23 Ways to Cut your Overhead in Real Estate Investing

Is your cash flow a bit tight? Here are some ways you can make things a bit easier. Written by Michaela Ryan for the API Magazine May 2007 issue.

Many beginner investors in real estate put a high proportion of their income towards their mortgages. Eventually rents rise and cash flow becomes a lot easier. But in the meantime, there could be a few years when you’re strapped for cash. So here are some suggestions for cuttng your living and property expenses, to free up some cash flow and make life a little easier for real estate investors.

1 | Stick to a real estate investment budget

Karen Novak, a certified financial planner with Westpac, says the first thing you need to do is work out where you’re spending your money. There are a lot of pro forma budgets available online or through financial advisers. You could use one of these or simply go through al your bills and work out what you’re spending each month. According to Novak, the problem areas for most people isn’t their bills, it’s their discretionary spending. Most real estate investors underestimate the amount they spend on items such as groceries, entertainment, takeaway and clothes. That’s why Novak recommends tracking your expenditure for a month and copmaring it to your initial estimates. Once you know how much you’re really spending you’ll be in a good position to establish a realistic weekly limit.

2 | Identify your weaknesses

All real estate investment professionals and beginners have weaknesses. As you track your spending, you’ll see where your greatest weaknesses are. For example, Novak says some people regularly go to the supermarket for one thing and end up coming home with six additional items. Another person’s weakness might be shouting rounds at the pub on their keycard once their cash runs out. Once you’re aware of your weakness, you’ll be able to change your behaviour.

3 | Negotiate with a property manager

Do you own a number of properties, managed by different property managers? If you offer several properties to one manager, you’re in a strong position to ask for a discount. These days there are a number of property management real estate companies that service an entire city rather than one suburb. Tenant enquiry tends to come largely from the internet these days, so it isn’t as important to have a local manager as it once was.

4 | Do real estate property repairs yourself

If you need to spend a handyman around to a property it can set you back $60 or more. If you employ a gardener to attend a property regularly, it can cost you several hundred dollars a year. Are you capable of doing these jobs yourself?

5 | Shop around for insurance on property

Do you know how competitive your insurance premium is? Not just landloards’ insurance. What about your health, car, and home and contents insurance? It sounds like tedious work shopping around for a better deal. But it’s just a matter of making a few calls that might save you hundreds of dollars each year. Alternatively you can ask an insurance broker to shop around for you. Or you could try an online service such as www.iselect.com.au to compare a wide range of health insurance premiums.

6 | Shop around for phone and internet services

While we’re on the topic of shopping around, there are huge savings to be made on your home phone, mobile and internet bills. When your contracts expire, it’s a good time to consider your options. Or if the cost of breaking an existing contract is small compared to the savings you’ll receive from a different service provider, it could be worth while making the switch even earlier. There are attractive deals in each of these areas individually. Or you could bundle the three services with one provider to attractive discounts. You just need to set aside a hour to go online and consider the packages that various companies offer.

7 | Reduce bank fees

Bank fess and charges can take a nasty bit out of your savings each month. If you shop around, you might be able to swap to a bank or building society with much lower fees. In some cases you can be stung withfees even though your account is closed.

8 | Use your own ATMs

For beginner real estate investors in Australia, do you know how much you pay every time you use the ATM of another bank? If you’re regularly incurring fees of two or three dollars, you might want to think about locating the nearest ATM or branch belonging to your bank, and doing your withdrawals so you don’t have to find an ATM so often. Check your bank’s terms and conditions to find out whether you’re charged a fee for getting cash out via EFTPOS. It might be that you can get your weekly pocket money when you do your grocery shopping.

9 | Reduce credit card costs

Beware of late payment fees and over-limit fees on your credit card, which can be up to $40 a pop. According to the ACA, if you don’t make a payment by the due date, some credit unions even charge $15 every seven days until a payment is received. By shopping around you might be able to change to a credit card which offers a much lower interest rate and perhaps no annual fee. The market is becoming much more competitive.

10 | Consolidate Debt

Novak says you can save money by consolidating the debt that you have. Novak suggest you could settle your other credit card debts using the new card, and then pay of the debt on the new card in a focused period to time so that there’s no debt remaining by the end of the honeymoon period. This strategy could get you out of the cycle of making costly ongoing interest payments – so long as you have the discipline to carry it out properly. Alternatively you can speak to your mortgage broker or banker about consolidating personal loans and credit car debts by refinancing your home loan on your residence property.

11 | Pay less interest

in some cases you will be able to reduce your monthly mortgage commitment if you refinance to a new lender or negotiate with your current lender to get a reduced rate. This is extremely great for first time real estate investors and investment professionals who can lower their monthly costs by a lot.

12 | Pay interest only

There are pros and cons if you pay interest only on your mortgages (as opposed to principal and interest on your real estate investment properties). For example, sometimes it can hold back you borrowing capacity (i.e. next time you apply for a loan the bank might not be willing to lend you as much money as it otherwise would.) However, paying interest only on loans is a common strategy for reducing the overheads of property investment.

Points 13 through 23 are coming soon! Stay tuned.

Prestigious Real Estate Properties makes Real Estate Investment a Snap

Published in the Real Estate Business Edge newspaper Advertising Feature in February 2007. Generate cash flow while you watch property value increase.

Every would-be real estate investor is seeking the fiscal equivalent of the Holy Grail: a fully secured, no-risk deal with guaranteed and robust rates of return.

Unfortunately, the Holy Grail remains elusive. And experience home buyers and sellers realize it’s a rare investment that doesn’t entail at least a minor element of risk. But that’s the key to wise investment in real estate: you’ve got to tap into the highest possible returns while keeping risk as far out of the picture as possible.

At Prestigious Properties, President Thomas Beyer and the Chief Operating Officer Doug Thiessen have shown that the syndicated purchase of carefully selected rental properties can bring real estate investors reliable quarterly cash flow and significant equity appreciation, with moderate risk.

Beyer and Thiessen have developed a highly successful formula that has made money for hundreds of their associates, most of them “ordinary” real estate investors who have never regretted their decision to enter into a syndicated purchase agreement.

“Investors generally want three things: zero risk, regular income on a monthly basis and a 100-per-cent guaranteed chance to watch their equity grow at a substantial rate,” says Beyer, an MBA from the University of Alberta as well as a Gold member of the Alberta Real Estate Investment Network.

“While nobody in the real estate investment community is able to offer absolutely iron-clad guarantees, Prestigious Proeprties CAN enable you to share in the ownership of a revenue-producing apartment building that’s as close to bulletproof as it’s possible to be,” he adds.

Much of the beauty of the plan lies in its simplicity. Beyer urges you to become a landlord while leaving all the hassles to him and his team. His program works this way: real estate investors with a minimum of $25,000 come aboard as partners in a syndicate to purchase an under-managed, under-valued property in a well-regarded area of a promising city such as Edmonton, Powell River, B.C. or certain medium-sized towns in Saskatchewan, B.C. or Alberta.

