A-Grade properties are always top of the class!

A recent Vendor Advocacy property we had listed for auction is a good reminder to potential buyers about the need to ensure the property they buy has strong fundamentals or is what we call an A-Grade property.

The auction was days away when the Government re-introduced the public auction ban as part of stage three Covid-19 restrictions. 

The pre-auction campaign had been going for three weeks before the final inspections changed to “by appointment only”. 

What were the Vendor’s choices?

1. Cancel the auction — as did around 200 vendors that weekend

2. Go to an online auction 

3. Start an Expression of Interest campaign

4. List as a private sale

The property was above average for the precinct and had many desirable attributes:

  • Width at eight metres – 5 meters is the norm
  • Above-average accommodation
  • Flexible and well laid out floor-plan
  • Good street presence
  • Just 3.5 km from the CBD
  • Close to the South Melbourne Market and Clarendon Street shops
  • A nearby park, and recreational amenities
  • Public transport close by

The property to this point had enjoyed a solid advertising campaign, and there were potentially three interested parties. 

In consultation with the selling agent and the Vendor, we all agreed to stay brave and continue with an online auction. The selling agent came up with a good idea of getting all the interested bidders through the property (as per the COVID-19 guidelines) before the online auction – which helped to keep them emotionally engaged and more accessible for the contract sign-up.

The result?

Combine an A-grade property with an accomplished selling agent who was able to convince potential buyers that the process can be trusted and strong results are possible – with the property selling above the reserve.

Sticking to the plan of purchasing an A-grade in property may protect you when markets become uncertain.

To give yourself the best opportunity of having a property that can weather the storm, contact us. ela Property Advocates Guy Angwin 0412 022 998 or Geoff Briscoe 0419 740 351

Will you have to pay CGT when you sell your property?

CGT is a tax levied on the profits you make when you dispose of an asset that has bee purchased on or after 20 September 1985. Any gain made on the sale of a CGT asset is included in your assessable income in the financial year that you sell the asset. For property, the CGT calculation starts from the contract date, not the settlement.

The CGT calculation involves taking the cost involved in acquiring and holding an asset from the proceeds of the asset sale. When you’re selling a home, any profit you make above the cost of buying and maintaining the home is considered a capital gain.

When are you exempt from CGT?

In some cases, there is no CGT depending on your circumstances:

  • If the property purchase was before 20 September 1985 or
  • If it’s your primary place of residence

The ATO doesn’t give an accurate description of what constitutes the primary residence, but gives the following points to consider:

  • You and your family live in the dwelling.
  • Your mail is delivered there.
  • You have your personal belongings there.
  • You’re registered to vote at the property’s address.
  • You have connected a phone, gas and electricity to the property.

If you’ve lived in your home for the whole time and haven’t rented it out either entirely or to a lodger and the land is smaller than two hectares, you’ll get a full exemption on CGT when you sell, according to the ATO website. If you are a renovator and selling profits made from the renovation may be exempt from CGT.

When is CGT levied?

If you’re selling an investment property, its likely CGT is payable, and this is calculated based on the sale price of a property minus your expenses. It’s quite detailed – you should seek expert advice from your tax advisor on what constitutes cost base as its a long list of items you can claim.

There are several calculation methods where a CGT levy applies, but the one people are most familiar with is the Discount method.  

The Discount method is for those holding assets for more than 12 months which is more common for property. You may be entitled to a 50% discount off of the CGT liability for individuals or a 33.3% discount off of the CGT liability for super funds if you use this method.

As always consult your tax advisor before making property decisions that may have tax implications. And do look at the ATO website CGT section which is most comprehensive.

For property advice call us at ela Property Advocates Guy Angwin 0412 022998 or Geoff Briscoe 0419 740 351

Granny Flats/Studios do they add value?

If you are looking for a property with a Granny Flat/Studio retreat there are many practical uses:

  • Grandparent or Aupair lodgings
  • Teenagers
  • Adult children lodgings
  • Home business office
  • Art or craft studio retreat
  • Short stay for family, friends and visitors

However, is this structure the best set-up? 

