Independent Property Group Managing Director of Property Management Hannah Gill

High Prices and Low Supply Leaves Canberra’s Rental Market Feeling the Heat in 2019.

The Australian property market is a topic on par with the scorching summer days our country has been enduring — it’s hot.  The Canberra rental market, in particular, has had a spotlight shone on it. It’s now regarded as having the highest weekly asking rents nationwide. According to the Domain Rental Report for the December quarter, the median weekly asking rent for houses in the capital jumped to an average of $560 per week, in comparison to $540 in Sydney.

So, what does it all mean for local investors and tenants? We speak to Hannah Gill, Managing Director of Independent Property Management, to find out why Canberra is experiencing an exceptionally tight marketplace. Continue reading

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I COULDN’T AFFORD A HOME…THEN I SAW A MORTGAGE BROKER.

Here at Perspective, we don’t usually hand over the reins to a single author, but we felt Andrew’s first step to home ownership would be better off coming from the horse’s mouth. You see, with a bit of prodding, Andrew visited a mortgage broker last week. And this was his experience:


My name’s Andrew. I’m 25 years old, married to my high school sweetheart and finally finding my feet in the full-time workforce, having dabbled in numerous ventures both here and overseas since my early 20s.

I’ll be straight up with you…I’m not really a “money” guy. In fact, my money-managing is generally so poor that it’s not uncommon for me to stray dangerously close to an aneurysm when paying by card, so frequent are the “Declined – see bank issuer” messages.

I’ve worked as a tailor, a barista, an industrial cleaner, a construction-hand and a funeral musician. Securing full-time work, though, meant for me that I was no longer a financial burden on my wife, Rose, and the pennies started to tick over in a more consistent manner than it did when I was waiting by the phone for news of another funeral.

Although we were starting to put away more and more money, I still associated buying a house with something only “adults” did. As someone who regularly wears odd socks, forgets to take money to the supermarket and has been known to drive to the airport sans-passport, one could surmise that I struggled with this thing called “adulting”.

That perception changed when Rose and I attended an information night hosted by Independent Property Management, where Mark Edlund from Clarity Financial Group gave a presentation on buying your first home.

I’d always associated mortgage brokers with dodgy back-door deals; I perceived them as sharks who fed on those in crippling debt to a bank for their own benefit. The actual role of a mortgage broker, though, is in stark contrast to what we’re often fed on the big screen.

As we sat at the back of the 80-strong audience in attendance, we did the sums and crunched some figures on the spot, discovering that we were potentially already in a position to get our foot into the property market. To give you an idea of the sort of numbers we were contemplating, check out this article on how big a deposit you really need to purchase a home. The next step, according to Mark’s presentation, was to go and see a mortgage broker, and seeing as the meeting was obligation-free and more importantly, free, we booked an appointment.

Before our appointment, I received a call from our broker, Nitish Kumar, who required some preliminary information before we met. I laid down each of our salaries and contract types, our savings, our current rental repayments and our property goals. Nitish then emailed me a selection of documents, including a Client Information Form to complete and return with our financial and personal details, a Credit Guide outlining exactly what would be involved in taking out a loan and a Document Checklist with what we needed to bring.

We walked into the Clarity office about 10 minutes prior to our booked appointment time, and needless to say, we felt pretty out of place. The office fit-out was incredibly sleek and adult-y, and neither Rose nor I could shake the feeling, “What the hell are we actually doing here?”

Nitish walked straight up to us, and I was instantly impressed by his no-fluff, direct approach to his work. In his opening spiel, he took us through exactly what the role of a mortgage broker was, which up until that point, was something that still eluded Rose and me. The key takeaways from this introduction were that:

  1. We would never pay Nitish a cent for his services;
  2. He got paid the same amount regardless of which bank/mortgage we chose – there was no reason for him to promote one over another;
  3. He could negotiate discounts on interest rates with nearly any lender we chose; and
  4. Clarity has over a 99% chance of getting your loan application approved, simply because they won’t apply if they think there’s even a chance it’ll be rejected.

It’s important at this stage that you understand the role of a mortgage broker. To apply for a home loan, you can either go directly to the bank or go to a mortgage broker. At the bank, you’ll probably be missing some of the necessary documentation, you won’t have access to special discounts and the bank doesn’t care whether you’re successful in your application.

A mortgage broker only gets paid once you’re successful in applying for a loan, so they have a vested interest in your successful application. The benefits to this setup are two-fold: they won’t even apply to the bank if you’re in any doubt of securing a loan, and they have access to better discounted interest rates, saving you heaps on repayments over a 30-year period.

With a mortgage broker, you’re still borrowing money from the bank, but the entire application process is performed by the mortgage broker on your behalf. Essentially, from a borrower’s perspective, a mortgage broker provides a free service and has a higher chance of securing a better loan at a lower interest rate…sounded like a pretty simple choice to us.