Beyer likes to refer to his ideal target properties as Class C buildings situated in Class B urban neighbourhoods. These are choice if underrated districts, where property values seem destined to appreciate.

When a purchase syndicate is formed, such properties will be acquired, skilfully managed, appropriately renovated, and eventually re-financed after a lapse of time ranging from nine to 24 months. By that time, rents will have increased, with a commensurate rise in the value of the building in question.

Under the terms of a pre-arranged exit strategy, the syndicate will eventually sell the real estate asset for as much as 30 to 90 per cent more than the original purchase price.

“There will always be demand for residential tenants in dynamic provincial economies such as B.C.,, Alberta and Saskatchewan. Time and again, we have proven the rental market is a good growth area, whether the economy is strong or soft,” says Bayer.

Prestigious Properties expends enormous effort on due diligence, carefully and methodically identifying potential real estate asset able to combine positive cash flow with equity growth. Apartment or townhouse complexes full of renters tend to match this profile beautifully. Because, as Beyer points out, the more rental units in the building, the greater the cash flow – even after taking care of upfront expenses such as taxes, mortgage payments and rental management.

As an example, the president cites the company’s most recent investment opportuniy. It’s a 104-unit townhouse style complex in Wetaskiwin, not far southeast of Alberta’s capital city. Prestigious Properties is currently projecting combined cash flow (generally distributed on a quarterly basis) and equity growth of as much as 15 to 20 per cent a year on this complex. Beyer believes the value of this residential property could easily double within four to five years.

“And don’t forget, there are numerous tax advantages to our program, including flow-through of expenses via our LP. These real estate assets enjoy tax deferred status until such time as they are sold,” Beyer hastens to add.

In short, it’s the perfect way for a man or woman in the street to take advantage of Western Canada’s booming real estate market. Beyer believes mature real estate investors may be kidding themselves if they believe they can retire off a stock-market based investment, such as a mutual fund. They’d be wiser to put their money into a safe, inflation proof REAL estate investment that makes money as you sit back an watch its value appreciate.

Beyer has learned the real estate business from the ground up. An award winning Christian businessman with a glowing track record, he urges you to get smart and go with a winner.

That’s Prestigious Properties. It may not be the Holy Grail, but it’s as close as most investors in real estate are likely to come.

Check out the Prestigious Properties website: www.prestprop.com. Then contact the company at 403.678.3330 or email investor@prestprop.com.

For other joint venture Edmonton real estate property deals and investment opportunities, click here.

Should you sell or rent? The ongoing debate of selling property for capital gains versus keeping them for positive cashflow

Part 2 of this article published in the Australia Property Investor Magazine.

You don’t need to sell to access your gains in real estate

Lomas says people think they have to sell real estate to release the capital gains they’ve made. “But your unrealised gains are worth just as much- probably more, because you don’t have to pay CGT (capital gains tax),” she says. “The gains are there for you to leverage against. You don’t have to realise the gains to leverage into more real estate property or another kind of investment. If people are thinking of selling because they want to cash for seomthing, they would be better to get that cash by borrowing against their equity – although it depends on many variables.”

A comparison of two hypothetical scenarios shows how home equity is more powerful in creating wealth if good property is retained rather than traded. Take two real estate investors who buy similar investment properties for $300,000, one who plans to use the equity build-up to buy more properties, the other seeking to trade the property. For the purposes of the exercise, let’s assume values rise 10 per cent a year andignore buying costs (identical for both real estate investors).

After two years both investors in real estate buy again. Investor A ha $63,000 equity and uses that as leverage to buy a second property for $400,000. Investor B realises his $63,000 equity build-up by selling (and paying around $25,000 in fees and taxes) before buying a better property for $400,000.

After another two years, both real estate investors buy again using their respective strategies. Compare their situations after another two years (i.e. six years after each made the initial purchase):

Investor A owns three investment properties worth around $1.72 million, with total equity of $521,000. Investor A is well-positioned to buy more property.

Investor B has one property worth $605,000 with equity of $105,000. Along the way, Investor B paid out $60,000 in fees and taxes by selling and is about to lose more, because the strategy in real estate property investments calls for Investor B to sell and buy again.

Plan and be patient with real estate

Perth real estate agent Bernie Kroczek says building wealth through property investment requires a long-term goal, developing a real estate strategy and being disciplined enough to follow the plan without over-extending.

“Assuming that you’ve done your homework and purchased wisely within your financial capabilities, holding a real estate property over the long-term (minimum of 10 years) virtually guarantees success – without taking unnecessary risks or trying to pick the real estate market,” Kroczek says. “It’s really quite simple and doesn’t require tricks, elaborate schemes or superior knowledge – which many people pay thousands of dollars for, attending one seminar after another looking for the magic bullet.”

Bright tells all his real estate investor clients they should look at a five-year buy-and-hold as a minimum – but preferably they should never sell. “They should be happy to own the property real estate if the market shut tomorrow and never reopened,” he says. Balanda says he helps many wealthy people with lots of property assets prepare their wills; invariably they’re people who’ve bought and held shares and property. “Very few people create wealth through trading, but I see a lot who create wealth through buying and holding good assets,” he says.

Wakelin advises investors in property to hang on to their tax-free profits and use them to leverage into other assets. “Hold on to good quality assets in real estate and use the equity build-up ad your notional deposit to buy the next property. It’s incredibly simple. The real take home advantage message is that there’s no need to line anybody else’s pocket. Hang on to your profits.”

Wakelin says real estate investors should base property-buying decisions on the potential to double in value every seven to ten years. “You only need to build up $50,000 to $60,000 in equity. You can unlock a good proportion of that and use it to springboard into the next asset.”

Hegney buys with a long-term view and never sells (these days) because he want to avoid the capital gains tax. “I’ve bought and sold 10 or 12 properties and the wealth I’ve created out of that hasn’t been as high as buying and holding five good properties – because a lot of my growth has gone in fees and taxes. “By the time you sell, pay fees an dpay capital gains tax, the next real estate investment you buy has to work that much harder to make up for that.”

Lomas owns more than 30 properties and has only once sold a property. “You might get good growth in the first year or it might be the ninth or tenth year, but you need to hold for ten years to make it work for you. If you’re buying to trade, you probably won’t give it that much time.”

Of course, there are real estate expectations…

Mortgage broker Tricia Green of Home Loans Now is an experienced real estate investor who sometimes sells assets in property. She says it depends on her initial objective in buying a particular property. “Sometimes I buy with the intention of making improvements to achieve capital gains and then on-selling,” she says. “But if it’s negatively geared for tax benefits I wouldn’t want to sell. It depends on what you’re buying it for.”

Green bought a block of apartment units with friends who planned to renovate and sell the improved product. “Our objective is to hold the property investment for a year to reduce the capital gains tax impact – and as the units become vacant we’ll renovate them and sell.”

Green says people who retain properties and build their equity so they can borrow against it to buy more need to be aware of the commitments they are taking on. “That’s fine providing it’s not going to create hardship in meeting repayments,” she says. “You have to service the loans and if the repayments are much higher than the income, it might work against you.

