Monday, July 30, 2012

Stop sending real estate spam please!

Stop sending marketing 'spam', agents told

487 people have read this article

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Tuesday, 31 July 2012

Steven Cross

Agents must stop bombarding prospects and clients with marketing material and should instead look to build relationships that position them as the area specialist, a real estate trainer and author of a new book has said.

“People are getting sick and tired of spam in this day and age," said Peter Hutton, author of Prospecting Breakthrough for Real Estate: The 3 Reasons Why Your Prospecting Isn't Working & 7 Hot Tips To Fix It.

"Being constantly phoned by a stranger is considered spam, as is constant unsolicited email or letters."

“The secret is actually about quality not quantity. Develop a deep empathy for your prospects, discover what they really want and receive permission first before trying to sell them something.”

Principal at Elders Real Estate Darwin, Chris Deutrom, agreed that 'spam' flyers don’t work.

“Instead of sending out 'just listed' or 'just sold' flyers, we like to offer our clients a free full suburb report," he told Real Estate Business.

“It gives us a degree of separation from our competition and allows us to both inform and create awareness in the community.

“Nearly 90 per cent of people who request a suburb report are either on the market or about to sell.”

Mr Hutton said successful real estate agents build relationships, and ultimately a tribe of loyal followers, giving them the confidence that will build trust.

“Stop trying to be all things to all people – that never works," he continued.

"A specialist will always be regarded as the higher authority in their field of expertise when compared to a general practitioner… By becoming the specialist within your target market, you will become more in demand than your competition.”

 

Best regards,

Linda and Carlos Debello

http://www.ljgrealestate.com.au

http://twitter.com/GillandDebello

http://au.linkedin.com/in/lindajanedebello

http://gillandrealestate.wordpress.com/

http://www.facebook.com/pages/LJ-Gilland-Real-Estate-Pty-Ltd/169194919788253

Confidential email:- The information in this message is intended for the recipient name on this email.  If you are not the recipient please do not read, copy distribute or act upon the message as the information it contains may be privileged.  If you have received this message in error, please notify the writer by return email.  Thank you very much for your assistance in this matter and your co-operation.

House prices article of research as at Monday 30th July 2012

Hello Clients, friends and associates of LJ Gilland Real Estate,

The following is for your perusal and information only with kind regards:-

House prices: The latest June quarter data may not lie, but it’s rarely in agreement

By Larry Schlesinger
Monday, 30 July 2012

Trying to work out whether the Sydney, Melbourne or Brisbane housing market is going up or down?

Or just trying to work out whether you’re buying something at or below the median price?

It all depends on which housing data provider you choose to reference  - they all use different methodologies to calculate their indexes and hence will never be in agreement.

RP Data-Rismark, Residex and Australian Property Monitors (APM) have all released their June quarter data, so direct comparisons can now be made.

(The ABS will put out its June eight capital city indexes on August 1.)

In just two markets – Brisbane houses and Melbourne units – do all three providers agree on the direction they are heading…in both cases down.

The REIV released June quarter  data for Melbourne showing house prices up 2.9% to a median of $535,000 - the strongest quarterly gain recorded by all data providers.

Rarely are the national data providers within $10,000 of each other on the median house or unit price.

For example, RP Data-Rismark has the Sydney house price at a median of $616,000.

Residex says the median is $50,000 higher at $666,500, while APM’s Sydney median house price is in between the two at $642,425.

Some of the differences are startling.

  • Residex says Darwin house prices rose over 7% over the June quarter to a median of $511,500, while APM and RP Data both have Darwin house prices falling.

  • Residex says Perth house prices fell by more than 4% of the June quarter, while APM and RP Data have the market treading water. 
  • RP Data says Hobart unit prices fell almost 10% over the June quarter, while Residex has them as unchanged, and APM records a smaller 3.9% decline.