Once Nitish got to crunching the numbers, there were a lot of terms that we’d never heard of before, like L.M.I., L.V.R., split loans, variable loans…pretty much any mortgage-related term he said if I’m being honest. After all, we were in the absolute preliminary stages of our house-hunt, so we weren’t too fussed about being all over every financial concept instantly.

Originally hailing from Melbourne, both Rose and I had toyed with the idea of purchasing down there, so we could move straight into our own place when we eventually returned to our home city. Nitish quickly calculated that, factoring in the increased stamp duty for an investment property rather than an owner-occupied property, we’d need around an extra $27,000 to pump into the deposit, as the stamp duty for an investment property is non-deferrable in Victoria. So instead of a deferred stamp duty payment of ~$13,000, we’d be looking at an upfront cost of ~$27,000…our decision to NOT purchase in Melbourne had been made for us.

When asked what sort of price range we’d been looking in, neither Rose nor I had any meaningful concept of what we could afford, and Nitish got to doing the sums. From the paperwork we’d already completed and knowing our monthly living expenses, Nitish could easily calculate our borrowing capacity and repayment capability and told us that we were ready then and there to purchase anything up to around $500,000 quite comfortably.

Well that did it. If we weren’t freaking out enough already, that was the straw that broke the camel’s back. We both went bright red and our stomachs simultaneously backflipped on themselves, and when the slight nausea and shock finally subsided, the meeting was over. We’d just been coolly told we could make an offer on any house up to $500,000 with no qualms whatsoever, and the resulting emotional concoction was a potent mixture of palpable excitement, overwhelming nerves and a steely determination to stop paying rent.

We had seriously thought we were years away from buying a home. It was a dream for another time and would have stayed a dream if we hadn’t made that first, free, baby step towards home ownership – visiting a mortgage broker. Now the dream is a plan. Watch this space.

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PROPERTY TIPS TO HELP WITH YOUR (Not so New) NEW YEAR’S RESOLUTIONS

A big welcome to 2019 from the team at Independent Property Group.

Like many of you, we had a whole suite of resolutions planned for this year. In fact, some of us may have gone overboard. Unfortunately the statistics don’t look good. Research from Strava, the athletes’ social networking tool, pinpoints the fateful day we all lose it – 12 January.

But we won’t let that dissuade us because we are now into February and feeling that all hope is lost. According to people with more experience in numerology than us, 2019 is a year of creativity, optimism, and inspiration.

So on that note, and because we’re your biggest fans, we’ve giving you some help in achieving some of what Time Magazine says are the Top 10 Most Commonly Broken New Year’s Resolutions. And when we say some, we mean seven because hey, we’re property professionals, not life coaches.

#1. Lose Weight and Get Fit

Last year, we at Independent got on the yoga bandwagon. It was a work initiative—they subsidised yoga classes wagering that a fit and de-stressed workforce would be more productive and take fewer sick days. Some of us, after the initial few weeks of moans and groans, got hooked, and one has taken it to a new level of commitment, with plans underway to designate a room in her new house to create her own ‘space.’

The Journey Junkie has a fantastic article on how to create a home yoga space.

Our best tips:

  • Keep it light and uncluttered so you feel good when you walk in
  • Keep it set up so there’s less to do to start your session, so fewer roadblocks to stop you
  • Put something motivational on the wall to focus on when it gets hard

For those after a more traditional gym, this Art of Manliness how-to article goes into great depth on converting your garage.

But seriously, setting up your home environment to support your goals is a major step towards achieving them.

#2. Learn Something New

Want to learn what it actually takes to get into the market? Or how you can invest with no out-of-pocket expense? Or have you been wondering what goes into selling a house that’s been the scene of a crime… From design tips to financial advice, the team at Independent Property Group is an absolute fountain of new and interesting information. Dive deeper into our Perspective blog to find out more.

 

#3 Get Out of Debt and Save Money

Mark Edlund, Managing Director of Clarity Financial Group, drops in every now and then to dispense some sage words of wisdom. The best pieces of advice we can give for managing your money are three-fold:

  1. Start tracking every cent. Seriously, keep your receipts or go through your bank statement and work out where your money goes. You’d be horrified to realise just how much you spend on magazines…(no, no personal experience there at all).
  2. Have a goal. Maybe it’s to get out of debt (Mark also chats about how financially you may be better off maintaining your debt and getting together a deposit) or maybe it’s to save for a home. People will tell you to make small, manageable goals that you are more likely to achieve. You’d be surprised at just how little you need to get in to the market, far less than recent news articles say.
  3. Those that own their own home should probably look into property investment. The excellent thing is, depending on your circumstances, you may be able to get into the investment market with no out-of-pocket expense.