“But I agree, why sell if you’re comfortable with the commitment, because the real estate capital gains will still be there for you to use. If you’re investing for your retirement, just keep them and build up a property portfolio.”

Wakelin says there’s a danger in the buy-and-hold strategy in real estate property investing for people who over-commit and become too gung-ho. “There have been lots of so-called gurus urging people to be highly speculative,” she says. “It’s better to buy a good tenantable property, be patient and let it do its work to allow the home equity to build.”

Hegney says many home buyers in the recent boom market in Perth have made the mistake of buying with short term vision. “People have bought assets in real estate that have been fantastic performers over one or three years, but they’re not long-term performers,” he says. “if the property real estate market goes into reverse, they’re the assets you’d want to get rid of. “I would say to people – all those properties you bought in the cheaper areas that aren’t long-term high growth areas, I would sell them now. They’ve had their run.”

Lomas says trying to trade away your way to wealth is a mistake but it’s also a mistake to hang on to property real estate that doesn’t perform.

“In those circumstances, you have to cut your losses and get out when you can,” she says. “I always say you should never sell but sometimes you need to. I discourage people from hanging onto something that’s a bad real estate investment which is soaking up money and preventing them form buying more property real estate. You might need to get rid of it to allow you to do something else.”

A client of McGeever’s provides a striking example. The real estate investor paid $120,000 for a small suburban unit in 1992 and found it was only worth $95,000 10 years later. He had to decide whether to persevere or cut his losses. He decided to sell and used the proceeds to buy a small retail property investment for $365,000, yielding 9.5 per cent.

McGeever says with rental increases and firming yields, that real estate property is now worth $645,000.

Terry Ryder is the creator of hotspotting.com.au and author of four real estate books.

House Not For Sale – Should You Sell your Real Estate Property? - Part 1

API Magazine of Australia examines why some real estate investors try to trade their way to real estate riches… but is buying and selling property really the best investment strategy? This is what Terry Ryder explains in this article. Part 1 of 2.

Ever driven past a house you owned 15 years ago, knowing you sold for $150,000 and it’s now worth $500,000? If you have, you’ve experienced one of the reasons why most property analysts agree that if you own good real estate, you should never sell. There are other strong reasons to reject the trading method of wealth creation. The high cost of selling and buying real estate is one of them. So too is the power of equity in creating a real estate portfolio.

Sydney property buyers agent Patrick Bright applies the philosophy of American share market legend Warren Buffet to real estate investing. “Buffet’s approach is to buy something he would be happy to won forever. His fundamental question is, ‘if you could never sell it, would you be happy forever?’ “That’s become my focus with real estate. If you follow that approach, you’ll make sure you do proper research and look at areas with future prospects.”

Many real estate property analysts agree. Monique Wakelin of Wakelin Property Advisory in Melbourne says: “Trading is absolutely not the way to go.” And Perth analyst Gavin Hegney of Hegney Property Group says: “If you’ve done your research and bought the right property, you should never sell.”

Impatience and Imprudent Decisions in Real Estate Investing

Gold Coast solicitor Rob Balanda of MBA Lawyers sees many real estate investors make mistakes with their assets because they get bored with them. They sell property assets they should keep because they lack long-term vision. “Patience isn’t a virtue many investors have,” he says. “But it’s a virtue real estate investors need to have to be successful and create wealth.”

Balanda says some residential property investors get too caught up in problems with tenants. They make the mistake of trying to manage the property themselves. Hegney says too many investors in property apply a ‘get rich quick’ mentality and lack a long-term outlook.

He says, “People buy a property, it goes up in value by $50,000 or $100,000 and they think: that’s my vision. I’ll sell and take my profit. And typically they spend it on a car or an overseas trip. “People don’t see real estate investments as businesses. They see them with a terminal life: making a certain amount and then spending it. A good investment is like a business. If it’s a good business and continues to create wealth, why would you sell it?”

Hegney says some sell real estate and properties too soon because they don’t understand the impact of compound interest. “If you have a million dollar asset and it grows 10 per cent, its value is $1.1 million after one year. When it rises another 10 per cent, that’s 10 per cent on $1.1 million, not on the original rela estate property price. By the time you get to year 10, it’s $2.6 million. It’s that compounding effect of property investing that creates the wealth.

“The same thing happens with rental return. With the current rental rates and growth, within five to ten years your rents are well and truly servicing your repayments for a high-growth asset. “In 90 per cent of cases, the most an investment property will cost you is in the first couple of years. After that, your costs should decrease as your rents increase.”

Hegney says in an ideal real estate investment world the only asset people should trade is their principal place of residence. As they create wealth, they can buy a bigger and better home and not be liable for capital gains tax. “But all other real estate property assets you hold forever – unless some drastic change comes to your life.”

Brisbane buyers agent Scott McGeever agrees that the only time you should trade in real estate is to upgrade the family home. “You do that to give yourself a better standard of living and it’s a tax-free ride,” he says.

Real estate investment advisor and author Margaret Lomas says a lot of people trade property assets because they believe it’s the way to get ahead. “But I haven’t seen anyone make a lot of money doing that,” she adds. “And if you do it too often, the Taxation Office will conclude that your business is property trading, which has many implications.

“I knew people who used to do that. After doing it for 15 years, they weren’t very far ahead. All they had was a pretty good house in a good suburb but they hadn’t built up a great amount of equity. They would admit, I think, that it didn’t work for them.”

Real Estate Property Value Growth Does the Work For You.

Imagine if you’d bought the average Melbourne house in 1990 – and did nothing since. You would have paid around $150,000 for the property and by 2005 it would have been worth around $365,000 – providing enough equity to finance you into several investment properties (depending on your ability to service the loans). On the other hand, imagine if you’d sold it in 1992 for the then-average price of $144,000 because the real estate market was taking a caning and property values had fallen in the wake of the bust which followed the boom of the late 1980s. You’d cry every time you drove past it wouldn’t you?

Why hand your gains to the government?

Selling an investment property before buying another means you’re handing a big chunk of your capital gains to government, the legal profession and lenders. Taxes and fees eat a big share of the profits. Bright says buying costs are about 5 per cent of the price – and selling costs include 3 per cent to the marketing agents, 1 per cent in marketing costs, solicitor’s fees and mortgage discharge costs, as well as stamp duty and capital gains tax.

“if you sell and buy again, you’ll blow around 9 or 10 per cent on costs.” Bright says, “You’re just wasting money. It doesn’t make sense when you can save that money and borrow against the property you have to buy a second property. Rather than trading up you’re better off having multiple properties.”

Lomas says a property investor who’s made $300,000 in value growth is looking at $80,000 in capital gains tax if they sell. And Wakelin says: “the bottom line is that property real estate isn’t an inexpensive asset class to get into and out of. So it requires a long term strategy. It’s important to buy the best quality real estate property assets you can and hold them long term.” “When you buy and sell, you’re up for very hefty costs, not the least of which are stamp duty and capital gains tax. Why line someone’s pockets? Line your own.”