What level of supervision will you want for the younger members/teenagers of your family? Do you want them close by or out of sight? Whether it’s for health reasons, excessive computer usage, what they are consuming or the company they keep, it may be a better solution to integrate your teenagers into a carefully thought out flexible floor-plan extension to an existing house.

Kaine Lanyon, Director Marshall White Port Phillip says “Granny flats are great and can add value as long on the structure hasn’t compromised the back yard/courtyard amenity. It might work better as an addition to an existing house as long as the block is long enough, building not too much bulk with good floor-plan space. Getting that extra bedroom if well done certainly adds value.”

In summary, granny flats/studios do have an appeal and add value. Still, if you are a family home buyer, a flexible, modern floor-plan on the right sized land may also be an option. 

Call us for advice, ela Property Advocates Guy Angwin 0412 22 998 or Geoff Briscoe 0419 740 351.

Will Covid-19 change commuting attitudes, home ownership and property investment?

Many peoples attitudes have changed dramatically — maybe forever. Working from home and evaluating just how many days you need to be in the office, or even doing that Zoom meeting instead of the sometimes exciting but often arduous interstate trip!

We have talked to many clients who have loved the extra time at home with the family and the flexibility of not having to “dress up and commute” to the city office.

Our opinion is that more and more people will decide to commute to the city office on fewer days and maybe take on a Regional Victorian property to improve their lifestyle and get more for their housing dollar. Regional investment may now give you more options at an affordable price point compared to the same old city choices of a landless flat or apartment that have historically performed below land-based investments. 

Imagine a big family home in Ballarat on 600+m2 land circa $600,000, and you get that commute to Melbourne down to 2 days per week. You could be on that Ballarat train 6:46 in the morning and arrive Melbourne 1 hour 15 minutes later 8:01 AM!

You could achieve a Country lifestyle for the family, affordable housing, excellent schools, good medical and sporting facilities and more time with the family.

If this appeals to you and you think a move to Regional Victoria is the post Covid-19 lifestyle for you call us for advice, ela Property Advocates Guy Angwin 0412 22 998 or Geoff Briscoe 0419 740 351.

We don’t always get it right…..

Recently we were working with a client in preparing their property for sale in Port Phillip, and during this process, there were numerous discussions around the pros and cons of doing work to the property. Generally, we take the view that the work carried must return a premium on the selling price.

Our client, in this case, was keen to have the floors sanded as wear and tear and some minor damage under a floor runner affected the properties appearance. Our advice (and that of the selling agent) was it wasn’t necessary as buyers wouldn’t see the condition of the floor as a deal-breaker to buying the home.

Despite our advice, the client went ahead and had the floors sanded and resurface. To everyone’s surprise, the dark floorboards were now light coloured and in a property that faces south the improvement to the natural light (see photos above) was just incredible.

As Vendor Advocates, we need to careful in advising clients around where to spend their money when preparing their properties for sale, and not everything is evident on the surface.

If you are buying or selling a property, call us for advice, ela Property Advocates Guy Angwin 0412 22 998 or Geoff Briscoe 0419 740 351.

Do you REALLY want a pool?……..

Do you REALLY want a pool?……..
When we search for properties for our clients, we sometimes find the right property…BUT it has a pool. Pools are a conundrum for prospective buyers, so let’s put that in perspective and give you the facts as we see them.

Only a small percentage of buyers want a pool, around 10% according to David Sciola at Jellis Craig Armadale. And that will be mainly for families with kids 8-16 years old.

After that age pools become less of a focus and not used nearly as much. According to David pools don’t add any value to a property – they may end up being a liability to a buyer and prevent a sale.

So if you’re thinking about adding a pool or thinking you will get some use out of it and it will add value when you sell – think again, it may not! If you’re buying a property, unless you envisage a significant family usage, there is little value add according to David.