#4 Travel to New Places

Depending on where you want to go, the biggest cost of a holiday is not the flights, which if you are diligent in sale shopping you can get a great deal, but the accommodation. This is why AirBnB has had such a huge impact on the way we travel. But there’s another option that’s even cheaper—house swapping. Now we can’t guarantee that you’re going to swap into a Beverly Hills mansion, or that Jude Law is going to end up crashing on your sofa (and if you don’t get that reference, you really must watch this movie), but there are plenty of people who’ve experienced success swapping their houses for another in a different part of the world. You sometimes get use of the family car and you get to live like a local for no accommodation fee at all. Be warned though, whenever you are engaging in short term leases, there are things to consider. Our Perspective Magazine spoke about the dangers of AirBnB on their blog a while ago. The upside to house swapping is that the other party is also making themselves vulnerable and trusting, unlike AirBnB guests that don’t face the same risk. Also, the vast majority of house swappers are homeowners, making them somewhat older and a little less likely to throw raving parties. Share Travellers has some great tips on choosing a house swap website.

#5. Be Less Stressed
We’re going to approach this goal from a design point-of-view. Mainly because The Jungalow recently popped up on our Instagram feed and we’re far too impatient to wait until our next interior design post to show off their awesomeness.

Serious, scientific studies have proved that indoor plants reduce stress and anxiety. If that’s not reason enough to invest in this particular line of decoration, I don’t know what is. Keeping them alive can be a struggle for some of us though, so here is our handy how-to guide.

Starting with the ‘duh’ statement. Plants need light. Put them near a window, ideally a northing-facing one so they get the maximum amount of sun at its maximum intensity. The tag on the plant when you buy it will give you more of an idea. Beware though, if you move a struggling plant from a dark spot to a very light one, the few leaves that have managed to develop may burn at first.

Not so much of a ‘duh’ statement – plants also need dark. It’s during the blackness that photosynthesis stops and respiration occurs.

Water. How much does is actually need? All plants are different and more than one of us has offed a cactus through too much TLC. A good rule of thumb if you don’t know the name of your plant is to stick your finger in the first 2-3 centimetres of soil. If it’s completely dry, it’s time to water.  If your finger gets some moisture on it, you’re good for a couple of days. When you do water, make sure the soil is fully saturated. It’s best to Google the plant species for more details.

Drainage. This is where most of us office plant lovers go wrong. Repeatedly. The drainage holes at the bottom of the pot are not enough. You need to add rocks or other drainage material at the bottom of the pot so it’s not soaking in water. Alternatively, 30 minutes after watering your plant tip any water in saucer into the sink. Roots will rot if they’re constantly wet (kind of the same way stems in flower vase will disintegrate if left in water). That genius move of keeping the saucer full of water so you don’t have to remember to water as often? Not so genius.

#6 Volunteer/Give to Charity

A while ago we ran a story on Lee Leary, who recently purchased his first home through Project Independence, a not-for-profit organisation that helps the mentally disabled purchase their own home in the Project Independence development. You can support them by visiting their website.


#7 Drink Less

This piece of resolution-saving advice is tenuously linked, we admit… Drink less by upping the quality of what you do drink. Bear with us for a second.

Studies show that Australians, Americans and the French are all spending more on alcohol than before, but are actually consuming less. This trend is led by the explosion in craft beer, but is also expressed in the increased sales of premium wines.

How does this relate to property?

If you’re opting for quality, you want that to be reflected in the entire experience, not just the drink itself. That’s why bars invest fortunes in interior design. Here at Independent Property Group, we believe strongly in beautiful, functional homes—and a good DIY project.

So, after thoroughly justifying our choice to help you drink less by building your own stylish drinks cart, here is our favourite project turning cheap IKEA shelving into something that will have you lounging back, sipping slowly, and admiring the finer things in life.

Style Me Pretty: Modern bar cart with backing art

 

 

Until next time, good luck!

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HOW TO COME FIRST IN THE SEARCH FOR A RENTAL PROPERTY.

With more and more people moving to our leafy city after realising how great it really is, the property market has been tight. And according to the Domain Rental Report for the December quarter, Canberra is now the most expensive capital city to rent, surpassing Sydney for the first time in 11 years. Back in December 2013, the average rent for a house in the Canberra region was $430 per week. Fast forward to December 2018, the median weekly house rent was $560.

This time of the year there is traditionally an increase in demand for rental properties as a new wave of students and professionals move to the capital. Independent Property Management has already begun to see a large number of enquiries from potential tenants who are on the hunt for new rental accommodation.

Currently, our vacancy rate is at 0.41%. But what does this mean exactly? A vacancy rate is the percentage of rental properties out there that are vacant or empty.

So with all this competition in the air, you want to stand above everyone else and give yourself the best opportunity to secure a new home. We spoke to Property Manager Renee Bink, to find out how you can improve your chances of securing a new place. Continue reading

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Last minute Christmas gifts for the home

Tis the season of giving. But before you reach for that good old bottle of vino, box of handcrafted premium chocolate or velvety hand cream, consider a present that lasts all year long – and perhaps beyond.

The best gifts are the one’s that keep on giving – welcome additions that serve a purpose and become a much-loved practical part of the home.

With only a week to go before Christmas, these gifts will help you complete your holiday shopping without a fuss and be sure to delight the house-proud.

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