For more tips, please read through more articles on Condo Blogger or visit the API Magazine website.

More Tips on Real Estate Renovations for Homes from API

Time to hold

Though they were more than happy with the outcome of the duplex project, Paul and Cindy have changed their overall property real estate strategy in the months since then. Rather than renovating real estate and selling, they plan to hold from now on. The duplex halves would be worth another $50,000 each already, Cindy notes.

“We have in the past when we’ve renovated real estate properties always on sold them but we’ve finally tweaked that that’s probably not such a great idea because of capital gains tax, stamp duty and the like, so we’ve decided to start keeping the ones that we renovate.”

The Hendersons have made their decision with the aim of living off extra borrowings against their home equity gains. Paul explains, “Rather than sell our assets for our money, we decided to keep the assets and do ourselves three favours; firstly, we get to keep an appreciating asset; secondly, we don’t get to pay capital gains tax on what we make; and thirdly, we relive ourselvces of the need to instantly find another dump to do up. We’ve literally got rid of three problems by adopting that strategy.”

Paul and Cindy are well on their way to building an impressive real estate portfolio. They own 15 properties and homes and are about to settle on their 16th, with a combined LVR of about 50 per cent. They’re keeping busy with a number of real estate projects currently under way, including a triplex development in Perth, a house construction on a block in Busselton and a house and land packages in Karratha and Perth, as well as their biggest renovation real estate property yet at upmarket Carine in Perth’s northern suburbs.

Paul and Cindy say their accountant has sanctioned their idea of living off increased borrowings. It’s a grand scheme for a couple who only got their start in the real estate property world in 2003, after a wealth-building course introduced them to real estate property investing. In 2004, Paul and Cindy sold their office supplies business and devoted themselves to the property real estate game. “It’s been hammer and tongs at the property empire ever since,” Paul says.

Renovating for charity

At the suggestion of a real estate property mentor, Paul and Cindy recently teamed up with other real estate investment students to renovate a property for charity, as a result ofa challenge to raise $42,000.

“We decided pretty much the only way we were going to raise such a large sum was from a house renovation,” Paul said.

Paul and Cindy bought the house through their trust – for $205,000 – and again managed to negotiate a long settlement with prior possession. The real estate investment gropu then went about giving this “dump” a facelift. Some of the other real estate members of the group were very handy, so few tradespeople were required. A number of the suppliers gave discounts in order to help the charitable causes. Just 14 weeks after the purchase, the house sold for $285,000, with the selling agent donating her time.

“That was a really great result,” Paul says. “there were about $30,000 costs so there was about $50,000 to $55,000 profit from that.” The profits were split between the WA Children’s Cancer and Leukemia Socity and the Hebron Orphanage of India that was damaged by the Boxing Day tsunami in 2004. All three groups were “over the Moon”, Paul says.

After their recent experiences, Paul says he and Cindy would be perfectly happy to invest with others again, adding “you just have to partner with someone you trust like you trust yourself.” I’m happy to do it but only under very strict guidelines because there’s so much scope for stuff to go wrong. You never quite see people’s nature as when money’s at stake,” Paul says.

That said, Paul and Cindy stress there were no problems during the duplex renovation. It just opened their eyes to possible risks.

“Imagine for one moment if we’d put $20,000 of costs into the real estate renovation and at that point something went wrong with the transfer of ownership such that the sale couldn’t go through,” Paul says. “How keen would the other people be to say, well okay, we were going to split the profits, now I understand that we have to divvy up the losses too. They might’ve said, no, we did the work, you did the finances and the finances this time have lost $20,000. Better luck next time but you’re not getting anyh of my money.”

API Interactive
Do you have a question for Paul or Cindy? Email it to forum@apimagazine.com.au. Answers will be published in a future issue of API.

Team Spirit in Real Estate Renovations

Written by Matthew Liddy for the API Magazine – January 2007 edition. Full-time investors in real estate Paul and Cindy Henderson have teamed up with like-minded investors on two recent projects.

Paul and Cindy Henderson don’t need any help to complete profitable renovations in real estate. They’ve been focused on building their wealth through property real estate investments for about three years, and have spent more than two of those years as a full-time renovation team. However, two of their recent real estate renovation projets have seen them teaming up with other investors to complete two very different projects – a duplex renovation and a home makeover aimed at raising $42,000 for charity.

In the case of the duplex renovation, Perth locals Paul and Cindy joke that it’s been one of the easiest makeover real estate projects they’ve undertaken – since their business partners did all of the work. That might now sound fair – but the Hendersons did put up the omney, handle all the payments and complete the settlements on purchase and sale.

“Our real estate partners had the time but not the money,” says cindy. “We had the money but not the time,. So it was a great real estate project which worked out extremely well for both of us – we couldn’t have been happier with the outcome.” Paul and Cindy financed the renovation using a loan with an 80 per cent loan to value ratio (LVR), with the 20 per cent deposit plus stamp duty costs coming from a line of credit they already set up.

These real estate renovations for the home masters generally work on their own but admit this particular partnership worked out very well. “We liked the idea of walking away with almost $70,000, for turning up for half an hour at the start and half an hour at the end,” Paul laughts.

That, of course, is understating the Henderson’s involvement in the real estate project somewhat, as they kept a close eye on the most aspects of the deal. Through a local real estate agent, the Hendersons’ business partner identified a duplex at Bateman in perth as a potential real estate target for the renovate and sell strategy they had in mind.

“We looked at the statistics on what was selling down there and similar duplex pairs – in fact, ours was better we felt – were going for $300,000 each, back when we were being asked to pay $440,000 for the pair,” Cindy says. “So we could see where good dollars to be had, even though we did need to spend some money on the renovation.”

Paul says upmarket Bateman real estate is an attractive area for real estate investment, partly due to its easy access to both Fremantle and Perth, but also due to the strong reputation of a local school. “It’s zoned for what is in effect the high school with the best record in all of Australia for passing out the youngsters (in terms of) scholarships marks and so on,” he says.

Conditions Attached

The Hendersons discovered that the real estate vendors had had the same plans for the property home as they did – strata title the two units, renovate and sell. However, changed circumstances meant they were now looking to sell them as a pair. The real estate home owners already had conditional approval for separate titles and just had to complete some building works – such as raising the dividing wall up through the roof space – in order for it to go through.

The Hendersons and their real estate business partners were able to negotiate a contract whereby they paid the full asking price for the home units but the owners completed the process of moving the property homes onto two separate titles before the purchase. In addition, they arranged to have access to the duplex during the settlement period.

This saved them about $10,000 on the strata title costs and gave them the benefits of a long settlement period during which they could begin the renovation, saving thousands of dollars in holding costs for the real estate property homes.

“You do take a risk when you do that because if a deal falls through and you’ve spend money on renovations, you have to walk away, “cindy says. “It was a risk for us but we couldn’t really see anything going wrong. We knew that we’d get finance and that things would proceed on our side.” The risk paid off – the home vendors completed the division of titles during what turned out to be a smooth three month settlement.

