Mortgage and Home Buying Information

Everyone needs a property of their own at some point. While some people are happy to rent a place for the rest of their lives, most need to have a place to call their own home. A mortgage has not been easy to obtain since the recession, and this is why many people are looking for some home buying tips.

Buying a house is a major decision and at times a lifetime commitment; hence every potential buyer should take care and understand the basics and criteria so that they do not end up with an unmanageable debt on their hands. Here are some useful hints that you should bear in mind when considering to purchase your own property in the United States.

Be prepared for any obstacles that may get thrown in your way. You need to ensure that your finances are up to buying and owning a property and you should be aware of how costly a mortgage can be for you and your family.

Take your time in choosing a house and choose carefully. The size, cost and the location are all very important factors to consider and need to be assessed in good time.

Hire a professional realtor in order to assist you with the whole house buying process. While most people want to make decisions on their own and do not wish to pay a little extra for the help of professionals, it will not hurt to seek the help of a realtor who knows all about the market situation and can advise you about what you can afford.

Visit some home loan assistance sites or offices in your local area. These are federal and state run organizations and their aim is to try and help people with their basic financial needs. Home loan programs are useful for someone who is trying to buy their first property and just needs a little extra help.

Do not make sudden decisions, and buying a house will be one of the biggest decisions of your life so lots of thought, studies, research and analysis should go into it. If you find out that you cannot afford the down payment, there are many lenders who can help you. The minimum required is 3.5 percent and there are many Housing Finance organizations that can assist you with the down payment.

Insurance is very important after you have purchased your dream home. It is highly advisable to insure your property against all possible risks and the additional costs such as the monthly premium will be worth it, in case an unforeseen disaster occurs.

The above home buying tips are effective for anyone trying to buy a house in this country. But remember, if you are not open about your personal finances and commitments, you may be wasting your time as many lenders will look into your credit history to determine whether you can meet your mortgage payments. So you should take care and openly disclose your monthly credit payments on your application form to the lender, as this will save you time when you wait for approval.

6 Reasons Most Investors Never Get Rich In Property and How to Make Sure You Do!

I’ve helped hundreds of property investors over the years, and in that time I’ve discovered that successful investors do things in a certain way that helps them become rich. On the other hand the opposite can be said for the investors that haven’t completed the research required to get it right and they tend to struggle.

So let’s look at 6 simple reasons most investors will never get rich and how to make sure you do.

Reason 1 – Most people wait too long to start

Many investors are waiting for everything to be “perfect” before they get started. The right time in the cycle, the right property, the right environment etc, which means they never get going. The longer you wait, the longer it will be before you obtain the money, success and financial freedom you deserve.

It takes time to grow real wealth, especially if you are looking to use the power of duplication to it’s most effect. The timing may never seem to you like it is perfect, that’s why you just need to jump in and get started, because if you’re ready there will be a property out there ready as well.

Reason 2 – Fear stops many would be investors

Fear keeps many of us from getting what we want.

Be honest with yourself and count the number of times fear has prevented you from taking action and in the process, cost you possibly thousands of dollars through missed opportunities.

With property investment fear holds many investors back. Some fear taking on more debt, others fear failure and believe it or not, some even fear the success of becoming wealthier than friends and family.

Successful investors have often met someone who has explained to them that these fears are a natural part of investing and what they should do to handle it. Sometimes it’s understanding what you stand to lose if you don’t invest. For example, do you fear being stuck in your current job for the rest of your life, or retiring on a pension without enough money put aside to keep the lifestyle you’re used to?

Take the fear on, research your options and talk to someone who has been through it before.

There are many companies that claim to be able to make you rich overnight and try to convince you of this by cramming you into a big room with 200 other would-be investors, but this will probably just confuse you further. One on one advice that is specific to you is always the best option and that combined with a planned meeting with your accountant to get their opinion, will put you on the right road.

Once you’ve overcome the fear and experienced success on the other side, you usually look back and wonder why you were ever afraid in the first place.

Reason 3 – Some investors wait until they feel they know enough

The fear of not knowing enough prevents many investors from starting.

I have met hundreds of people where the more they learnt, the more they realised they didn’t know.

Once you start learning some basic investment concepts you suddenly realise there are a whole lot more things about investing that you don’t yet understand. The trap is that many investor’s think they now need to learn even more, so they read more books, go to more seminars, listen to CD’s and watch DVD’s. It just never stops!!

To be honest there aren’t too many people that do know it all so stick to your limit or knowledge and ask lots of questions along the way. Use a service like ours, watch, learn and lean on someone who has gone through this process many times before and when you feel comfortable, then you can do it on your own.

Reason 4 – Understanding short term pain for long term gain

It’s important to realise that at the start, you will probably need to give something up to be an investor. It could be that extra dinner out on the town or that nice bottle of red wine you drink during the week or a holiday every couple of years. What are you prepared to do now so that you don’t have to work tomorrow?

The way to become wealthy is creating a passive income whether you go to work or not. It’s also about building wealth while you sleep.