Here’s a breakdown of how the three commercial data providers have assessed the June quarter performance of the main capital city markets:

For markets where the price has moved by less than 0.2% either way, they have been judged for the purposes of comparison as "unchanged”:

Sydney houses

RP Data

Residex

APM

Median price: $616,000

Median price: $666,500

Median price: $642,425

DOWN over quarter: -1.4%

UNCHANGED

UNCHANGED

Melbourne houses

RP Data

Residex

APM

Median price: $517,500

Median price: $555,500

Median price: $531,167

DOWN over quarter: -3.1%

DOWN over quarter: -1.31%

UP over quarter: +1.6%

Brisbane houses

RP Data

Residex

APM

Median price: $415,000

Median price: $412,500

Median price: $427,963

DOWN over quarter: -0.6%

DOWN over quarter: -3.75%

DOWN over quarter: -1.3%

Perth houses

RP Data

Residex

APM

Median price: $475,000

Median price: $467,000

Median price: $536,151

UNCHANGED

DOWN over quarter: -4.26%

UNCHANGED

Adelaide houses

RP Data

Residex

APM

Median price: $383,250

Median price: $385,500

Median price: $436,285

UP over quarter: +1.7%

DOWN over quarter :-0.34%

UNCHANGED

Canberra houses

RP Data

Residex*

APM

Median price: $520,000

Median price: $529,000

Median price: $575,825

UP over quarter: +0.8%

DOWN over quarter: -1.41%

UP over quarter: +1.1%

Darwin houses

RP Data

Residex

APM

Median price: $510,000

Median price: $511,500

Median price: $608,843

DOWN over quarter: - 1.9%

UP over quarter: +7.13%

DOWN over quarter: -1.2%

Hobart houses

RP Data

Residex

APM

Median price: $356,500

Median price: $357,000

Median price: $322,584

DOWN over quarter: -0.6%

DOWN over quarter: -4.15%

UP over quarter: +0.5%

 

Sydney units

RP Data

Residex

APM

Median price: $477,000

Median price: $490,500

Median price: $464,124

UP over quarter: +3.3%

UNCHANGED

UNCHANGED

Melbourne units

RP Data

Residex

APM

Median price: $430,000

Median price: $428,000

Median price: $392,862

DOWN over quarter: -5%

DOWN over quarter: -0.91%

DOWN over quarter: -1.2%

Brisbane units

RP Data

Residex

APM

Median price: $365,000

Median price: $349,500

Median price: $356,744

DOWN over quarter: -0.7%

UNCHANGED

DOWN over quarter: -1.7%

Perth units

Sunday, July 29, 2012

Benjamin yesterday

Img_7312

Hi Robert and Karen
Please find attached for you. Thank you for supporting the 6th birthday
event for Alexander. It was an emotional time. Hope Benjamin had a lovely
time.

Best regards,
Linda and Carlos Debello
http://www.ljgrealestate.com.au
http://twitter.com/GillandDebello
http://au.linkedin.com/in/lindajanedebello
http://gillandrealestate.wordpress.com/
http://www.facebook.com/pages/LJ-Gilland-Real-Estate-Pty-Ltd/169194919788253

Confidential email:- The information in this message is intended for the
recipient name on this email. If you are not the recipient please do not
read, copy distribute or act upon the message as the information it contains
may be privileged. If you have received this message in error, please
notify the writer by return email. Thank you very much for your assistance
in this matter and your co-operation.

Thursday, July 26, 2012

Untitled

RP Data Research Blog - What makes for the more popular investment: units or houses?


What makes for the more popular investment: units or houses?

Posted: 26 Jul 2012 04:50 PM PDT

Nationally, 58% of flats, units and apartments are owned by investors. That is quite an amazing statistic, especially when you compare that with detached houses where only 21% are investor owned.

Across the capital cities the proportions are even higher. Darwin tops the list with 70.6% of all units being rented followed by Brisbane where 70.2% of all units are rented.

The lowest proportion, 60.3% in Sydney, is still significant. I would presume Sydney’s proportion is probably lower due to the city having the highest house prices (more owner occupiers choose units over houses thanks to the lower entry price), as well as the fact that Sydney is the most mature unit market in the country.

The high rate of investor ownership of apartments begs the inevitable question… why?

Similar to owner occupiers, it partly comes back to price points. The unit market generally offers a lower buy in price (investors face affordability hurdles too!) than detached or semi-detached homes. Based on median selling prices across the combined capital cities over the June quarter, units are 12% or $59,000 more affordable than houses. The gap is widest in Sydney where unit prices are almost 23% or $139,000 lower than house prices.

