support

CLICK HERE TO LEARN MORE

Tom Panos: 2020 Property Insights

Property Forecast 2020: Who And What To Believe

FHBs: Need More Than Just Money

How To Assemble Your Finance Team

Top Tips To Getting Finance Approval

Sebastian Sevallo & Mickey Fabbiano: Renovation Choices - What Should I Spend Money On?

Logistics For Investing Overseas

CONTENTS PROPERTY PORTFOLIO

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Contributors

Tom Panos is considered as Australasia’s #1 real estate coach and trainer. He opened his own real estate office at 22 years of age and has been immersed in the industry for over 30 years. With a Masters degree in Management and Coaching Psychology, he teaches agents how to attract business and not just chase it. Tom Panos’ weekly coaching videos are watched by over 20,000 agents. Tom conducts training sessions on getting more listings, increasing VPA, stay in touch strategies, buyer and seller negotiation, building your personal brand, buyer management, time management, and using auctions to build an attraction business. His training program Real Estate Gym is the best way to have Tom as your personal coach. Tom also

T O M PA N O S

produces a weekly podcast with John McGrath, Million Dollar Agent and is one of Sydney’s leading Real Estate Auctioneers as well as being a sought after keynote Real Estate speaker.

tompanos.com.au

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Ken is passionate about finding unique credit solutions and challenges conservative approaches to credit. He has five years industry experience as a Finance Broker, having developed a network of relationships within the industry and gathered useful credit insights. Ken believes information is crucial in helping clients make informed decisions and monitors developments from lenders, regulators and media. His background in Superannuation, coupled with his Diploma in Financial Planning, enables him to tailor credit needs in context to clientsâ&#x20AC;&#x2122; goals.

KEN HEW

https://www.linkedin.com/in/kenfhew/

With real estate prices in red-hot markets rising, finding a forever home that fits a budget is a huge undertaking for most families. Often, buying fixer-uppers and updating them to fit personalised needs is the only option. In HGTV's home reno series, "Worst to First," contractors Mickey Fabbiano and Sebastian Sevallo happily take on the challenge of transforming the ugliest houses on the block into the pillars of the neighbourhood. They help each home buyer find a shabby, seen-better-days property, and before long, Mickey and Sebastian exceed expectations and turn dreams into reality.

S E B AST I A N S E VA L LO & MICKEY FABBIANO

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Editor In Chief

Debra Beck-Mewing

Welcome to this edition of Property Portfolio Magazine. We’re excited to share this issue with you. The magazine was created provide you with practical information, ideas and inspiration for your journey towards building a profitable property portfolio. This edition is focused around this year’s market forecast and making preparations to buy property, so we’re very pleased to have one of Australia’s leading auctioneers, Tom Panos, provide his views on the market and advice on how buyers can be successful in the booming 2020 market. This year First Home Buyers (FHBs) will have some extra leverage in the property market, but they’ll need more than just money to be successful so we’ve summarised ways to enhance their property decision making. Rounding out the issue we have included advice on putting together your all important finance team, tips on obtaining finance approval, and insights from the team from ‘Worst to First’ on optimising your renovation choices. Our goal with Property Portfolio Magazine is to support you in making smart choices and help you efficiently achieve financial

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independence and we hope you will make it your go-to resource. Thanks for taking the time to read it. If you have questions or feedback, I would love to hear it so please make contact with me at editor@propertyportfoliomagazine.com

Debra

TOM PANOS: 2020 Property Insights

While youâ&#x20AC;&#x2122;ll hear endless market forecasts from media commentators with hidden agendas or data crunchers making predictions from their desks, thereâ&#x20AC;&#x2122;s nothing like hearing real, unbiased feedback from specialists who actually work on the frontline of the property market.

Property Portfolio Magazine Editor In Chief, Debra Beck-Mewing, had the exclusive opportunity to discuss the 2020 property market with real estate industry super-star Tom Panos.

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PEDIG REE There’s not too many property owners who wouldn’t recognise Tom - either through his extensive print and television work, inspirational podcast series, highly coveted training or his entertaining and successful auctioneering services. Tom has earned his reputation as a skilled and trustworthy specialist during his 30+ year career in the real estate industry, commencing with a fill in job while at university. Loving the work, he decided to stay in the industry and opened his own agency at the age of 22. With the agency breaking sales records, it wasn’t long before Tom was asked to share his knowledge through speaking / training events for real estate agents and he now runs one of the most successful training and professional development businesses in Australia. From a property perspective, Tom walks his talk having built up a significant portfolio over the years. In addition, his auctioneering services are in demand from property owners Australia-wide. Drawing from this knowledge base, outlined below are Tom’s views on the 2020 property market and tips for how buyers can be successful in the months ahead.

