Buying an investment property?

When buying an investment property there are going to be a number of different things to consider than when buying a home for yourself. Why are you buying this investment property?  Are you are going to fix it up?  Will you flip it? Or are you going to hold onto the property and rent it out.

When investing in a property, it’s necessary to acknowledge there’s a different set of criteria for choosing the type of property you’ll want. For strong capital growth you need to hunt down a property that will increase in value. This might take some time, but if you choose wisely it will be worth it:

Areas with high rental yields compared to the property price
These are typically properties closer to the CBD rather than on the outskirts of town.

Research recent sale prices for an idea of prices
This can be done simply by looking at the real estate portals under the Sold section.  You can even filter your search by the features of the property and the suburb.

Is there a strong rental demand? Look for tight vacancy
Most tenants want to be close to lifestyle venues and locations like live theatre, bands, cafes, beaches, water ways or sporting arenas.  Places they can walk to without the getting the car out.

Is the property close proximity to schools, shops, hospitals, public transport?
Parents and the elderly often have the need for medical centres and specialists.  They may not drive and are looking for a home where a bus or train is nearby and where parents can walk the kids to school.

What will the maintenance costs be like?
How old is the property?  Does the property you’re considering need exterior painting every ten years or so, or is it brick?  Is it near the beach and salt air? Does it have a swimming pool?  How big are the lawns? Is it two storey?  is it in a strata complex where you’ll have levies to pay?

Are there any nearby developments or scheduled zoning changes? 
New developments can be both a negative and a positive.  What impact will they have?  Casting shadows?  Causing traffic congestion and lack of parking? Improving street appeal and values?  Changing a zone can be very lucrative.  Each council has a different set of zonings so to give you an example let’s use Newcastle City Council where most homes are zoned R2 which means Low Density Residential.  If this was to change to R3, is Medium Density and it now means you could build townhouses on your parcel of land.  R4 means you could build units up to 8 storeys high and a Mixed Zoning means you could have both residential and business!  The more you can do with the block and the more you can get onto it will determine its value.

How many bedrooms, bathrooms and parking spots?
Just because it’s bigger does not mean its better!  Four bedroom homes with 2 bathrooms and 2 lock up garages in Aberglasslyn or Chisholm may give you a weekly rent of around $520 and a two bedroom, 2 bathroom apartment in Wickham with one car space will likely give you back $685 per week but cost the same to buy.

For more information or to have a discussion about your needs, call Annette Pinkerton today.




Shared-Equity Trial for NSW Home Buyers

The state government has revealed plans to trial a shared-equity scheme for prospective home owners in NSW as part of the housing initiatives tied to the latest state budget.

The NSW Premier said that during the next 2 years, 6,000 places would be available in the trial which will see the state government contribute an equity share of up to 40%  for a new property or up to 30% for an existing property purchased by eligible buyers.

Nurses, teachers and police – as well as older singles over 50 and single parents with a child or children under the age of 18, who are first home buyers, have a maximum gross income of $90,000 for singles and $120,000 for couples and have saved a minimum deposit of 2 per cent of the purchase price, will qualify for the NSW’s trail.

The maximum value of the property they can seek to buy is $950,000 in Sydney and regional centres, including Lake Macquarie, Newcastle, the Central Coast, Illawarra, and the North Coast of NSW, and $600,000 in other parts of NSW.

The total estimated cost of the trial is $780.4 million.

The Premier, Mr Perrottet, has conveyed that housing affordability will be one of his government’s key areas of focus. Mr Perrottet also intends on pushing ahead with the stamp duty reform in this financial cycle.

The NSW governments priorities are to make home ownership a reality for more people throughout NSW and allow people to live closer to where they want to work.

The NSW government has also committed to unlocking land and accelerating housing infrastructure to accelerate new housing projects.




RBA Predicts Inflation to hit 7% by end of year


The RBA governor, Philip Lowe, is warning Australians to be prepared for higher interest rates, saying inflation will likely reach 7% by the end of the year.  That compares with current inflation of 5.1%.