Paul and Cindy say that while they were pretty much hands off during the settlement renovation process, the makeover did fit in with their general strategy, meaning it didn’t involve any structural changes to the homes.

“We’ve seen friends of ours get involved with that sort of thing and year laters they’re still trying to put the walls back up,” Paul explains. For the duplex, the real estate renovation included remodeling the bathroom, kitchen and laundry, rending the exterior, new plubming, new electrics, installing air-conditioning, and some landscaping.

Because Bateman is an upmarket real estate market area, the Hendersons and their business partners opted for a high-class finish targeting professionals. “We decided to put granite beach tops and things like that in, whereas if it was a lower socio-economic group, we wouldn’t do that,” Paul says.

Blowing the real estate budget

Going into the real estate purchase, the new partners drafted an agreement setting out the terms of the deal. Paul and Cindy say they opted not to get legal advice on the document but did run it past their property mentor.

They also drew up a more comprehensive budget than they would have if going it alone. “We did a budget, which got blown,” Cindy laughs. “We do up a general budget when we’re doing a reno anyway just to make sure you’re not going to pay too much for the rela estate property home but we probably did this one more detailed to ensure the profit was there before we finished the offer.”

Those budget over-runs, Cindy says, were the most disappointing aspect of the real estate project. “We ended up paying something like $8000 just to do up the front yard and that was the removing trees, clearing the land, putting grass down and a small retaining wall,” she says. “But thought was too much. We probably could have done better there.”

Paul adds, “One of the major errors that I feel we made was that we agreed to look after the finances and pay the bills and tradies and so on but because (our home real estate partners) were doing the work really without our intervention – they were simply ordering the trades and passing the bills our way. “With the benefits of hindsight, if we’d had a bit more involvement, there’s no way in this world we would ever agreed to spend $8000 on a front garden.”

Despite the expense, Cindy and Paul were ecstatic with the outcome of the real estate renovation project – both in terms of the final product and the financial reward. After a $60,000 spend on renovating the real estate home property, the units sold for $335,000 and $332,000. The Hendersons saved money by welling without an agent in real estate. Both units sold within a single weekend, thanks to Perth’s hot real estate market and some clever tactical thinking.

“We looked for some agents’ adverts ont eh internet and we found that there was an auction just down the road from our property real estate that was going on the Saturday after we were ready to sell,” Cindy says. “We waited the extra week and we put our open house in to overlap the time the auction was going to happen.

They then set up their signs so that anyone going to the real estate auction would know about their open house. “I think we got about 75 people through and about half of those were from the real estate auction, so that worked quite well for us,” Cindy says.

The decision to go upmarket real estate paid off, as both units sold to professional couples. Paul and Cindy split the $134,000 gross profit with their business partners 50:50.

Don’t make the same mistake in property investing in real estate!

Lawyer Rob Balanda pulls more property investment warning stories from his filing cabinet, so you can learn from the mistakes of others. This was published for the Australian Property Investor magazine in February 2007 (apimagazine.com.au)

Trading Properties

I received a call from a real estate investor who had been sitting on an old fibro cottage in an areas which he though would be a prime redevelopment real estate site. He had been watching real estate prices rise and rise but in the past year or two they’d slipped back.

He didn’t find this out until he put the real estate property on the market at what he thought would be a record price, only to find out that the real estate market hadn’t rung a bell when it hit the top, and he’d missed the upswing. Keen to see the real estate property investment, but with unrealistic expectations about its value in the market, he placed an ad in the exchanges and trades section in the real estate part of his local newspaper.

As luck would have it he found someone with a similar problem and he agreed to exchange his real estate property for another person’s expensive unit. The exchange got him out of a property investment that he no longer wanted but he didn’t have the cash fro the sale to, for example, pay his capital gains tax.

I also gave him a fright when I told him the amount of stamp duty he’d have to pay on the expensive unit that he was trading for. He then suggested to me that we should “write down” purchases prices of both real estate properties to save him and his co-investor a bit of stamp duty and a lot of tax. Wrong.

My advice to him was this was a definite no-no and I strongly urged him not to do it. The reasons I gave him were as follows:

1. Firstly, writing down the real estate purchase prices deprives the Australian Tax Office of revenue and this is considered fraud.

2. Secondly, the Office of State Revenue is entitled to stamp duty on the real estate purchase price of the traded property investment or its value, whichever is greater, and by writing down the purchase prices he will deprive them of revenue.

3. Thirdly, as he was transferring a loan from the fibro dwelling to the real estate unit this created all sorts of problems for him and his lender. Lenders base the amount they’re advancing on the value of the real estate property or the purchase price – whichever is lesser. If he wrote down the value, the lender wouldn’t be able to transfer the full amount of the loan that he had on the fibro cottage over to the new unit.

4. Finally, and worst of all, you artificially create a lower cost base for capital gains tax purposes which could come back to haunt you in the future. For example, if you wrote down the value of the real estate property which was valued at $600,000 to a $400,000 sale price and you later sold the property after it had gained $200,000 (making it now worth $800,000), tax would be payable on the amount of $400,000 ($800,000 less $400,000). This is a huge mistake and the real estate investor wanted to do it to save himself a miserable amount of stamp duty. Forget it!

Option or first right of refusal on real estate property investments

A real estate property investor advised me that he and the owner of the property had agreed that he would have first option to buy this property in the next six months and asked me if I could do something simple to document this agreement. I asked him:

What was the purchase price for the real estate property investment should the first option be exercised?

When would the settlement take place?

What was the amount of the deposit?

I also asked some other questions about details that are normally included in a formal contract of sale for real estate property.

It was clear to me that he hadn’t agreed to take an option to buy the property investment, but had simply been given a right of first refusal. There’s a fundamental difference between these two concepts.

An option to purchase real estate gives the buyer of the property the right, but not the obligation, to buy the real estate property within, say, a six-month period. It allows the investor of real estate to put the property on lay-by and during the next six months make up their mind about whether they wish to purchase the property or not.

It’s essential however that the exact terms of the contract that comes into existence if the option is exercised are finalised at the same time the option is granted for that real estate property specifically, for example the purchase price, settlement date, deposit, etc.

A right of first refusal has been described by the High Court of Australia as “worthless”. It means that if the real estate owner of the property at some time in the future decides to sell the property – and they don’t have to – they agree to first advise you that it’s now available for purchase.

That purchase will be on whatever terms and price they determine and once they’ve made you aware that it’s for sale, then you’ve discharged their obligations to you. It’s for this reason the High Court says it’s worthless.

For more practical point of view, and not the lofty heights of the highest court in the land, the right of first refusal does have some value. It’s worth something to be the first person to know that a real estate property is for sale, as you can then at least take the initiative and attempt to buy it.

Rob Balanda is a partner of MBA Lawyers at Surfers Paradise and the author of the “Made Simple” series of publications available from Business Mall. Please note that this information is of a general nature only and does not constitute professional advice. You must seek professional advice in relation to your particular circumstances before acting.