VIEW OF 2020 Opportunities - Considering the property market for the next 6-12 months, Tom expects suburbs that experienced a price downturn during the last market contraction - July 2017 through to May 2019 - will see a good bounce upwards. In addition, look for areas that were negatively impacted by infrastructure projects that are now completed. For example, Sydney’s Inner West where a cluster of suburbs were impacted by the WestConnex M4 extension. These suburbs are now surging ahead.

Definitely two speeds – Newly built units are generally lagging behind in price growth. Tom notes the causes emanate from the fact that there is still an over supply along with a stigma for this kind of property with buyers who are concerned about building quality particularly after the Opal and Mascot Towers publicity. In contrast, the market for established / art deco units is very strong and on the increase in line with the general market. Buyer interest – buyer interest is high and numbers are on the increase. Tom says the difference between pre and post the federal election was stark. Returning from a trip overseas in July 2019 “I couldn’t even get a car park at my auctions but earlier in the year we were only getting a handful of buyers turning up,” said Tom. Activity is still strong with the first weekend of 2020 seeing buyers turn out for inspections in large numbers. First home buyers (FHBs) – Tom notes there’s more FHBs active in the market, potentially due to the additions to existing government grants in the form of the First Home Loan Deposit Scheme (FHLDS). This is despite the limited number of FHBs who will qualify for the Scheme as there is a cap of 10,000 approvals per year. This activity will provide an upward pressure on property prices at the entry level. Impact of recent bushfires – will obviously limit market activity in the areas directly impacted for the short term. The good news is that there is such a strong and clear focus on recovery along with the opportunity to rebuild as efficiently as possible. High level market forecast – based on data analysis, agent discussions and on the assumption that there is at least one more drop in the cash rate. p r o p e r t y p o r t f o l i o m a g a z i n e . c o m

MARKET

% Change

Melbourne

+ 10%

Sydney

+ 8%

Brisbane

+ 6%

Adelaide

+ 5%

Darwin

- 2%

Perth

+ 2%

Hobart

+ 6%

HOW CAN BUYERS MAKE THE MOST OF THE CURRENT MARKET? • Understand there is strong competition and factor that into your planning. • Look at suburbs next to others that have taken off and buy ahead of the upswing. • Get clarity on what you’re looking for – is it yield, capital growth or a home? Understand that it’s fairly impossible for one property to deliver on multiple aspects so be prepared to be flexible. This means you need to be prepared to accept lower growth if you’re looking for yield or limited yield if looking for good capital growth. • Match your strategy to your targets and preferences. “For example, when I started out I was really focussed on capital growth. I loved the idea of buying for a lower price and enjoying the growth but I’m now more focused on yield and transitioning my portfolio,” Tom said. • Don’t try and ‘time’ the market particularly if buying your home – remember property is a long game and a few extra thousand dollars will be irrelevant if it means you can live in your ideal location for many years to come. • When setting budgets remember to factor in the cost of being out of the market – there’s quite a few buyers now who are regretting sitting on the sidelines during the recent downturn. 10

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TIPS ON DEALING WITH AG E N T S • Understand that agents are increasingly turning to different methods other than just listing properties on the main property portals. Buyers will need to develop a relationship with agents in their area of focus as they may not be seeing 100% of the properties available if they’re relying on the portals alone. • Buyers should be candid with their targeted agents – this includes providing your budget and property requirements as well as advising that you’re ready and a hot buyer otherwise you’ll be shown the wrong properties. • Be mindful that in an upward trending market guide prices may be low, so factor this in when assessing whether properties are within your price range. • Understand that the agent is ultimately working for the vendor and while they will help where they can, you also need to be clear on your market position. • Be so educated on the market that you can be confident in your pricing, assessing value and opinions of market influences. • When negotiating, the absolute best strategy is to have a plan B and remember that walking away can be part of the negotiation. For more information: www.tompanos.com.au and https://realestategym.com.au/ for training and professional development services targeted towards people who believe they can improve all areas of their life. Also, to get 2020 off to a good start : https:// realestategym.com.au/kickstart-2020/ tompanos.com.au

PROPERTY FORECAST

2020

Whether youâ&#x20AC;&#x2122;re keen to invest in your very first property this year, are a property developer or an individual with multiple dwellings looking to add to your portfolio, it helps to keep up to date on all the latest property data, trends, statistics, and forecasts coming out about the market.

so many people looking to make a buck from so-called forecasting, it can be challenging to know who and what to believe. Debra Beck Mewing from Crave Property Advisory shares her tips on how to take in only relevant, trusted information about property estimates and markets.