Another valid reason is the fact that rental yields have historically been higher for units compared with houses. The latest RP Data-Rismark indices show unit yields across the combined capital cities are currently at 4.9% compared with 4.2% for detached houses. In fact, across every capital city, rental yields on units are higher than yields for houses (except Darwin where both are at 6.1% which are the highest rental yields across the capital cities).

Finally, it is often the case that units are located in more popular locations for both renters and owner occupiers. The majority of unit developments are located close to transport networks, major working nodes and retail amenity.

The high proportion of investors really doesn’t come as a surprise!

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Best regards,

Linda and Carlos Debello

http://www.ljgrealestate.com.au

http://twitter.com/GillandDebello

http://au.linkedin.com/in/lindajanedebello

http://gillandrealestate.wordpress.com/

http://www.facebook.com/pages/LJ-Gilland-Real-Estate-Pty-Ltd/169194919788253

Confidential email:- The information in this message is intended for the recipient name on this email.  If you are not the recipient please do not read, copy distribute or act upon the message as the information it contains may be privileged.  If you have received this message in error, please notify the writer by return email.  Thank you very much for your assistance in this matter and your co-operation.

Wednesday, July 25, 2012

the lord

The Lord reward me for doing right,
Because of the innocence of my hands in his sight.
To the faithful you show yourself faithful ;
To those with integrity you show integrity.
To the pure you show yourself pure, BUT to the wicked you show yourself hostile. Psalm 18:24-26 -

Best regards,
Linda Debello
http://www.ljgrealestate.com.au
http://twitter.com/GillandDebello
http://au.linkedin.com/in/lindajanedebello
http://gillandrealestate.wordpress.com/
http://www.facebook.com/pages/LJ-Gilland-Real-Estate-Pty-Ltd/169194919788253

Confidential email:- The information in this message is intended for the
recipient name on this email. If you are not the recipient please do not
read, copy distribute or act upon the message as the information it contains
may be privileged. If you have received this message in error, please
notify the writer by return email. Thank you very much for your assistance
in this matter and your co-operation.

Tuesday, July 24, 2012

7%

 

SCROLL DOWN

 

 

I love this!!!

            

Image0011

7% Written by a 90 year old

This is something we should all read at least once a week!!!!! Make sure you read to the  end!!!!!! 

Written  by Regina Brett, 90 years old, of the Plain Dealer,  Cleveland , Ohio .

"To celebrate growing older, I  once wrote the 45 lessons life taught me. It is the most  requested column I've ever written.

My odometer rolled over to 90 in August, so here is the column once more:

 

1. Life isn't fair, but it's still good.

2. When in doubt, just take the next small  step.

3. Life is too short - enjoy it..

4.  Your job won't take care of you when you are sick. Your  friends and  family  will.

5. Pay off your credit cards every  month.

6. You don't have to win every argument.  Stay true to yourself.

7. Cry with someone. It's  more healing than crying alone.

8. It's OK to get  angry with God. He can take it.

9. Save for  retirement starting with your first paycheck.

10.  When it comes to chocolate, resistance is  futile.

11. Make peace with your past so it won't  screw up the present.

12. It's OK to let your  children see you cry.

13. Don't compare your life  to others. You have no idea what their journey is all  about.

14. If a relationship has to be a secret,  you shouldn't be in it..

15. Everything can  change in the blink of an eye But don't worry; God never  blinks.

16.  Take  a deep breath. It calms the mind.

17. Get rid of  anything that isn't useful. Clutter weighs you down in  many ways.

18. Whatever doesn't kill you really  does make you stronger.

19. It's never too late  to be happy. But it's all up to you and no one  else.

20. When it comes to going after what you  love in life, don't take no for an answer.

21.  Burn the candles, use the nice sheets, wear the fancy  lingerie. Don't  save  it for a special occasion. Today is special.