Cosy Warmth Without a Flue – Real Estate Condo Trends and Tips

An innovative new freestanding fireplace runs without a hard connection, is environmentally friendly and the ideal answer to those lacking a chimney to fuel the fire.

A Vancouver retailer is selling fireplaces for people who thought they couldn’t have one. Vancouver Gas Fireplaces is now selling the EcoSmart Fire, a high-quality free-standing fireplace that runs on ethanol without any connection, flue, chimney or gas line.

“The design is simple, portable, attractive, and doesn’t require installation,” says Robert Koby, president of Vancouver Gas Fireplaces. “We’re finding that condo dwellers are all over it.”

Conceived in Australia, the EcoSmart fire provides unprecedented flexibility – it fits just about anywhere. The EcoSmart Fireplace has a contemporary look that makes it suitable for apartments, houses, bars and restaurants.

“Some places were built without fireplaces or don’t have access to natural gas lines. Now the EcoSmart Fire provides the opportunity to have a fire feature,” says Koby.

Features of the EcoSmart Fire:

- It can be installed in a pre-existing fireplace site or be free-standing.
- It is environmentally friendly – fuelled by denatured ethanol, a renewable modern energy, it burns clean and is virtually maintenance free
- The EcoSmart fireplaces have no flue and require no hard connection
- the core of the EcoSmart fire is a metal box about 10 centimetres high and 30 centimetres square with a slot in the middle for the flame.
- the fuel reservoir is in the base of the metal box
- The core EcoSmart Fire can be installed in an attractive frame of fascia to suit the setting
- The EcoSmart Fire has been independently tested and has UL approval
- Units are compact and portable so ideal for apartments houses, bars, restaurants and offices
- The EcoSmart Fire can regulate the intensity of the flame and turn it on or off at any time.

The EcoSmart Fire is available at Vancouver Gas Fireplaces, www.vangasfireplaces.com, phone 604.732.3470.

What affects real estate values and property values in the eyes of a home purchaser

By Terry Ryder for API Magazine January 2007. The second part of this two part article.

Public Transport Nodes and Real Estate Values

Matusik has investigated house values several times in the past five years to determine the importance of being next to public transport nodes. The evidence suggests home buyers are paying 10 per cent more to be within 500 metres of railway stations and 19 per cent more to be near major busway stations.

Over the past five years, real estate values near a railway station have increased 12.6 per cent a year – compared to the Brisbane average of 10.3 per cent.

“Higher prices are being paid to live near the major busway stations of Woolloongabba, Greenslopes, and Holland Park. Five years ago houses close to these stations weren’t much more than the Brisbane average but the median house price near these transport hubs this year was 19 per cent higher than the Brisbane average,” Matusik says.

Real estate values for these properties rose almost 12 per cent in the 2006 financial year, compared to the Brisbane average rise of 3.5 per cent. Bright says Sydney homes need access to some mode of public transport to be desireable – either train, bus or ferry.

“The more the merrier – it’s mandatory to have at least one ofthose modes of transport available, preferably two,” Bright says. “If you don’t have train or bus or ferry, you’re making it hard.”

Lifestyle Precincts, shops, parks are important for real estate buyers

Brisbane house values within 500 metres of noted lifestyle precincts – suburban high street or café strips – have risen 13.5 per cent a year over the past five years, compared with the Brisbane average of 10.3 per cent.

The median house price in these precincts is $584,000 – compared with the Brisbane average of $354,000. House values and real estate properties rose 9.2 per cent in these precincts in the 2006 financial year, while prices rose only 2.5 per cent across Brisbane.

“Home buyers in these higher-priced inner-city locations were paying 61 per cent more than the average in 2002,” Matusik says. “This premium has lifted to 81 per cent when compared to today’s median price. When comparing the results against the inner-city median house price, we find that the premium paid to live near a high street was 10 per cent in 2002 and 16 per cent today.”

The research showed there was a premium paid to live close to major shopping centres as well. This wasn’t the case in 2002 but today Brisbane, Gold Coast and Sunshine Coast real estate home buyers will pay 18 per cent above the area’s average to be close to regional shopping centres.

There was a similar result for homes close to major public open spaces. There was no premium in 2002 but now home buyers pay a premium of 18 per cent. “Annual price growth has been similarly impressive, with the results being 15.1 per cent a year over the past five years,” Matusik says.

Bright says lifestyle precincts are becoming more and more important in Sydney, because Generation X and Y want it and baby boomers are moving towards them as they edge closer to retirement.

Noise a No-No and will decrease property real estate values significantly

Home and apartment buyers are finding themselves victims of noise rage. Archicentre, the building advisory service of the Royal Australian Institute of Architects, says pre-purchase inspections of real estate show this is a growing issue.

“Often it’s only when people move in that they find their new home is subject to noise which can lead to stress, poor relationships with neighbours and in some cases physical confrontations,” says Ron Tanton of Archicentre.

Noise problems arise from poor real estate building practices with inappropriate acoustic separation between apartments, the tendency for people to invest thousands in home entertainment systems, noise-producing polished floors in units and balconies built like clusters on high-rise condo buildings.

“Noise is an issue everyone needs to assess before signing on the dotted line for a real estate property,” Tanton says. He suggest home buyers speak to neighbours and see how they feel about living in the apartments – as they’ll soon tell you if they’re suffering sound rage.

Bright says he visits residents living in apartments above the one he’s examining for a client and asks them to walk about so he can assess noise transfer. It’s important for home buyers to check whether the walls have noise-dampening insulation and concrete floors which lessen noise transfer. Kelaher says noisy apartments will sell for 20 to 25 per cent less than quiet ones.

Water tanks worth watching ... most so in Australia

Water-wise features will attract a premium and may, in the future, be a major contributor to achieving a sale. As the drought and global warming become top-of-mind for many Australians, this factor will gain increasing importance in the real estate market.

A recent website poll by Matusik Property Insights examined whether rain tanks added value to a home. Two-thirds of respondents thought they did. Of the ‘yes’ voters, 30 per cent thought they added between 2 and 5 per cent to the property’s overall value, while 20 per cent thought a rainwater tank would add 5 per cent of more. Matusik notes, however, that a 2 per cent premium would add $6500 to the average Brisbane home – twice the current cost to install a typical water tank. As the consequence of drought and water restrictions become more apparent, the value of having a water tank in a real estate property grows. Archicentre says one of the outcomes of water shortages will be more cracks appearing in Australian homes and real estate. It predicts cracking in homes will rise 10 per cent.

Archicentre’s latest survey of 75,000 homes across Australia found South Australia suffered the worst cracking problems in the country, with almost half of homes affected. The next highest was Tasmania, with 45 per cent of real estate affected.

Archicentre’s manager in SA, Jim Jovanovic, says that as water restrictions are implemented throughout Australia, the moisture in the ground is ‘changing quite dramatically.’

“When the soils dry out, strain is put on the real estate property structure and cracks can appear overnight,” Jovanovic says, “In many cases, cracks up to 10 millimetres in brickwork could close up once the soil regained moisture content. More serious cracking might need some form of structural repair.”