However, with few regulations about who can proclaim themselves to be experts, and

With over a quarter of a century of experience in property investing across Australia, Debra is a licensed real estate agent. Sheâ&#x20AC;&#x2122;s also a p r o p e r t y p o r t f o l i o m a g a z i n e . c o m

Qualified Property Investment Advisor (QPIA) and has completed a Bachelor of Commerce and Master of Business degrees. She began Crave to provide trusted buyers’ agent services and advice to others wanting to build their property portfolios.

Finally, cover yourself with some protection to reduce risk. “Get a written guarantee so you can obtain a full refund if you find the advisor isn't delivering as expected."

Through her own experience, Debra knows just how much bad advice is thrown around. This is particularly the case with property predictions. She has some advice for investors when it comes to discerning who to pay attention to. It starts with understanding what kinds of qualifications and licenses people possess.

When asked whom she turns to for quality information herself, Debra had some suggestions. It’s all about going straight to the direct source whenever possible. “I use the purest form of data as my base point. This includes the Australian Bureau of Statistics, Reserve Bank, Australian Tax Office, plus a range of State and Council generated information.”

“Quality advisors are members of the Property Investment Professionals of Australia (PIPA) and will be listed on that organisation’s website,” she said. “The highest level of accreditation is a QPIA. Advisors who achieve this level can use the QPIA logo on their websites and other marketing materials. QPIAs undertake a detailed training course, uphold the highest standard of service, and must maintain regular training.”

As for sales data, Debra relies on RP Data (CoreLogic) and Pricefinder. “I use the data in these sources to analyse targeted markets for each of our clients.” As for forecasters, though, she has one main trusted resource. “The only one I rate is Louis Christopher from SQM Research. He has the best track record of the most reliable forecasts, he’s independent, and focused on delivering clear information to the market,” she said.

There’s more to it than simply having these qualifications, though. “Buyers shouldn’t just rely on the qualification alone. Always check an advisor’s experience and follow them online before taking their advice.”

So, what are some of Louis Christopher’s forecasts for 2020 that property investors need to know? According to his Housing Boom and Bust Report, released by SQM Research, this year should see dwelling price rises occur in most of Australia’s capital cities. This increase stems from interest rate cuts and the loosening of credit restrictions. In particular, Christopher believes Sydney and Melbourne will lead the charge. He forecasts that Sydney will rise between 10% and 14%, while Melbourne’s prices will go up by between 11% and 15%. Other cities are also likely to enjoy record price rises in 2020. After a prolonged downturn, Christopher is expecting the city of Perth to finally get some upward price movement, due to mining investment recovery, and an improved international outlook. He forecasts Perth

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property prices will lift by between 3% and 6% this year. Brisbane is another city that will be assisted by the recovery in mining. Christopher believes the Queensland city should record prices rises in the same range as Perth. Investors should note, though, that Christopher does have some worries about how long this new recovery may last. Issues such as the fact that Sydney and Melbourne are rising from an already overvalued point, and that there is a high rate of housing debt and reliance on cheap credit, means sustainability isn’t assured. When you’re ready to invest again, Debra suggests being on the lookout for people who proclaim to “find” properties for clients, but who are only really selling properties. “These people are commonly referred to as “spruikers”. Usually, the property they recommend will be off the plan, either house and land or recent builds.”

“Spruikers receive big kickbacks from developers, so the property will be overpriced to cover this cost. Spruikers tend to be great at marketing and attract buyers through supposed education or coaching that’s actually more about conditioning people to buy what they want to sell.” To protect yourself, ask advisors about what kinds of payments they receive. “Check whether they receive commissions for sales, or pay for leads. If they take money from anyone else but you, their priorities will be with the person or company that pays them the most. That usually won’t be you,” she said. As 2020 proceeds, do your research, ask lots of questions, and think hard before you sign on any dotted lines for properties. That way, you’re much more likely to see your money well spent, and setting you up positively for the future.

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FHBs NEED MORE THAN JUST MONEY First home buyers (FHBs) are currently in line for the opportunity of a lifetime, but they will need more than just money to ensure they set themselves onto a successful financial path. With the banks offering record low interest rates and the commencement of the First Home Loan Deposit Scheme (FHLDS) in January 2020, the cash will certainly be plentiful, but buyers will need to be on their game in order to make the most of the opportunity. Leading Property Strategist, Debra BeckMewing, said buyers who qualify for the First Home Loan Deposit Scheme (FHLDS) which commenced in January 2020 will need to skill up now on key aspects of the buying process to ensure they make good choices. “We see many first time buyers who are given loan pre-approval but then burn months and months trying to make a decision. It’s these buyers who then fall prey to the marketeers and spruikers who push them into problem properties,” she said. 14

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With property prices predicted to spring upwards in some markets by more than 10% in the next few months, FHBs will be under pressure to make good decisions quickly. Most buyers will have some knowledge of one aspect of the buying process, but to be successful buyers need to be across all aspects. At a bare minimum, consider the following key tips.