“That’s a very high number and we need to be able to chart a course back to 2-3%.”

It was only last year the RBA had been expecting to keep the cash rate low until 2024, but Lowe said that was never a promise.

Lowe said the economy didn’t evolve as expected. It’s been much more resilient and inflation has been higher. Adding further, the economy was in remarkable shape with the unemployment rate at a 50-year low, households having built up financial buffers of around $250bn and the number of people falling behind on their mortgage repayments actually declining.

These comments came as global share markets are in turmoil fearing the US economy could fall into recession if the Federal Reserve raises interest rates aggressively to combat its own inflation problem. US inflation is at 8.6%, its highest level in 40 years.

But the governor is confident the Australian economy will continue to grow strongly over the next 6 to 12 months believing people will continue to spend the money they saved during the Covid-19 restrictions.

He also said there was a big backlog of construction work to be undertaken and the number of job vacancies was extraordinarily high.  So with jobs being available, people will be employed and will keep spending!

Let’s see if his predictions come to fruition.  That inflation rates increasing to 7% by the end of the year, the Australian economy continue to grow strongly over the next 6 to 12 months and then the inflation rate returning to 2-3% next year.



10 Things a Good Handyman Can Do For You When Renovating

When renovating a good handyman is paramount. When you find a good handyman they will be reliable, use their time efficiently, have a great attitude and be cost-effective.  They can also help to provide solutions you may not have thought about too!

Over the years I’ve learnt a lot from doing my own renovations, from my uncle who was a builder and I’m still learning from my positions as a sales agent and property manager too!

Here are 10 things that a good handyman will be able to do for you when renovating your investment project or home.

Tasks For Your Handyman When Renovating

  1. Carpentry
  2. Patching & painting
  3. Finishing touches both inside & out eg. rehanging curtains at the right height
  4. Installing off-the-shelf products eg. weather strips
  5. Storage renovations eg. wardrobes
  6. Implementing design ideas
  7. Replace or rehang doors including hardware
  8. Floating floors
  9. Installing technology
  10. Landscaping & fencing

These are all tasks that your handyman will be able to do that will add value to your investment or home and will increase the potential for a faster sale and at a higher sale price.

There are many more jobs a good handyman could help you with.  Do you have a trusty handyman?  What have they done for you?

How to Get the Best Price When Selling Your Home in a Buyer’s Market


When home sale prices are on a downward slide, it’s generally a buyer’s market. But for those who are buying a more expensive home at this time, they will find that the price difference between their current and their next home has likely gotten smaller.

While homeowners are likely to save thousands of dollars by upgrading in a slump, sellers can also gain an upper hand by using easy techniques to maximise their sale price.

  1. Create a good presentation

Because buyers tend to go for safe investments when home prices begin to retract, well-presented properties are protected from price slumps. With tightened lending conditions, buyers are rejecting renovation projects and bargaining hard on homes that need even the simplest repairs.

When a property is not well-presented, buyers will chip away at it until the sale price is down to almost a bargain. In a seller’s market, buyers will ignore simple flaws because they just want to get into the market.

Sellers who want to attract the best buyers should invest in their property if it is not up to standard. Even the most minor improvements can result in a stronger sale price.

  1. Private sale, or auction?

Though auction clearance rates are currently just less than 50% now, sellers in traditional auction markets will still realise the highest possible price through auctions. Auction cuts the days on the market, which produces better results for owners. 

A home doesn’t need to undergo an actual auction to reap success. Buyers can make an offer anytime throughout the process and buy the property prior to auction.

In a lower clearance rate environment, an agent’s negotiating skill is important. So, choose an agent with the skill to seal the deal quickly.

Aside from public auction, private sale by deadline date is another way to create urgency among buyers.  This is often known as a Tender.

In a deadline sale, buyers have a date to focus on without disclosing how strong or weak the demand is from other buyers, which is different in auctions. It offers a lot of the benefits from an auction without the risk.