22.  Over prepare, then go with the flow.

23. Be  eccentric now. Don't wait for old age to wear  purple.

24. The most important sex organ is the  brain.

25. No one is in charge of your happiness  but you.

26. Frame every so-called disaster with  these words 'In five years, will  this  matter?'

27. Always choose life.

28.  Forgive but don't forget.

29. What other people  think of you is none of your business.

30. Time  heals almost everything. Give time time.

31.  However good or bad a situation is, it will  change.

32. Don't take yourself so seriously. No  one else does..

33. Believe in  miracles.

34. God loves you because of who God  is, not because of anything you did or didn't  do.

35. Don't audit life. Show up and make the  most of it now.

36. Growing old beats the  alternative -- dying young.

37. Your children get  only one childhood.

38. All that truly matters in  the end is that you loved.

39. Get outside every  day. Miracles are waiting everywhere.

40. If we  all threw our problems in a pile and saw everyone  else's, we'd  grab  ours back.

41. Envy is a waste of time. Accept  what you already have not what you need.

42. The  best is yet to come...

43. No matter how you  feel, get up, dress up and show up.

44.  Yield.

45. Life isn't tied with a bow, but it's  still a gift."

Its estimated 93% won't forward  this. If you are one of the 7% who  will,  forward  this with the title '7%'.

I'm in the 7%. Friends  are the family that we  choose.
  

  

 

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Gold Coast Market blog

THE GOLD COAST MARKET AS AT JULY 2012                                                       

All that most people hear and read about the Gold Coast residential market is when something goes cactus or when a bdig sale takes place.

We have seen in recent weeks two high-value sales – most recently Dudley Quinlivan’s former Southport riverfront home, which sold for $9.5 million at auction and a few weeks prior to that, motor vehicle dealer John Zupp paid $12 million for a Sanctuary Cove home.

These two sales – the media are in a rush to tell us – are the highest paid prices for a Gold Coast residence in the last three years.  Well whoopee!

I was contacted in both cases by local media outlets to make comment.  I was happy to do so, but only if we discussed the Gold Coast market in more general terms and especially regarding its fundamentals.  The media’s interest sunk like a stone when I wasn’t prepared to preach doom and gloom or get into “well below replacement cost” chatter or embellish on the rumoured defects regarding the Quinlivan property and the potential repair bills.

So, I will use this space to highlight what I would have touched on.  It is something that very few understand about the Gold Coast, and to be honest, very few in the property industry these days appear to really have an understanding about the markets they are writing about.

…..

The Gold Coast housing cycle is very pronounced and history shows that this cycle, typically, has a six-year frequency.  Also, our analysis, going back to the 1960s, shows that the peaks are usually 250% higher (in sales/construction volumes) than the previous five-year averages, and the downturns are 50% lower.

Since I have been working in the industry, the Gold Coast experienced market peaks in 1988, 1992, 2002 and 2008.  Downturns were experienced in 1982, 1990, 1995, 2000 and 2012.

After close to 30 years in this business, you see certain patterns emerge.  History usually repeats.  The Gold Coast looks set to have a market peak in 2014-2015, followed by peaks in 2020 and 2026.  Downturns will also return and most likely in 2017-2018 and in 2023.  This isn’t gospel but history is on my side.

Just as we wrote about Brisbane turning the corner a month or so back, the Gold Coast seems to be following suite.  It isn’t there yet, but it looks to be heading down the right path.  Some tell-tale signs include:

Well-priced properties starting to sell soon after listing

Multiple offers starting to happen, again on well-priced properties

Some properties are now selling above reserve

Vacancy rates are on the decline and rents are rising

Fewer well-priced properties for sale – there is an actual shortage of saleable stock for sale across many parts of the Gold Coast

Time on the market, as a result, is starting to drop and in some cases dramatically

Intra-state and interstate interest is on the increase

My general reading is that people (me too!) are tired of having their life on hold and they want to get on and do things.  This especially applies on the Gold Coast, which has been in limbo for much longer than the rest of the country.  The recent state and local government changes help make this possible.

For mine, the Gold Coast has just about bottomed.  End values are likely to start growing during 2012/13 and most likely between 5% and 10%.  But here they might sit and for some time, because, as I will explain next week, the Goldie needs to supply more affordable housing stock.

The potential bump in Gold Coast prices over the next 12 to 18 months is re-correcting an overly bearish market.

Share

Best regards,

Linda and Carlos Debello

http://www.ljgrealestate.com.au

http://twitter.com/GillandDebello

http://au.linkedin.com/in/lindajanedebello

http://gillandrealestate.wordpress.com/

http://www.facebook.com/pages/LJ-Gilland-Real-Estate-Pty-Ltd/169194919788253

Confidential email:- The information in this message is intended for the recipient name on this email.  If you are not the recipient please do not read, copy distribute or act upon the message as the information it contains may be privileged.  If you have received this message in error, please notify the writer by return email.  Thank you very much for your assistance in this matter and your co-operation.