It really isn’t all about ‘location’- the most important issue is to ensure your strategy is best for you. Under no circumstances should you be trying to chase ‘hot’ suburbs as this is a recipe for trouble.

If you’re receiving ‘advice’ find out how the ‘advisor’ is being paid. If you’re not paying them, then the advice they’re giving you is baised. This is particularly true if the

advisor is presenting you with a property. They won’t be showing you the full range, only properties where they’re receiving a commission.

information you’re given. For example check the background of the advisor and any developers connected to the property.

If you’re paying for a service, ensure you have a written money back guarantee so if anything goes wrong you have an opportunity to withdraw from the agreement and get a refund. Never pay service fees in full upfront. It’s fine to pay an initial component but never the full fee. This should be a rule for life when using services as the service provider will have limited incentive to complete the job well if you have paid the fee in full.

The worst type of advisor will charge you upfront and also take commissions. Of course, this is illegal however these bad practices are very prevalent in the current market. Protect yourself by validating any

Do not rely on ‘research’ that accompanies a property. Check the information with people and organisations not connected to the sale. This is particularly important when considering new, off-the-plan, or house and land purchases. Ensure you are clear on current prices in your target suburbs – look at similar properties on any of the major property portals for a quick sense check.

Rental guarantees are a big red flag – they’re usually a rip off and you will pay a higher purchase price for properties with the ‘guarantee’. Any property that needs a guarantee is one that may be difficult to rent, often due to the multitudes of other new builds in the same complex. Usually, the

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when they become clear on their target and have an understanding of the process. After buyers have the knowledge, it’s much easier to make decisions and actually buy a property but in the current market they will need to be pro-active”, she said. For those people who want to make their purchases unaided, a range of guides are available from www.craveproperty.com.au. For those who would like some affordable independent assistance, Crave has developed a buyers support system – the Profitable Property Formula. It’s an essential tool for buyers who want the knowledge and support while doing the buying ‘legwork’ themselves.

guarantee will only last until the vendor / developer has sold off their interests in the complex.

Always check contracts, conduct strata reports and building inspections, and gather as much information as you can before making an offer – use a checklist to increase your efficiency.

Anyone talking to you about property should have a license to do so. Check each State/Territory Office of Fair Trading to ensure the license is current. “Of course, buying a property has many nuances, twists and surprises but if they get it right, buyers can set themselves up for life. This is only achievable if buyers are prepared and organised. “It’s easy to become overwhelmed, but we see how quickly buyers increase their confidence

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The Profitable Property Formula is unique in that buyers can obtain information specific to their needs, making it easy to overcome any barriers for each individual. It includes the following components. • Access to a range of tools, checklists and guides helping buyers through the buying process from start to finish. • Live group coaching streaming sessions where buyers can ask their questions directly to specialists. • Help and support from a focused, private community. • ‘Buyer Insider’ sessions where specialists provide insights that will provide the buyers edge.

Introducing The Profitable Property Formula

Profitable Property Formula

Buying a property - either a home to live in or for investment - will be one of the most expensive purchases you will ever make. Now you can access the information and skills you need to buy confidently.

The Profitable Property Formula is a toolkit for buying property successfully. 9 9 Streamline your purchase using an exclusive range of guides and checklists 9 9 Assess property like an expert 9 9 Use the Property Agility classification to select the best property for you 9 9 Make offers and negotiate with confidence

9 9 Access a team of specialists across every aspect of the property market 9 9 Overcome barriers by asking questions about your specific purchase.

CLICK HERE TO LEARN MORE p r o p e r t y p o r t f o l i o m a g a z i n e . c o m

HOW TO ASSEMBLE YOUR

FINANCE TEAM 18

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NEVER USE A ONE-STOP-SHOP The absolute first rule is to avoid the trap of the ‘one stop shop’. While it might seem like you’re going to save a little time, you won’t get the best long term result. You want the best advice from each specialist, and to achieve this your specialists need to be independent of each other. We have listed below the best practitioners we have found in the three ‘finance’ fields of mortgage broking, financial advisers and accountants. Occasionally you may find some service duality – for example your finance advisor may coordinate your mortgage finance. For optimum results, aim to have at least one independent component and always get independent advice if one of your finance service providers ‘selects’ a property for you. Guaranteed you will be paying a premium price and the person ‘selecting’ the property will be receiving the kick-backs for the sale. The people listed below have been selected based on the quality of their advice, the depth of their experience and their high level of ethics. While this is a vetted list of the highest standand, it should be used just as an exceptionally good starting point.