  1. Reduce pressure

It was once possible for sellers to buy before selling, but that is now loaded with risks. In the present market conditions, selling is not as easy as it was 12 months ago, thus most buyers are easing their worry by selling before buying.

By selling first, sellers get an idea of their budget. Your property’s value is unclear, so it is important to have financing prior to buying.

Buying first puts you in a much tougher negotiating position because time is not on your side. If you are a seller, don’t put yourself under this pressure. The best strategy is to sell your house first, even if you have to rent in the meantime.

Both buyer and seller can also benefit from longer settlement periods. If buyers want it, it could be beneficial for the seller as it allows them more time to find the right home. 



An Economist’s View of the Labor Party’s Housing Plans

The Labor Party, which won over the Coalition Party in the recent federal elections, is set to launch a raft of policy changes to address the various concerns facing Australia’s property market, including housing affordability and availability.

CoreLogic research director Tim Lawless expects the government’s primary initiative, the Help to Buy scheme, to be popular for prospective home buyers. This is because the scheme provides low-to-middle-income-earners a more affordable access to the real estate market, creating more equality in home ownership while also opening more opportunities for employees to reside in more central suburbs.

With the government providing up to 40% of the purchase price, plus only a small deposit and potential savings on lenders mortgage insurance, helps people through the obstacles of home ownership.

However, home buyers still have to shoulder the cost of transactional fees, including stamp duties, legal fees and bank fees.

Help to Buy Scheme

Under the Help to Buy Scheme, 10,000 slots will open for owner-occupier buyers from 1 July 2022 with income restricted at $90,000 for singles and $120,000 for couples. The purchase region will determine the eligible home price caps, which is set from $400,000 to $950,000.

According to Mr Lawless, increasing building costs, the ensuing building constraints and the vagueness surrounding interest rate increases could block the interest for new homes under the new scheme.

But on the other hand, a higher interest rate, which may lead to lower prices, could make home buyers more careful of purchasing, weakening demand for the scheme in the short term.

Mr. Lawless cautions buyers who may be considering availing of the scheme to weigh the risks related to buying a property with a small deposit. he says, the housing market is expected to weaken in the coming years, so some buyers may end up with a home that is worth less than the mortgage they’re holding.

Buyers should determine if the government will shoulder its share of the downside risk if the home is sold in a negative equity environment.

While commending the benefits of the Help to Buy scheme, Mr Lawless is reminding Australians that the scheme does not address the underlying problems of home ownership, admitting that its aim is promoting home ownership rather than helping in lowering house prices.

Schemes that trigger demand can add upward pressure to home prices. With Help to Buy, the limited number of slots, together with price caps and income caps, should help curb the surplus demand that could be caused by upward pressure on home prices.

Other Housing Schemes

The new Labor government also pledged more schemes to support Australia’s housing market. This includes the Regional First Home Buyer Support Scheme, which will offer a deposit guarantee for regional home buyers with a minimum deposit of 5%, beginning January 2023.

Similar to the Help to Buy Scheme, it will be open to only 10,000 first-time owner-occupier buyers who have lived within their chosen region for a minimum of one year, with income capped at $125,000 for singles and $200,000 for couples. Caps on home prices, which will be reviewed every six months, range from $350,000 up to $800,000, depending on region.

The Labor Party also promised to set up a national Housing Supply and Affordability Council, which will:

  • Lead in identifying land supply targets in collaboration with state and territory governments
  • Build a housing data warehouse for housing supply, demand and affordability
  • Participate in drafting town planning policies and land supply
  • Present reports on government-owned land releases, rental affordability, homelessness, and the number of social and affordable homes constructed yearly
  • Provide guidance on the right housing policies within all present and future city and regional deals.




How to find the best real estate agent to manage your property

Whether you’re a seasoned investor or a brand ‘newy’ to owning a rental property, it can be difficult to know and find the best real estate agent to manage your property.

