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Does Age Affect Price?
By Vish Uttam - January 7, 2020
We’ve made it our missions to ensure each clients feels the love (only if you wants the love of course. Let's not make it weird...) and we do things by our simple, yet effective, motto.

“Genuinely connecting and providing a personalised Xperience to our extended family”.
A past client gave me a call today. As they always do. Must be my suave charm!He’s a great guy whose bought two properties from me before. Actually, he’s a chairman for the body corporate of one of those buildings.

‘Vish,’ he said. ‘How’s it going? How’s the market? You look dapper today!’ We had a great chat. Then he asked an interesting question that not many people do. ‘The building I’m in is almost 15-years-old. Is there a good age to sell it?’

I, myself, have investment apartment, so this is somethingI’ve pondered over the years. Like with anything, I do believe there’s a lifecycle in the selling process of buildings. There’s an entry and an exit point. Unfortunately, I’m not as all-seeing as I’d like to believe I am. TheBrisbane apartment market is too young to have enough data that backs up my belief. But I’m on to something! I can feel it in my bones!

Usually developers sell the building at top dollar. Depending on the overall market, that can drop off or skyrocket. Over the last ten years it’s slowly declined from a high price. However, I think the best time to buy into a building is when it’s 3 or 4-years old. Why? Thanks for asking faceless audience on the other side of my screen! Well, I’ve noticed when Brisbane buildings hit a certain age, maybe around the 20-year mark, the body corporate rates shoot up.

When you look at the value of a building across a period of years, you can see a bell curve. It climbs up and up, then it reaches a crest and begins to fall. That’s because the body corporate goes up during that peak.Investors, and even owner occupiers, get cold feet and think, ‘why pay double the body corporate for an older building when I can buy into a newer building for cheaper rates?’ They back off, demand falls, and the value drops.

I’ve seen this happen with a few buildings in Brisbane. The problem is, there just isn’t enough data to reveal the pattern. But I’m a staunch believer there’s an entry point. I’ll stand out the front with my picket sign and howl that at any passers-by until the day I die. Well … maybe I won’t howl, I’ve still got a reputation to maintain.

I do believe there’s an exit point as well. I just can’t make a picket sign for it yet because I don’t have the data to back myself. Especially since there are plenty of Sydney and Melbourne buildings that just keep increasing in value with no crest in sight.

Land and houses are easy. They always go up in value or remain steady. But apartment buildings are moody. Some buildings start off at a 1-bedroom for $200K, then go up to $300K, and suddenly, 10 years later, it’s dropped back down to$200K. There’s this bell curve that’s happening, and I’m telling you, it haunts my dreams.

The only link I can see is to body corporate. The average is about $7.5K. As it goes up to $8.5K - $9.5K, that’s when I think people question whether they should buy into a building or not. And that’s when I think the value starts falling. Of course, all this is in a stable market. Don’t even get me started on if the market is booming. I don’t think my heart can take it.

This is certainly a question that’s been buzzing about my brain. All I know for sure is there’s a point you should liquidate and invest somewhere else. If you want to chat more about it or, if by some grace, you have the magical data I’m searching for, contact me atvish@xperiencerealty.com.au or 0409 891 339. Talk soon! Cheers!
How Much Money Can I Borrow From The Bank?
By Vish Uttam - July 9, 2019
We’ve made it our missions to ensure each clients feels the love (only if you wants the love of course. Let's not make it weird...) and we do things by our simple, yet effective, motto.

“Genuinely connecting and providing a personalised Xperience to our extended family”.
The moment I expanded into mortgage broking, the flood gates opened and this question poured in from all sides. Well, I’m finally here to give you all an answer. Borrowing money comes down to two things – your funding position and your serviceability.

Funding position is the limit on your maximum borrowing capacity based on how much deposit you have compared to how much you want to borrow from the bank (i.e 80% or 90% loans). Too complicated?

Let’s say you make a killing selling crochet on eBay and you slap down an $80K deposit. In theory, you can borrow $400K if you want an 80%LVR (loan-to-value ratio). So, an 80% loan from the bank. Probably another $10K- $15k for stamp if you’re not a first-home buyer, depending on if it’s investment or owner occupier. About $1.5K for legal fees, another couple grand for miscellaneous purposes (registration etc.). In the end, with $95K you can borrow $400K based on your funding position. That’s a lot of stacks to throw around.

Now, let’s look at serviceability. Serviceability is your steady income, and banks look at it in tandem with your funding position. They don’t want to give a loan to someone who’s making it rain one month, and dumpster diving the next. But if someone walks in earning a steady $60K - $70K a year, they’ll roll out a welcome mat lined with a $300K - $400K loan. It’s truly a sight to behold. You should see the $500K - $600K loan mats they roll out for $80K - $90K earners!

Of course, every bank has their own risk metrics, so there’s about a $100K variance from banks A to Z. Where it gets interesting is how funding position and serviceability affect one another. Say you’ve really been making bank with that crochet business of yours. Now you’ve got a $100K deposit and can borrow $500K, but your regular income is only $50K a year for whatever reason. Maybe crochet comes in and out of style. Maybe you’re only selling it for a few bucks a pop. Either way, the bank is going to slam on the brakes and say, ‘hang on, your cash flow isn’t as good as your deposit.’ Then they’ll cap you at a $300K loan, and you’re left resenting your crochet business. Maybe. Do people even crochet anymore?