By Debra Beck-Mewing Anyone who is financially successful will tell you they didn’t achieve their goals without good advice and support. This is particularly true when building a profitable property portfolio. Property is a team sport and to get the best results you need to select your team members wisely.

When selecting advisors, the critical next step is to ensure you gel well with the advisor. You will be sharing some very personal aspects of your life with these people, so you need to ensure they match your personality, communication style and focus. ‘Focus’ is included because many advisors aren’t property focused, so if that’s your focus you need to work with advisors who understand the nuances of building a positive property portfolio and, ideally, have portfolios of their own. p r o p e r t y p o r t f o l i o m a g a z i n e . c o m

ASSEMBLE YOUR FINANCE TEAM MORTGAGE BROKERS

A C C O U NTA NT S

• Ken Hew – Avvora Finance

• Hima Gupta – 3E accounting

https://avvora.com.au/

• Paula Hardin – Aussie Home Loans https://www.aussie.com.au/findstore/nsw/annandale.html

https://nationaldirectory.com.au/3eaccountingsolutionsptyltd

• Simon Alford – Moore Stephens, Burwood NSW https://www.moorestephens.com.au/

• Nicole Cannon – Pink Finance

• Kian Ghahramani, Principal, RSM Australia

• John Micalizzi – Blue Lantern Finance

• Scott Kay – Integrity Plus Accounting

• Tim Helman – Professional Mortgage Advisors (PMA)

• Luke Mitchell – Murchisons

https://pinkfinance.com.au/

https://bluelanternfs.com.au/

• Dylan Salotti – Divitis Finance

https://www.divitisfinance.com.au/

• Marcus Roberts – Brighter Finance https://brighterfinance.com.au/

• Umit Talarico – Premier Lending https://premierlending.com.au/

• Samantha Harvey – Aussie Home Loans www.aussie.com.au

• Tim Vo – Vo Finance FINANCIAL ADVISORS • Greg Woods – Fiducian

https://www.fiducian.com.au/

• Steve Cooper – Cooper Barber

http://www.cooperbarber.com.au/

• Fox and Hare Financial Advice https://foxandharewealth.com/

• Finn Kelly – Wealth Enhancers https://wealthenhancers.com/

• Tristan Scofo – Purpose Advisory https://purposeadvisory.com.au/

• Philippa Hunt – Wise Girls Money Academy https://wisegirlsmoneyacademy.com.au/

• Alison Williamson - Fiducian http://www.fiducianfs.com.au

• Sam Ghoreyshi – MoneyClip Private Wealth https://moneyclip.com.au/

• Greg Dobrin Sureserve Financial Services http://www.sureserve.com.au/

• Lara Gomez Beresford Financial Planning https://beresfords.com.au/

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https://www.rsm.global/australia

https://www.ipaccounting.com.au/ http://www.murchisons.com/

• Peter Samios – Samios Partners

http://www.samiospartners.com.au/

• Leah Supple – BANTACS Melbourne https://www.bantacs.com.au/

• Jeff Banks – MWL Accountants https://www.mwl.com.au/

• Daniel Vasin Accountants

https://www.vasin.com.au/meet-daniel-vasin

• John Kalachian Fortis Accounting Partners https://fortisap.com.au/our-partners/

MONEY COACH • Max Phelps – Golden Eggs Money Coach https://goldeneggshomeloans.com.au/

The advisors included in our list are best used if you have already saved part of your deposit or you’re looking to refinance. If you’re still at the stage of wondering whether you can save your deposit, Money Coach Max Phelps has compiled a book outlining steps for getting your money organised.

PROPERTY PORTFOLIO ASKS FINANCE BROKER KEN HEW TO SHARE HIS TOP TIPS FOR PEOPLE THINKING ABOUT BUYING PROPERTY IN THE NEXT SIX MONTHS. With the home loan market seeing an influx of applications, it’s good to consider a lender’s assessment time frame, most are operating at five business days to assess a loan but some can be as high as 14 working days which is nearly 3 weeks. There are also a lot of interest rate changes between lenders despite the official cash rate being left unchanged since October’19. Lenders are loosening credit policies by making assessment criteria easier to meet, which makes getting a loan approved easier. Choosing lenders based on interest rate is a one dimensional approach for selecting a lender and I’d encourage borrowers to take a comprehensive view on home loan selection. For example, you may have casual income which you want the lender to include. Depending on the lender you choose, you could have none or most of your casual income included in calculations. Another common one could be a lender who will offer a high borrowing capacity. Just because one lender says no, it doesn’t mean all lenders will take the same stance. Here are some things to consider apart from interest rates.