Interesting article for Clients, Associates and friends

Interesting Article for Clients and Friends:-

Townsville has best regional Queensland prospects with smaller Gold Coast recovery by 2015: BIS Shrapnel

By Larry Schlesinger
Friday, 20 July 2012

Townsville is forecast to be the strongest-performing regional location in Queensland between now and 2015, according to researchers BIS Shrapnel.

Property values in Townsville are forecast to rise by 6% per year over the next three years, with the regional city benefiting from rising investment in the resources sector over 2012-13, says BIS Shrapnel in its latest Residential Property Prospects, 2012 to 2015 report.

Townsville’s projected growth is just below the cumulative 20% forecast for Brisbane over the three-year period.

Further north, Cairns will also benefit from resources investment, with 5% annual dwelling growth to 2015.

The weakest growth prospects are on the Gold Coast and Sunshine Coast, with BIS Shrapnel forecasting capital growth of 4.2% per annum to 2015 due to a drop in interstate migration.

March quarter sales figures released by the Real Estate Institute of Queensland showed that Townsville has been one the strongest-performing Queensland municipalities, with just a 2% decline in house prices and no change in unit prices over the prior 12 months.

 In comparison Gold Coast house and unit prices are down 5.1% over this period.

Region

Median Sale Mar12

Qtrly change

Median Sale 12mths Mar12

1yr change

SOUTHEAST QUEENSLAND

BRISBANE (SD)

$  425,000

0.0%

$  430,000

-5.5%

BRISBANE CITY (LGA)

$  505,000

1.2%

$  510,000

-4.7%

GOLD COAST CITY (LGA) +

$  454,375

0.7%

$  470,000

-5.1%

SUNSHINE COAST (LGA) +

$  430,000

0.6%

$  437,000

-6.0%

TOWNSVILLE CITY (LGA)

$  360,000

0.0%

$  365,000

-2.0%

CAIRNS (LGA) ~

$  350,000

4.5%

$  350,000

-4.1%

 

“With both Townsville and Cairns offering services to these mining projects, as well as a base for employees in and out of the projects, population growth should benefit with a rising shortage of dwellings emerging until new supply catches up,” says BIS Shrapnel.

“Moreover, the improvement in local economic conditions should also see confidence improve after a period of weakness. Townsville should expect a greater upside to its recovery due to its more diversified economy, although both markets should experience moderate price growth.”

The report notes that house prices on the Gold Coast and Sunshine Coast have generally moved in tandem with Brisbane due primarily to population growth driven by interstate migration.

However, due to interstate migration into Queensland now at long-term lows, BIS Shrapnel says the residential markets on the Gold Coast and Sunshine Coast have weakened considerably.

Image001

Best regards,

Linda and Carlos Debello

http://www.ljgrealestate.com.au

http://twitter.com/GillandDebello

http://au.linkedin.com/in/lindajanedebello

http://gillandrealestate.wordpress.com/

http://www.facebook.com/pages/LJ-Gilland-Real-Estate-Pty-Ltd/169194919788253

Confidential email:- The information in this message is intended for the recipient name on this email.  If you are not the recipient please do not read, copy distribute or act upon the message as the information it contains may be privileged.  If you have received this message in error, please notify the writer by return email.  Thank you very much for your assistance in this matter and your co-operation.

Thursday, July 19, 2012

News Article re Terri Scheer Insurance Brokers for everyone's information

Subject: News Article re Terri Scheer for everyone's information

How to find and hold good tenants
By Carolyn Majda
Wednesday, 18 July 2012
A tenant can make or break a landlord's experience of owning a rental
property. Finding good tenants and keeping them happy is one of the best investments a
landlord can make. Sourcing good tenants is one of the most important tasks for landlords who
manage their own investment properties. By ensuring they have a positive experience while living at your property,
they may be more likely to pay their rent on time, stay in your property
longer and treat it as if it were their own. Here are some tips to find and hold on to great tenants: Think about the type of tenant you want to attract Keeping a good tenant happy begins before you've even purchased your rental
property. When choosing a property to invest in, think about the tenant demographic
you want to attract, for example a family, sole tenant or couple, and choose
a home that is likely to appeal to them.