It seems like everyone in the property management business in Newcastle is offering pretty much the same thing, so how do you know which agent is the best?

Sadly, and all too often, an investor ends up choosing a real estate agent purely based on a financial reason going for the lowest management fees.  Sometimes the investor makes their choice based on a high rental appraisal price.  Unfortunately, both of these decisions are flawed if made in isolation and not considering any other factors. ​

Beware of Choosing an Agent based on the Lowest Fees or the Highest Rent Appraisal

Are you aware that based on a rental return of just $500 per week, the annual difference between a 6.6% and 7.7% management fee is $286pa and is equivalent of having your property vacant for just 4 days?

Consider this….  Why is the agent charging you less?  Is it because it’s the only way they can get new business?  Perhaps they are inexperienced or simply trying to win your business because they have a quota to reach for the month.

Imagine for a moment that your agent has not managed to notice that the flexi hoses under the bathroom vanity have begun to rust.  Then the hose bursts while the tenants are out and the bathroom, hall and all other nearby rooms are also now flooded. That $286 pa and the cost of a replacement early in time is now beginning to look much cheaper than the excess you now have to pay on your insurance claim!
This is just one example of why you’ll be making the right choice with Annette Pinkerton at One Agency Pinkerton Properties in Newcastle.   Minimising vacancy is also another reason. Annette works closely with your vacating tenants to ensure she has enough time to find the new successful tenants helping with a smooth transition between tenants where the new tenants usually move in on the first available day.  She is the owner of the business, so the buck stops with her and she has a vested interest in making sure she’s getting great results fast without cutting corners.  Annette has been running her mobile business for 9 years and has always offered a lot of flexibility to clients and potential tenants.  You’ll be able to contact her directly on her mobile rather than leaving a message with a receptionist.

When you feel you aren’t getting the service you require from your property manager, switching to a new team is your best option. Many agencies, us included, can take care of this with as little as a phone call.

If you’re thinking about switching property managers, Annette Pinkerton at One Agency Pinkerton Properties will handle the entire process and it won’t cost you a cent. Whenever an investor wishes to transfer their portfolio to our care, we handle the changeover from start to finish – all you need to do is sign some paperwork. We can do everything from contacting your old property management company to give notice, arrange paperwork, pick up keys, notify your tenants and arrange an inspection to view the property  – you just need to give me a call.

You don’t have to worry about feeling uncomfortable about approaching your property manager to let them go.  The whole process really is easy and stress-free for you as the landlord.  All you need to do is make the decision and notify us.

Be Vigilant – Mould is Moving Into Our Homes this Winter! 

La Niña has brought torrential rain and high humidity creating the perfect breeding ground for toxic mould. So what do you need to know and how can you get rid of it?

As the east coast of Australia experiences a lashing of wet weather combined with high humidity and a lack of airflow, we now have the perfect breeding ground for mould.

The recent wild weather has encouraged an epidemic of mould breaking out in homes.  If you haven’t already noticed it, start looking.

Places to look include anything made from fabric like carpets, curtains, cushions, blinds, clothing, shoes, fake flower arrangements and mattresses, like under a baby’s cot.  Wooden floors, untreated wood, wooden furniture, plaster ceilings are also places to look.  There’s so many places mould can lodge and grow if there is moisture, particularly the ‘wet’ areas of your home like bathrooms, kitchens and laundries which all require ventilation even when the weather is perfect.

What is mould?
Mould is a type of fungi that is present virtually everywhere, both indoors and outdoors.  But it can become a big problem once it finds places to grow inside your home and the recent warm humid weather is the perfect environment for mould to spread.

Any damp ares in your home will be susceptible to mould growth and is mainly due to lack of ventilation.