• Risk appetite (are they willing to lend on high density units? Will they accept your property if it's a small studio or specific post codes? Are they happy to consider Interest Only loans?) • Features (Do they offer advanced repayments on fixed rates, do they offer rate locks, is their offset account a full transaction account, do you need access to a branch for transactions) • How stringent are their credit policies? (Does the lender ask for a lot of information and want everything to be 100% perfect?) Planning is one of the key items you can do to help reduce the stress during the purchasing process. Getting your home loan sorted before committing to a purchase is ideal and allows you to structure and select a lender to meet your immediate and longer term goals. The other benefit of planning is having contingent plans in the unfortunate event your primary lender decides to reject your application. You can even slightly alter your plans to improve the odds of a home loan approval. For example, reduce your purchase price or delay your purchase to increase savings to avoid critical LVR thresholds.

• Home loan assessment speed • Borrowing capacity • Unique policies which compliment your scenario (ownership structure, accept guarantors, Lender’s Mortgage Insurance waiver for certain professions, high Loan-to-Value Ratio accepted)

https://www.linkedin.com/in/kenfhew/ p r o p e r t y p o r t f o l i o m a g a z i n e . c o m

TOP TIPS TO GETTING FINANCE APPROVAL There are many reasons why people need finance perhaps to buy a car, go on a holiday, because they are getting married or in so many cases they are taking a giant step onto the property market. Applying for finance can often be a daunting task and obtaining finance can sometimes be difficult especially if you have a history of debt or are looking at refinancing or need to get fast approval due to a short settlement on that dream property. 22

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Below are some simple and practical tips which are sure to help you improve the likelihood of your finance application getting that all-important tick of approval. Take care of debt: Most lenders take into account debt you currently have that needs to be paid off. Currently being in debt could affect your chances of getting finance, so itâ&#x20AC;&#x2122;s important that you handle this right away. Settle any payments on credit cards and if you have open ones, close them so

that the financial institution you are applying with is assured that you wonâ&#x20AC;&#x2122;t be accumulating any further debt elsewhere. Ensure your finances are in order and your taxes up to date: If you are applying for finance for anything but especially property finances then it is essential you have your financial affairs in order, particularly your tax returns. You need to be able to demonstrate you are fiscally responsible. Apply for the appropriate loan: All financial intuitions will check in with your employer and want to know your exact earning capacity. They will be looking to see that you earn a sufficient amount that will allow you to pay off the debt in addition to meeting your living expenses. Make sure you only apply for a loan that you can comfortably service.

Work out your budget: In most cases the borrowing capacity you will be offered will be determined by both your income and your credit rating. Based on these two things a certain sum will be available and it is best to work this out prior to submitting your official loan application by getting pre approval. Before you go through with a finance application it is always sensible to firstly apply for pre approval to make sure you are in fact eligible to take out a loan and also so you are aware of how much your budget will be for your dream home. Become a saver: If you are considering applying for future finance it is always a good idea to demonstrate you have a history of savings over a period of time. By regularly making deposits into a savings account you will be showing financial institutions that you have a

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history of savings and proof of how much you make and can produce at the end of each month. Making deposits in the months before you apply for the loan will give you a better chance of approval than depositing one large amount at the time of application. Most financial institutions are looking for patterns of savings behaviour. Understand transaction costs such as stamp duties and fees: A rookie error that many new borrowers make is to not fully understand transaction costs on purchases and refinances. Borrowers need to make sure that they fully understand all fees and costs associated with finance. There are many free stamp duty calculators available online to help you get an idea of associated costs to your loan, but it is helpful to ask your broker or lender to provide what is known as a â&#x20AC;&#x2DC;funds to completeâ&#x20AC;&#x2122; calculation, so you can clearly see your financial position in relation to transaction costs. 24

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Get a document checklist before lodging your loan application: To ensure that you have the best chance of getting finance approval, it is important to be organised, prepared and provide the financial institution with all the information they need. Different lenders have different requirements. Some require more paperwork than others, so check in with your finance broker and ask them to provide you with a checklist of documents that you will need to fully complete your loan application. Getting finance approval is very important and you must understand that there is a lot to be checked before any institution will hand over money. By following the above tips you will be setting in motion the best possible scenario for you to get finance approval and one step closer to getting onto or expanding your presence on the property ladder.

SEBASTIAN SEVALLO & MICKEY FABBIANO:

RENOVATION CHOICES WHAT SHOULD I SPEND MONEY ON?