Properties that are close to good schools, shops and public transport are
likely to be well sought after and may give you a larger pool of prospective
tenants from which to choose. Keep up appearances No one wants to live in a property that has stained carpets and marked
walls. A home that is poorly presented by the landlord may deter good
tenants from applying to rent your property in the first instance, and be
poorly cared for by the successful tenant. Similarly, a property that requires as little maintenance as possible will
make life much easier for both tenants and landlords as it will minimise the
effort and cost involved in the upkeep of the home once the tenant has moved
in. Presenting a clean, tidy, low-maintenance and well cared for property will
encourage tenants to treat the property as if it were their own. Generate interest In order to generate interest in the lease of your property, landlords may
be required to place advertisements in newspapers, on various real estate
websites and on online noticeboards. The advertisement should include
information about the property, when open inspections are scheduled for, and
the lease application deadline.

It is a good idea to arrange open inspections at times that would be
convenient to the type of tenant you want to attract. For example, if you would like to attract young professionals, arrange the
open inspection after working hours so it is easy for people to attend. At the open inspection, ensure you talk with as many potential tenants as
possible so you can put faces to names when processing lease applications
later on. Screen tenants After the lease application deadline has closed, landlords will be required
to screen potential tenants. The first step is to contact the employer of your preferred tenant to
confirm that the information they have provided regarding their position,
length of employment and salary is correct. It is also important to contact their previous landlord to discuss any
issues that arose during their last tenancy, as well as the personal
referees listed in their application. If an applicant is applying for his or her first lease and has no previous
record of renting, speaking with responsible adults such as school teachers
may suffice. If you are a member of a specific real estate industry association, you may
have access to a tenant database which you can also use to search the names
of your shortlisted potential tenants to find out whether there are any
recorded issues with previous leases. Attend to maintenance issues promptly Once you have selected your tenant and they have moved into the property,
ensure you make every effort to attend to any maintenance issues promptly. It can be quite frustrating for tenants if their requests for repairs go
unanswered, and if they aren't getting the attention they deserve they may
begin to question their commitment to your property and become more careless
with it. Injury or loss resulting from a safety hazard that has not been attended to
might also give rise to a costly legal liability claim. Responding to maintenance issues in a timely manner signals to your tenant
that you care about the property and value their concern for its condition.
This can contribute to creating a positive renting experience for your
tenant. Even if you do find good tenants, it is important to not take them for
granted and rely on them to make sure nothing goes wrong. Even the best tenant can accidentally damage a property or lose his or her
job and be unable to pay rent. Every landlord should have a tailored landlord insurance policy that covers
both malicious and accidental damage, legal liability and loss of rental
income. Landlords can also enhance risk management by appointing a property manager.


The time and effort that property managers can save landlords as well as the
experience and knowledge they provide can be well worth the cost for their
services. A property manager can also help to find tenants, ensure the correct
paperwork is in place, assist landlords to form a professional relationship
with their tenant, collect the rent, conduct property inspections and liaise
with the tenant on behalf of the landlord. Carolyn Majda is insurance manager at landlord insurance specialist Terri
Scheer Insurance.


Best regards
Linda J. Debello
L J Gilland Real Estate Pty Ltd
PO Box 19, Zillmere 4034.
Office:- 07 3263 6085
Mobile:- 0409995578

Confidential Email:- The information in this message is intended for the
recipient named on this email. If you are not that recipient, please do not
read, copy, distribute or act upon the message as the information it
contains may be priveleged. If you have received this message in error,
please notify us immediately by return email. Thank you for your
co-operation.

Why mortgage holders should talk to their lenders and consider refinancing article for Clients, Associates and Friends of LJ Gilland Real Estate Pty Ltd

Why mortgage holders should talk to their lenders and consider refinancing: Cameron McEvoy

By Cameron McEvoy
Thursday, 19 July 2012

I want to begin by saying this: I do not house any hostility towards lenders. In fact, I’ve written many times in the past about how lenders can be your best friend when it comes to starting out fresh in your property investment career. Let’s be honest; if you’re like most new investors out there, you don’t have suitcases of cash just lying around, ready to buy real estate with, so lenders can absolutely be the “determining force” in your decision to get into property investment. If no one will lend you money, well, your pipe dreams can be quickly flushed.