In summary, pools are terrific if you use them, but according to the experts, a pool may not add value to your property.

If you are buying or selling a property, call us for advice, ela Property Advocates Guy Angwin 0412 22 998 or Geoff Briscoe 0419 740 351.

Tax Obligations when Buying Property.

What a minefield land tax is, heres a few examples that may apply to you.

Example 1
A client left Australia to work and leased their principal place of residence with a market value of around $2.5 million and after three years received a Land tax bill for the past three years! Ouch, that hurt!

Example 2
We recently purchased a property for a client. The property is currently an investment property. As part of our due diligence and the skill of a very good property conveyancer, we saved our client around $3,000 in land tax.

Land tax covers a calendar year and if you buy a property class that has unpaid land tax after you settle you may have a Land Tax liability!

Example 3
If you are a seller and buyer at the same time, it’s also advantageous to keep the two settlement dates as close as possible because you MAY receive a Land Tax assessment for the time you own two properties!

The State Revenue Office has a Land Tax Calculator. An example using the calculator of $1.5 million Site Value shows nearly $7,000 Land Tax.

For any questions of a general property nature call ela Property Advocates Guy Angwin 0412 22 998 or Geoff Briscoe 0419 740 351. Legal advice from a specialist property conveyancer/solicitor is essential!

A Story About Due Diligence……

Carrying out significant Due Diligence to many is tedious and often considered a waste of money, but we say “you must pay attention to this”.

Recently a buyer purchased a beautiful heritage warehouse apartment built circa 1900 located on the ground floor.

As with all buildings no matter what the age we strongly recommend to our clients to book Pest and Building Inspection. The cost of the services vary but can start as low as $650. Strange that many would get the RACV to inspect a second-hand car but not your dream property?

Pest and building inspections cover essential things like :
-Structural defects
-Maintenance problems
-Water damage like rising damp.
-An infestation of pests, e.g. termites
-A foundation report and much more

The buyer in question (not one of our clients!) decided they had enough experience to do their inspection.

Once settled, the renovations started. The first job was removing all the carpet only to reveal significant water damage to the floor and walls. Now the arguments are in full flight with the body corporate over who pays.

So everyone, do your Pest and Building Inspection!

Call us at ela Property Advocates if you have any questions: Guy Angwin 0412 022 998 or Geoff Briscoe 0419 740 351

Auctions Away ……..

Auctions are back! Yes, there are some restrictions but nothing an agent cant handle.

Auctions are limited to ten people (plus agency staff and owners or residents), and after speaking with the team at Kay and Burton Armadale, the only foreseeable problem is ensuring public attendance does not exceed the legal limit. A big turnout of spectators will not help the industry to control the Coronavirus spread.

So you may see an auction date advertised but no time to prevent people from just showing up and exceeding the legal number of attendees.

Agents will have to heavily qualify prospective buyers before they “invite” anyone to the auction. So don’t be offended by intrusive questions like:

Are you ready to buy NOW?

Do you have your finance in place, with approval in writing if you are borrowing?

Do you have your deposit ready for auction day?

Is this price range in your budget?

If the answer is YES, the agent will reveal all the details to join the auction with up to ten other interested parties.

So while you won’t see a big crowd on a sunny day, you can be reasonably sure that those present are probably there to transact.

Need some buying or bidding advice? Call us at ela Property Advocates. Guy Angwin 0412 022 998 OR Geoff Briscoe 0419740351

What will Melbourne look like in 2050?

What will Melbourne look like in 2050?

Hi everyone.

With all the talk of what the market will do and government COVID 19 actions, we thought this week we would digress. While doing some research for a client, we discovered this concise vision for Melbourne 2050 – Population 8 million!

Ok yes, is published by the Victorian State Government, but it’s a terrific summary, informative and even non-political. It’s an easy read and well worth it!

Read how Melbourne will retain its Worlds Most Liveable City status.

Great to hear your thoughts……