How do you stop the spread of mould in your home?
There are 3 main steps in controlling mould;
1. Keep your home dry and aired
2. Keep the home clean and free from dust
3. Eliminate dampness 

• Use exhaust fans and range hoods to extract moisture from all ‘wet areas’ such as bathrooms, kitchens  and laundries.
• Cleaning, vacuuming and dusting regularly helps to keep bacteria (food for mould) to a minimum.
• Clothes dryers create condensation in the air and will increase mould growth throughout the home unless ventilated.
• Drying washing inside on clothes racks allows moisture to evaporate into the air increasing humidity which leads to mould growth.
• In winter it’s important to open windows and cross ventilate any property regularly on DRY days, between 10 am and 2 pm, for at least an hour.
• Ceiling fans also help to dry out condensation.
• Gas heating/cooking (Unflued) is considered to be a ‘wet’ heat therefore  increases condensation.  This is evident on windows.
• Electric heating is considered a dry heat and helps keep condensation and humidity levels low. Use the appliance for a short period in damp rooms, usually the rooms on the southern side.
• The use of an air conditioner, when used correctly, reduces condensation.
• A dehumidifier (portable) may help to reduce condensation. 

Whenever condensation forms on the inside of glass windows and remains there after mid-day this is a sure sign that inside your home is just way too wet.

Specialists warn that using bleach on mould can help the mould to grow as it uses bleach as a food source. Using a dilute solution of vinegar to kill the mould is more effective. Borax and baking soda can also be used effectively.

There are lots of simple ways to control moisture and therefore mould and the secret is living a little drier!

Prevention is more efficient than removal so keep your home dry and free of dust.




Paint Colour Trends for Living Rooms in 2022

For 2022, there is not one colour or shade that’s currently popular. The trend is simply towards colour in general, or just not white!

The trends in home colours change in decades, not years, so it’s too soon for plain white to make a comeback.  With that said, some of the most popular colour trends for living areas for 2022 are:

After a decade of “being beige”, up next is a decade of different shades of green, from the cheerful, stronger greens, to the softer colours, like eucalyptus.  One of the shades that has gained broad appeal is sage green, a light, dusty shade of green. It is the most innocuous pick for people who like colour, but is hesitant to go bold.

Gelato colours
Another trend is more pastel colours, ranging from soft to intense to more low-key. These are the colours you would usually see in Italian gelato shops. There are columns of pure, pastel colours and those faintly dustier tones. Both of these colour ranges have equal space in the market.  You can also consider a bright mango or deep coffee, then you have more subdued pistachio, banana, peach or macadamia.

Subdued Memphis Milano
Memphis Milano is a trend in the 80s, consisting of contrasting block colours in primarily geometric patterns. This style is making a comeback, but with dusty or subdued tones.  This style has many colours together that are contradictory on the colour wheel. For example, it would be common to see a lilac beside a yellow.

Here are more examples of colour wheel opposites:
Red and green
Pink and green
Blue and yellow
Blue and orange

This can be considered wild for people who are just beginning to explore colours and can be quite blunt. However, it becomes quite the opposite when combined with the trend of subdued dusty or pastel colours.

On the other hand, there is also a trend towards pairing colours that are located right next to each other in the colour wheel. For example, a lilac next to a pink.

The colours right next to each other include:
Blue and green
Pink and red
Pink and purple
Yellow and orange
Yellow and green

Again, this can be described as more light and subdued rather than bright and bold.

Cool colours
It is alright for the living area to be a little cooler in relation to colour shades. Your whole house need not be done in warm colours, or it becomes too sweet.
The disparity between faintly warmer tones in the bedroom and colour tones such as greens and blues in the living areas complements each other.

How to choose colours:
If you’re unsure which colour to pick for your home, here are tips to guide you:
1. Ask the professionals. You don’t need to pay for one because there are apps that can help you with colour selection and creation.
2. Be confident. It’s actually rare for people to paint a room and regret it after, especially if they choose soft colours and gentle tones. There is a big gap between people’s fear of colour and then how satisfied they are with the results.
3. Use samples. They are a lifesaver. Paint large squares on your wall, leave it for a few days and then make a decision.

Check out more colour combinations at my Pinterest Board.