Renovating. For some, this word brings up a plethora of horror stories; budgets blown out, relationships put to the test, or a house that is unlivable for way longer than expected.

but – importantly – offer families wishing to stay in their communities a chance to evolve their living space as children grow up and needs change.

However, for others, taking on a fixer-upper, either to live in or renovate, is an exciting process. Restoring a house to its former glory and beyond can change lives, transforming not only the physical space but the way occupants feel inside, how they interact with each other and the way they move seamlessly through their day. Renovations add value to a house,

This is why Sebastian Sevallo and Mickey Fabbiano, hosts of HGTV Canada’s Worst to First, love the construction industry. “I love standing in a space and imagining/ designing the possibilities and then making them happen. I’m addicted to the transformation, not just in a way the space p r o p e r t y p o r t f o l i o m a g a z i n e . c o m

looks but also in how it feels. It can change lives” Sebastian said. And for Mickey, the passion he has for his job extends way back to childhood; “Since I was a kid, I’ve been around and involved with construction. Going back as far as my family tree can reach, I come from a long line of carpenters and trades people,” Mickey said. “From when I was a kid, I would hear my parents talk about the market, the trends and projections of where it is going. I always got excited to check out a building or lot, hear my mom and dad talk about the potential it has, weighing out the pros and cons and seeing that transformation come to life.”

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The duo has kindly shared their tips for wouldbe renovators to ensure their dream becomes reality – not another horror story.

W H AT T O L O O K F O R I N YOUR PROPERTY SEARCH Both agree that deciding to renovate or not comes down to weighing up the pros and cons. One of the major cost and timeline blowouts to renovating is unplanned repairs to foundations, structure and roofing. “Having a house that has a strong foundation, good square footage, and a solid structure are key elements to a good fixer-upper. When you know that you won’t have to invest big bucks into major repairs, then more money

is left over for design elements and creature comforts,” Sebastian said. Where possible, ask for a house plan but don’t rely on it to tell you the whole truth. Look for signs the house was well-maintained, check for rot and ask questions about any previous renovations that may have been done. You also need to think about the numbers, especially for a house you are planning to sell. “If I’m looking to buy a house to flip, I’m going to look into the work I need to do to the house, plus what I paid for the lot, as well as see where the market is and where we think it might be going when we are done. If the numbers make sense, then the reno makes sense,” Mickey said. Finding a house to live in isn’t quite as straightforward as the facts and figures

because emotion also comes into play. Here, it is more about what you are willing to do, or sacrifice, in order to create your dream home. “For example, if you find a house in a neighbourhood you just love or a lot that backs up to the ocean, but the foundation is jeopardised, then the choice comes down to how much that neighbourhood or ocean view means to you, because you can’t reno a view. If you decide to go ahead, know that you might have to spend half your budget to fix that one problem,” Mickey said.

PLANNING A HOUSE R E N O VAT I O N ? Sebastian and Mickey advise all renovators to plan extensively before grabbing the sledgehammer and sinking dollars into new fixtures. Once work has started, unplanned changes can be costly, plus you need to know

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how long the renovations are expected to take so you can either sell or move in accordingly. Do your homework and ensure you are on top of issues such as getting plans drawn up, permits are in place, and you have a realistic budget to adhere to. It also pays to think ahead to any potential problems that may pop up along the way, such as inclement weather or delays with deliveries. Don’t feel that you have to do it all yourself either; “Remember, if you don’t know - ask. Hire professionals to help you avoid stress and unneeded cost,” Mickey advises.

W H AT T Y P E S O F C H A N G E S SHOULD YOU MAKE TO A HOUSE?

1. Removing walls The most frequently requested change Sebastian and Mickey see is opening up spaces. “It’s no secret everyone seems to want open concept these days; tearing down physical walls seem to help people break down mental walls in their life,” Mickey said. Sebastian agrees; “Biggest bang for the buck is opening up walls, creating space and flow where there was none before.”

2. Kitchen renovations The kitchen is the prime area to make changes to a house, as it often serves as the hub to the home, it’s where people begin their day and serves as a central meeting point for occupants and guests alike. It is also a great

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space to make simple but very effective changes that can change the feel (and value) of the house with low cost and time commitment. Firstly, consider the layout to the kitchen. “When people look at a house, and in particular a kitchen, they look to see how it will work for them and if it is the right fit for their lifestyle or daily routine. Creating a layout that flows from space to space and is more versatile doesn’t just make better use of the square footage, but also can appeal to a larger demographic,” Mickey said. Consider adding an island bench to increase useable space and bring people to a central point, as well as utilising over-counter cabinets and countertops with raised eating areas to declutter the area. For a quick and easy kitchen facelift, swap outdated cabinet doors and fixings with new versions. If you are artistically inclined, a fresh coat of paint or lacquer restores tired cabinet doors to their former glory for little cost aside from your time. The splashback is another relatively simple and cost-effective kitchen reno that can make a huge difference to the look and feel of the room. “Removing and replacing your back splash can change the whole way you look at your kitchen; light and airy or classic contemporary. Simply changing the colour, type, pattern or style can really make a difference,” Mickey said.