The opposite can apply as well! You could be earning well over $100K a year (you changed business), but only have a $40K deposit. The bank will still cap you at$300K and you’ll wish you just stuck with crochet. I’m really stuck on the crochet example myself. At this point, I’m just holding on for the ride.

So, as you can see from all this talk of crochet, banks judge how much you can borrow on a combination of your funding position and your serviceability.
How To Buy A Property With No Deposit
By Vish Uttam - January 15, 2020
We’ve made it our missions to ensure each clients feels the love (only if you wants the love of course. Let's not make it weird...) and we do things by our simple, yet effective, motto.

“Genuinely connecting and providing a personalised Xperience to our extended family”.
This blew my mind when I found out! To be honest, I’m still shook, but I just had to share it with you all because I know not many people know about it.

‘Well, what on earth are you talking about, Vish?’ you might ask.

Let me set the scene. This young couple came to me for some mortgage broking services while buying a property. They had enough money saved up for a deposit, but their sights were set on renovations to raise the value. Their parents, being homeowners themselves, offered their support. This is where it gets really juicy.

Now, you’d be hard pressed to find a banking system anywhere else in the world that allows this, but most banks in Australia do, which isjust incredible. This isn’t a paid promotion (we wish!) so we’re not namingnames, but this particular bank we went to allowed the parents to act as guarantors so the couple could buy the house without putting down a deposit. Nota single cent. I know! I’m still trying to pick my jaw up off the ground!

Basically, it works as a family pledge scenario. The parents had a little bit of mortgage on their house, and this bank was willing to do a second mortgage as security. The couple borrowed 100% of the property cost, plus the closing costs – so about 105% in the end. This bank says, “sure thing!” and loans the couple the money. In return, they use the parents’ property as security without even looking at their income. They just take the property as a guarantee for 20% of the loan, the couple has everything in their names, and they don’t have to put down a single cent! How mind blowing is that?!

I will say that whether this works is a case-by-case situation. If you don’t have enough for a deposit, then there’s a chance the property is outside your budget. And with the way interest rates change faster than Queensland weather, you could be left in a tight spot. In this case, however, the couple knew what they were doing. They had enough for the deposit but wanted to put it towards renovations so they can turn a profit when they sell later. We love a good investment strategy!

So, if you’ve got parents in Australia who are willing to act as guarantors, and you’ve got all your ducks in a row, this is an easy way to jump into the market. Buying a property with 0% down is a brilliant strategy I think smart investors and smart purchasers can take advantage of!
To sell, or not to sell?
By Vish Uttam - June 18 2019
We’ve made it our missions to ensure each clients feels the love (only if you wants the love of course. Let's not make it weird...) and we do things by our simple, yet effective, motto.

“Genuinely connecting and providing a personalised Xperience to our extended family”.
So, there’s three main factors when it comes to determining the price of a property. Numero uno – what’s currently on the market? If you’re looking to make a million bucks but some other similar property is only being sold for seven-hundred thousand, sorry to break it to ya, you’re not getting that million. I know, it’s heartbreaking, I go to sleep every night wishing I could make a million bucks selling my property too. The second factor, what has previously been sold, follows the same logic.

The last factor, which I think is just as important, is the condition of the property – the presentation and the internal/external structure. Again, you want that million bucks, no one will pay it if the front door of the property is falling off and you have a colony of rats going to war with you for space in the roof.  So, that’s basically the foundation I use to assess property value.I say it like it is. There’s no point in saying we could sell it now or tomorrow if the market isn’t that great, and it’s not right now. It’s taken a big hit. Fantastic time to buy, just not so great for sales.

I will always tell clients, ‘Look, other agents might spin you nice fairy-tale about how great the market is, and that they can sell your property in ten minutes and make you a fifty or one-hundred grand profit. But this is where the market really is. It will be tough, but if we get creative with our marketing approach, we could still make a good sale.’

Being blunt is important in this industry. You need to manage expectations and make sure clients get the best value they can, otherwise you won’t have clients anymore. That’s the approach I live by.
The appraisal process
By Vish Uttam - April 11 2019
We’ve made it our missions to ensure each clients feels the love (only if you wants the love of course. Let's not make it weird...) and we do things by our simple, yet effective, motto.

“Genuinely connecting and providing a personalised Xperience to our extended family”.
So, there’s three main factors when it comes to determining the price of a property. Numero uno – what’s currently on the market? If you’re looking to make a million bucks but some other similar property is only being sold for seven-hundred thousand, sorry to break it to ya, you’re not getting that million. I know, it’s heartbreaking, I go to sleep every night wishing I could make a million bucks selling my property too. The second factor, what has previously been sold, follows the same logic.

The last factor, which I think is just as important, is the condition of the property – the presentation and the internal/external structure. Again, you want that million bucks, no one will pay it if the front door of the property is falling off and you have a colony of rats going to war with you for space in the roof.  So, that’s basically the foundation I use to assess property value.I say it like it is. There’s no point in saying we could sell it now or tomorrow if the market isn’t that great, and it’s not right now. It’s taken a big hit. Fantastic time to buy, just not so great for sales.

I will always tell clients, ‘Look, other agents might spin you nice fairy-tale about how great the market is, and that they can sell your property in ten minutes and make you a fifty or one-hundred grand profit. But this is where the market really is. It will be tough, but if we get creative with our marketing approach, we could still make a good sale.’

Being blunt is important in this industry. You need to manage expectations and make sure clients get the best value they can, otherwise you won’t have clients anymore. That’s the approach I live by.