Terry Ryder is author of four books and creator of hotspotting.com.au.

For more information about Australia pre-construction condominium residences.

A Hot Real Estate Market in Darwin

Wendy Trewartha found herself in NT when her husband was transferred with work. It was here she realised a passion for real estate property and found a red-hot market. By Bronwyn Davis for the Australian Property Investor Jan 2007 magazine.

Why have you invested in Darwin real estate?

We started investing in Alice Springs because we were living there. When we moved to Darwin about four years ago, we realised we could make a better return. It’s also easier for us to own real estate investment properties where we live so my husband can do the maintenance. We looked at the returns carefully. We wanted to be able to negatively gear but didn’t want to have to make up a large shortfall.

How do you believe the real estate market is performing and what do you expect from it in the future?

Prices are still on the rise, but things seem to have slowed down a bit. A couple of months ago a real estate property would be in the paper once before it was sold; now it might be advertised for a couple of weeks. A house around the corner from us went up for action recently and I asked a few real estate agents what they thought it would go for. They all thought about $450,000 but it ended up selling to an interstate investor in real estate for $493,000. I think this real estate market will continue to increase in value. They’re doing a new 700-block development of property near us at the moment. They’ve just done the first stage, with land priced at $217,000 to $250,000 for blocks from 500 to 900 square metres.

How is this affecting your real estate portfolio?

This new real estate development should increase the land value on my own home, which is good because I’ve been using it to buy other real estate properties. I’ve found it easy to borrow against my own home because each time I get a valuation done, it’s gone up. I bought this house four years ago and had a valuation done when I first purchased my first condo unit investment in 2004, then another when I bought the last two real estate units about a month and a half ago.

Do you intend to invest further in Darwin real estate? Why?

We’ll have a break for a little while because we only just bought the last two. The next one will probably be something we can rent out now and retire to later. We thought about buying and building in the new estate, but I think they’ll be priced out of the rental market so we wouldn’t get enough of a return. Half of them are going to be defence houses though, so we might consider one of those.

What advice would you give about buying real estate property in Darwin?

Probably the same advice I gave my daughter – she’s just buying her first real estate property. I told her that as soon as she gets enough equity in that one to try to buy her next real estate property and keep going from there.

In hindsight, what would you have done differently?

I would have got into it earlier. We procrastinated for a fair while before we bought that first unit.

Your best real estate investment?

The house I’m living in at the moment. That’s more than doubled in value in the four years we’ve been here. I’d say the same thing about the home I owned in Alice Springs. I bought that for $78,000 fully furnished and sold it 10 years later for $200,000. The difference being that this one has doubled in value in only four years.

Why real estate property?

I was working with the bank and I could see other people making real estate property work for them. At the time there were a lot of programs on TV about property investment too. They had a lot of millionaire experts talking about making money from real estate property and that really opened our eyes. I’m not the sort of person who likes to put all of my money into super. Now when I retire I can either cash in and use the funds from my real estate properties, or have them paid off and collect the rent from them. It’s a forced way of saving.

For more Australia real estate and pre-construction condos including waterfront and lakefront homes, please click here.

The Benefits of Buying New Real Estate?

By Jody Overend for the New Home Buyers Guide, February 02 – 16th, 2007.

Ah, the well-polished floor. The funky tiles in the bathroom. The old-fashioned kitchen just like the one you remember from childhood. Most of us are at one time or another drawn to the idea of buying an older home.

So why choose a brand new home instead? The answer is in the question. Everything is new. New ideas. New designs. Newly discovered materials. The most advanced technology in electrical, heating, cooling and communication systems to name a few.

“And not only is everything new,” points out Cheryl Guenther, Sales Manager for Whispering Ridge, “it’s guaranteed under your New Home Warranty. The exterior, the interior, and everything inside are covered. Older real estate homes don’t’ come with guarantees. That can lea to unexpected expenses you haven’t budgeted for.”

She has a very good point. Although your certified home inspector has given your older home or real estate property a winning grade, unfortunately, it doesn’t mean it will always stay that way.

When you can least afford it, you may be stuck with unexpected and costly repairs and upgrades. Older appliances can give up the ghost out of the blue. Your bathroom can spring a leak. Your wiring may need replacing. And guess what. No home warranty to fall back on.

Another valid consideration is your lifestyle. Chances are you live a busy modern life. And like most of us, you have a motley collection of technological can’t live withouts – cell phones, high definition TVs, stereo equipment, computers, and what have you. And the support systems for all that technology? It’s not usually found in a ten-year old home or real estate properties unless it has been recently renovated. Another costly upgrade you weren’t expecting.

On the other hand, in a new home, all the must have gadgets and necessities have been planned for. Many new homes come with multi-room high speed internet connections already built in, as well as pre-wiring for an alarm system and air conditioning.

And be honest. Wouldn’t you love to have the latest in stainless steel appliances, marble countertops, easy care hardwood, and a fireplace you turn on with a flick of a switch?

Not to mention you can see your new home and real estate property being built form the ground up. You know what’s between the walls and who put it there. You can see with your own eyes the craftsmanship and attention to detail that your real estate builder is providing you.

And don’t worry about being stuck with “one size fits all.” In most new real estate housing developments there’s a wide variety of options and upgrades to choose from to personalize your home and property just the way you want it, inside and out. From tiles to exterior trims, cabinetry to countertops. Be sure to ask.

One last thing. If you have a young family or are thinking of starting one, the neighbourhood you choose is critical. New subdivisions are carefully designed to incorporate schools, shopping and medical centres, safe bike paths and playgrounds. From pre-school years through high-school, the needs of both the children and adults are thoughtfully provided for.

An older home or property real estate with a big front porch? A thirtieth floor loft with floor-to-ceiling windows? A single family home in a brand new subdivision? There is no right home for everyone. There is only the right home for you.

Sources include Canadian Home Builders’ Association web site.

Assessing the Capital Growth of your Real Estate Investment

Written by Monique Wakelin for the ‘Take Control: How Home Equity puts you in the driver’s seat’ article published in API magazine – December 2006 issue and this features the third part of this useful article.

Investors often ask how to measure the growth in the equity they control and how to access the capital growth achieved. Firstly, find out how much your property is worth on today’s real estate market, and you can calculate the increase on the original purchase price.

A simple model is to look at a real estate property purchased for $200,000 that’s now worth $240,000. The property investment has had a capital gain of $40,000 or 20 per cent.

Another method is to establish the rate of return on equity or the percentage by which your home equity has increased beyond the cash amount that was initially put into the property real estate investment. In the case of the $200,000 property there would have been a 10 per cent deposit of $20,000. If the property shows capital growth of 10 per cent in the first year, then there’s a $20,000 return on that equity or 100 per cent. This real estate capital growth will compound in subsequent years as seen in the following table at the end of this part of the article.