3. Lighting The way a room is lit can have a dramatic impact on the overall feel, so look closely at where the lights are and how you can better enhance the features of the room to make it more welcoming as well as functional. For example, under cabinet lighting in the kitchen offers ambiance, plenty of light for cooking and a lovely highlight for key components such as the splashback or stone benchtops. In other rooms, a lightshade that complements the overall feel can work wonders in bringing it all together, as can some well-placed downlights or free-standing lamps.

4. Flooring Now that you have looked up at the lighting - don’t forget to look down too! Flooring holds a great deal of weight when it comes to resale value as well as liveability, so you should consider both the practical as well as aesthetic properties of what is underfoot.

the flooring, you make the house feel more inviting,” Mickey said.

5. For sellers – keep it mainstream If you are renovating for you and your family, you have an open license to make the house exactly as you like it. However, for those looking to sell, Sebastian and Mickey’s advice is to keep the design neutral. “If you’re planning on renovating with the intent to sell, a more mainstream design is always best. Do not get too personal or particular with the design, because then you are narrowing your market,” Sebastian said.

6. And lastly – be brave. “Don’t be afraid to build the home of your dreams, yes there are lots of horror stories out there, but do your homework and stories are all they will be,” Mickey said.

“Depending on your lifestyle, you might want something more durable, softer on the feet, scratch proof or easy clean. By updating and, where possible, connecting rooms with

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Logistics For Investing Overseas

As real estate becomes more and more out of reach for the average Australian, many are looking overseas to start or boost a property portfolio. A simple online search shows there are bargains to be had in the USA, UK, Asia and Europe, where you can pick up a castle in France for less than a Sydney unit. The overpriced market in Australia can make any other region seem tempting, but beware of the many pitfalls and risks with an overseas investment. Language and cultural barriers, different property laws, tax jurisdictions and access to finance can make overseas investment an absolute minefield. Although when youâ&#x20AC;&#x2122;re sipping wine at your Italian villa, you might mind less. As with any decision to purchase property, research is paramount. What looks like a bargain online may have hidden costs in renovations, stamp duty or taxes, or may not be in a desirable location to get the return you require. A site visit is a great excuse for a holiday, and to determine whether you want a long-term commitment with this country and area. While your options are only limited to countries that

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allow foreign investment, think carefully about where you buy. Whether you are looking for a holiday home or a rental property, it is likely you will need to visit the area and deal with local people from afar, so ensure you find a cultural fit. If you plan to rent out the property, meet with agents and ensure you get legal advice on the transaction and your obligations as landlord. In the USA in particular, property law varies across the states, so be sure to put aside a budget for specific advice for each state you consider. You may find a property in Spain, Italy, Greece or the USA for less than $100,000, and you may have savings to be able to purchase in cash. But if like most people you require finance for your overseas investment property, more research is required. In many countries you will need a deposit of at least 10-20%, and an additional 5% to cover stamp duty, conveyancing, and other legal advice that might be required. The upside is that finding 10-25% of the purchase price for an overseas investment can be much easier than for the average Australian home. Australian banks canâ&#x20AC;&#x2122;t take a foreign property as security for a home loan. But if you have more than 20% equity in any existing Australian properties, you may be able to re-finance to an 80% loan to valuation ratio to free up some cash. The

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next step is to speak to an Australian bank with international branches or international banks with operations in your investment location, for example HSBC and Citibank. Or, contact the local bank in the country of investment. Note the process may be quite different from a loan application in Australia and there are no guarantees that a loan will be granted, however favourable the deal. Banks may set a lending limit as well as requesting proof of income and assets. Before entering into any overseas property investment, be sure to talk to a tax accountant familiar with the tax rules in your target investment location and Australia. Investing overseas can result in unintended tax and residency issues, with high penalties for noncompliance. An expatriate tax advisor can help you to determine the potential tax consequences and ensure all the appropriate paperwork is filed on time. Again, the USA has a complex and onerous tax system that varies between states. Last but not least, ensure you have a trustworthy local person or business overseeing your investment. An absent owner can be a vulnerable target for scammers, so make sure you get regular updates on your investment to maximise value.

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