All of that aside, lenders are simply a means to an end. Providing that you find a lender that offers the best rate and features relevant to you, they are all pretty much the same. For many years, lenders had, quite cunningly and cleverly, marketed themselves as more of an authority over you. They did this by using a certain kind of language when discussing and corresponding in paperwork the nature of their products. Basically, they made it seem like you were locked in forever to their mortgage products. One way they did this was to charge excessive and complicated “break fees” should you ever look to shop around and move to a different financier.

The industry watchdogs, and eventually government bodies, cottoned on to these tactics and established legislation to remove all of these break fees, effectively making it much easier to switch your mortgage to a better/cheaper product in the marketplace. So you know (and it goes without saying, you need to double-check this yourself should you actually be looking at breaking a mortgaging product), banks cannot charge their exit fees anymore, however you will always have to pay the government processing fees – usually a couple of hundred dollars only – to get out of a mortgage.

There was initial fear that as a result, lenders would recoup these losses by charging heavier entrance fees into new mortgage products; however this has not really happened as yet, at least to extremes. The beauty of the removal of break fees meant that the marketplace has become more competitive, and lenders now actually have to fight their competition to get a slice of your potential custom.

For any would-be switchers out there, my advice is to do up a spreadsheet and calculate all the costs to switch out from one product into a new one. If the savings in one year’s interest repayments at the new lender’s rate is greater than double the cost to switch, it is an exercise worth doing.

When approaching lenders as a property investor – even if it is your first property – you should always make clear mention of your growth potential and desire to hold a large portfolio. Although it won’t win you any brownie points in terms of qualification and verification for mortgage products, mentioning your growth plan to them will certainly make them earmark you on their computer systems! No jokes – I’ve seen lenders who literally input an asterisk against someone’s details, which is pretty much code for “keep an eye on this one; he could be a repeat customer!” I would encourage everyone to do this when buying their first property, even if you only intend on buying a home to occupy and never an investment property.

It is therefore important to remind a lender at times just how valuable you can be as a potential “repeat customer”. Having a great mortgage broker working for you can help with this – they are able to leverage – and effectively vouch for – your future portfolio growth expansion/potential and use this as a bargaining chip to negotiate better product offerings back to you, but I strongly believe that it is always important to have a direct and solid relationship with your lender(s).

All of this is especially important when considering the times we’re living in. Finance is edging further and further down, and interest rates could fall to all-time lows. Lenders know this. They understand how the cheaper rates in market will truly change the dynamic for everyone. In fact, I attribute the recent increase in lender marketing campaigns, which heavily promote “switch to us” themes in their tactics as a response to this trend. For example, UBank from NAB has released an online home loan product offering a variable rate of 5.62%, one of the cheapest currently on offer in the market. But the bank is very quick to point out the product is only available to new customers and switchers from other lenders. Existing customers cannot get access to this product.

So as the market – investors and owner-occupiers alike – respond to cheaper finance products hitting the market, consumer confidence may begin to return. This could mean that would-be buyers, who previously held the mantra “the entire global market is too unstable; now is the worst time to take a risk” change to a mindset of “the global market might not be so stable, but darn it, rates are probably not going to be this cheap again anytime soon, so I should give this a second look”.

I’d love to hear from the community about experiences in mortgage switching – was it easy? Were there in fact hidden costs (whether it is a government cost, lender cost, or other kind of cost)? And did the old and new lenders make the process easy or hard? Also, when leaving your lender, was there a last-dash attempt to keep your custom, or did it let you go easily?

Cameron is a NSW-based property investor and maintains a blog.

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Have you changed lenders in the last six years?

Yes

No

   

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What do you intend to do given the current interest rate fluctuations?

Keep my existing mortgage

Investigate the option of refinancing with a different lender

   

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How to avoid the winter home buying blues: The case for and against buying now
By Mal James
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http://lindajdebello.wordpress.com

Best regards,

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Linda J. Debello Licensee, LJ Gilland Real Estate Pty Ltd

Tel: (07) 3263 6085 | Mobile: 0409 995 578

www.ljgrealestate.com.au


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