To suggest this specific level of home equity growth will happen every year is unrealistic. This is where the long-term view comes into play because of the wide range of factors that we know are going to affect real estate property. These are the “real life” situations ranging from rising interest rates to general national and state based economic conditions to changes in rental levels. Property real estate moves in cycles with periods of upturn and downturn and more stable, even price flows. Focused and disciplined investors in real estate pay little attention to the “bad news” and realise that their investment in real estate will increase exponentially as future property cycles move through upturn phases. Time evens out the highs and lows – as long as you get your asset selection right.

First time real estate home investors need to realise the first year or two of holding property will be the most challenging. It requires the mindset that there will be “glitches” until they see the pattern beginning to emerge. At this stage, they should also be exploring the options that provide some buffers against occurrences such as interest rate rises. For example, fixing all or part of their loan when rates are low can be a good insurance policy.

Return on Equity in home investments
This table outlines the return of an investment property purchased for $200,000 with an initial deposit of $20,000 and showing average compound annual growth of 10 per cent.

Year Capital Value Return(s) Return on Initial Equity (%)
Year 1 $220,000 $20,000 100%
Year 2 $242,000 $42,000 210%
Year 3 $266,200 $66,200 331%
Year 4 $292,820 $92,820 464%
Year 5 $322,102 $122,102 611%
Year 7 $389,743 $189,743 949%
Year 10 $518,748 $318,748 1,594%
Year 15 $835,449 $635,449 3,177%
Year 20 $1,345,498 $1,145,498 5,727%

For some more real estate resources on pre-construction condos and Whistler real estate and condo developments, click here.

Preparing your condo or real estate property for an earthquake and other condominium apartment tips

Originally published in the January 19 – February 02, 2007 Home Renters Guide in Vancouver, Canada by www.homebase.ca.

You can’t prevent an earthquake, but you can be prepared to avoid injury and be prepared to minimize the damage to your home. Go through your home, imagining what could happen to each part of it if it were shaken violently. For those living in a condo or apartment building, you may experience more sway and less vibration than in a single-storey building.

Work with your building or strata corporation manager to help quake-proof your home. Seek advice from professionals (insurance, engineers, and architects) if you are unsure what to do.

Previous earthquakes have proven that these items need attention:

- Tie down your water heater and other appliances that could break gas or water lines if they topple
- Secure top-heavy furniture like shelving units and armoires to prevent tipping. Keep heavy items on lower shelves.
- Fix mirrors and other hanging objects so they won’t fall off hooks.
- Located beds away from chimneys, windows, heavy pictures etc. Closed curtains will help keep broken window glass off nearby occupied beds.
- Put anti-skid pads (eg. Velcro) under TVs, VCRs, computers, and small appliances.
- Store valuable documents and special small keep sakes in a fire-resistant place.
- Keep sturdy shoes and outdoor clothing handy.
- Use child-proof or safety latches on cupboards to stop contents from spilling out.

Real Estate Apartment Safety

1. Never leave your apartment real estate property door unlocked, even while taking out the trash. You may find someone waiting inside when you get back!

2. If required to give the super-intendent a key to your real estate apartment or condo for emergency use, seal it in an envelope and sign your name across the flap with your signature overlapping onto the body of the envelope. This will deter against tampering. Periodically ask to see the envelope.

3. Make an effort to meet your neighbours. Learn to look out for each other’s interests. Know who “belongs.”

4. Don’t get on an elevator with a stranger. In an elevator, stand beside the control panel to have direct access to the alarm button.

5. Never isolate yourself in a basement laundry room. If possible, arrange to do laundry with a neighbour.

6. Never open your door to a stranger. Utility company employees can slip their IDs under the door. If in doubt, look up the company, telephone number yourself (don’t rely on a number they give you), and call to verify the information.

7. Do not prop outside doors open for any reason. If you find one propped open, close and secure it.

8. Use only your first initial on your doorbell and mailbox, and in the phone book for your real estate apartment address.

9. Immediately report any real estate building security problems to the super-intendent. Follow up to be sure the problem is corrected.

10. When your real estate apartment is unoccupied for a long period of time, leave a radio or television playing to give the impression that somebody is home.

Important tips for apartment condo finding

1. Get yourself in a gung-ho apartment condominium search frame of mind. You will be making dozens of phone calls and leaving many messages. If your messages aren’t returned the next day, you should call again, of course doing so with the utmost tact. If you don’t have a local phone number, get one. Apartment condos unlimited rents out very inexpensive voice mail boxes.

2. Keep your chequebook with you. When you see an apartment condo which looks good to you, you are going to have to decide and act upon it quickly. Good places do not stay on the real estate market long! People constantly lose good places due to indecision.

3. Collect all of your rental information before you visit your first vacancy.

4. Have a credit report with you and give yourself an edge over the next guy. Landlords will be impressed by your organization and preparedness. As well, you’ll save money by not having to shell out for each and every landlord who requires one.

5. Dress and groom as though you are going to a job interview. In many respects it is the same. Landlords for apartment condominiums of really good condo units usually have to pick of several applicants. They are looking for:

- Someone both able and responsible enough to pay rent on time.
- People who will treat them and their real estate property with care and respect.
- Quiet tenants who will not be disturbing to other tenants and neighbours.

6. Always keep your appointments and always show up on time. No-shows are a major source of frustration for building managers and condo landlords.

7. Don’t get discouraged! Finding a great real estate condominium apartment is not easy, but it is well worth the effort. Keep your chin up, get back on the phone and remember to always sound cheerful!

This is courtesy of www.homestore.com.

It’s time to pack up for your first apartment condo.

Here’s a helpful list of 10+ items to pack last and keep handy when you move to your new condo home … they’re things you’ll need to get to first and frequently.

1. Extension cords, batteries. Everything’s electric these days it seems. Computers, CD players, your Walkman, all those little gizmos you just can’t seem to live without. So it just makes sense to keep that extension cord or pack of new batteries right on top and within easy reach.

2. Tools. We’re talking hammers and screwdrivers, nails and screws, scotch tape, duct tape and especially, a tape measure.

3. A bottle opener and glasses. Thirst always seems to come first, particularly if you have to lug that stuff by yourself. Dehydration is a sneaky beast, so be prepared.

4. Snack, pizza and fast food coupons. You’re going to work up a hunger so think about treating yourself to a quick bite or a night out at Mickey D’s.

5. Address book or PDA. Keep those important telephone numbers handy.

6. Cell phone or regular telephone with plug – put these within easy reach. There’s always potential for an emergency.

7. Sufficient cash. Duh … but if you’re opening a new bank account you may have to wait for your first cheque to clear. Traveler’s cheques wouldn’t hurt either.

8. A copy of your real estate lease and personal ID such as a driver’s license. A speaking of banking, if you’re starting a new chequing account (or applying for utilities service) you’ll need proof of your new address too.

9. Cleaning materials. Especially paper towers – accidents do happen.

10. Light bulbs, a small lamp (perhaps a flashlight). It may be dark when you finally move in.

11. Alarm clock. You don’t want to miss your first day at school, right?

12. Box cutter. Don’t pack this puppy at all! It’s the first thing you’ll need to open your packages.

You can visit the following condo websites for more information about US and Canadian condo real estate development properties that are either under construction or during the planning and design stage.