Are You On A Tight Budget But Wanting To Get Into Your First Investment
Are Renovations Really Worth It?
Host: Is it maybe a good idea to do some small modifications to the property in agreement with the tenancy and see what they would want to change about the property and whether they want to renegotiate the rent for a few improvements.
Paul Glossop: I think if I personally and I having to gone through this. I can’t count how many times I have gone through a similar scenario, where I have had a property of mine or even of a clients that comes up with an opportunity to say “Look we can either lock them into a long term lease” or we might say “Look it’s time to maybe give the place a polish and shine”. Whether that be a floor board paint or something that’s more major. Ultimately for me the bird in the hand is always better than two in the bush. If you got a tenant in play and if they are covering the rent, and they are good tenants, and they are giving your rent on a weekly basis. Paid consistency and they check out with regards to the monthly inspection then to Michaels point again, I think if you are going to have consistent tenants in there, to get them out just to do a small or even a major overhaul unless really that capital works is going to give you a two-fold return on your money. I would never see the value in it. So for me that opportunity to renovate will always be there but ultimately the tenants are there right now, they are giving you rent from day one, keep them in there, keep them happy and if you do have to do a couple of small things, whether it be fly screens, air conditioning anything that might make it a bit more probably potentially owner occupy style for them, which might give you a chance to up rent next time over. That would be the small things you could do whilst they are still living there, that you don’t have to evict them to do so.
Is A Property Manager Worth The Cost?
Host: False economy to do away with the property manager Paul?
Paul Glossop: Very much so. DIY property management, couldn’t think of a worse way to spend my time than have to deal with property management personally. Especially not being qualified, it is the best money you could ever spend as a property investor.
Host: Right, well there you go. That’s an unequivocal answer there. That’s all we have time for tonight but make sure you send through your property questions.
To Buy Your Home Or Buy An Investment Property?
Host: Make sense of that one for us.
Paul Glossop: Bit of a real one in itself. Look, I think first home owners grants across this country vary from states. So depending which, where, what and why. This probably comes into grants and stamp duty exemptions, depending on which state and where the incentive lies, depending on whether it’s established, or existing owner occupied for new and off the plan changes as well. Ultimately for me, does the question come into play that if you are looking to buy your home. If that home is going to be, personally then the biggest question I’ll ask is if it’s going to be your first property. If this isn’t going to be your forever home, treat it as investment. So if you are going to buy a home, that you intend on turning into a potential investment down the track or leapfrogging the property market at some way shape or form, that property needs to perform. So just because you got a grant that’s got to allow you to get into the market, does that mean it’s the right time to get into that market? Well that depends on what asset you’re buying. Just because you can get in, doesn’t mean it’s the right property type to get into. I would really want to see the same level of due diligence irrespective to the home or it’s going to be an investment and depending on what market. I think we have already talked about some of the fundamentals that you really need to look for irrespective. But for me, we are always very staunchy when buying a home. Ultimately, unless you’re absolutely 100% sure that that is your forever home or at least somewhat sure that’s your 10 to 15-year home. Please treat it as an investment because otherwise numbers will always stack up. That renting in that same market will no doubt out form you buying a dud owner occupier.