OK so let’s do a couple of quick basic sums to show what I mean;

If you borrowed $400,000 to buy your first investment property and put in 10% deposit plus the fees, you would need to borrow $360,000. Now let’s take an average interest rate of 7% on that money and you will pay around $484 per week. Then you’ll have rent coming in and that equates to say $400 per week. This means you will have to find around $84 per week. Now obviously there will be some tax deductions however, there will also be some extra costs, so let’s say they work out to be equal. Over the coming years the rent will slowly rise until the day that the property will look after itself and you can enjoy that bottle of wine again.

The other part of investing is that on average property prices in Adelaide have increased by around 8% over the last 80 years and there is no reason why this shouldn’t continue.

OK, so you bought that property for $400,000 and 8% of that will take the property to $432,000 after year one. Year two the value increases to $466,000, year three $503,000 and if the property kept increasing by 8% it would be worth $863,000 after 10 years of you purchasing the property. In the last year alone it increased by $65,000! That’s $178 in value your earning each night that year while you sleep! This is called passive income and this is what makes a property investor grow wealth.

That’s what happens to property investors. Initially they work long hours, save up a deposit and then invest it into a property. Then, their money starts working for them and keeps giving them sound investment returns “passively” in the form of capital growth and rental returns. Rather than getting another job, the wealthy people know they need to send their money out to work for them.

To put it simply: If you’re not making money while you sleep, the chances are you’ll never become rich.

Reason 5 – They don’t use systems for making money

A system for making money is something that takes the emotion out of your investment decisions.

My preferred system is investing in new areas that have high employment opportunities. Now I might get in trouble for this BUT I would prefer to invest in the North of Adelaide rather than the South as I believe that employment growth is far superior than the South.

I also rarely sell properties and instead I use the growing equity to buy more properties.

Once you create a proven system for making money, there is no limit to the money you can make. When I sit down with my clients, I lay out my system and explain it step by step.

Reason 6 – Not going all the way

To become a successful property investor requires a long term plan and importantly you must continue to monitor your property values and use that value to buy even more.

Remember back in point 4 were you were making $178 overnight while you slept, well imagine if you had bought 5 homes and made almost $900 every time you went to sleep. Now let’s move another 10 years forward’s and you would be making an amazing $378 per night with one property or if you bought 5 properties $1890 per night.

So, it’s not a get rich quick scheme, but you will get rich.

The problem for many investors is that they become impatient and they want to sell and look for the next best thing, but in most cases that just makes them a bad investor.

When you are tempted to do this, remind yourself that real estate has been the number one long-term multi-millionaire maker throughout Australia’s history.

And the last thing I will leave you with is this;

Many investors fail because they try and do it all themselves. They need to realise that even the experts talk to other experts. Most importantly, they don’t cram into a big function room, they talk one on one.

Successful investors build a great team around them and have mentors and like-minded people around them – they learn from people that have already achieved what they want to achieve.

So, you have a choice to make now. Will you sit around and do what you’ve done in the past, or will you take action today?

Learn How to Rent Out Your Property and Get Good Tenants

The best way to get good tenants is to start out with getting your property to the right standard and finish. Here are some things you may want to consider.

It is recommended landlords start with a clean canvas then combine quality fittings and appliances with furnishings (where needed) and decor. The idea is to let the prospective tenant see themselves in the property and feel it is their home.

Bathrooms and kitchens are very, if not the most important rooms in any property so make these a priority. When it comes to your bathroom, consider the lifestyle of your target market. Tenants generally expect white suites and, whilst busy professionals favour time-saving power showers, it can be a big mistake to take the bath out of a family home as the family bathroom should be a practical space everyone can use. The room should be clean, bright and functional.

Well-equipped kitchens attract professionals and families alike. Labour saving devices like washing machines are appealing to a wide range of tenants. It’s also well worth buying a quality oven and hob and paying close attention to the finish of your kitchen. Today’s tenants tend to look for reliable brand names – and the investment is usually more cost-effective for the landlord long-term.

Many tenants favour stripped wood flooring. If you are fortunate enough to have wooden floors in your property we recommend you expose them but if you don’t, consider carpets or good quality alternatives such as laminate flooring which are easily replaced if the floor is accidentally damaged.

Fundamentally, staging and presenting your property immaculately can save you money in the long-run as tenants tend to care for quality properties better than those requiring obvious repairs or maintenance. Tenants typically favour properties that are clean, neutrally decorated and bright so there’s much you can do to improve the appearance of your property without blowing the budget.

Don’t neglect outside space outside space is as important as the interior of your property. Many tenants choose one property over another simply because of the way outside space is presented. Decking and planters tend to appeal to modern young professionals whereas families usually seek a grassed play space, sturdy fencing and secure gates to protect young children from hazards. Investing in external lighting also helps by increasing security and appealing to tenants who like to dine alfresco. Take care with any extra features you may like to add in or already have such as uncovered ponds, thorny plants or broken gates or fencing. If you have outside space, gardening arrangements must be included in your tenancy agreement.
OK so now you got your property all ready to rent out so what do you do next?

You can do it yourself by this I mean advertise the property and show prospective tenants around. Once you have chosen a prospective tenant you will need to reference them. An inventory will need to be done on your property as well as taking meter readings.

When it comes to checking them in you will need to have agreements prepared as well as copies of all necessary certificates and a copy of the inventory for the tenant to verify. Once the agreement is signed and you get the first month’s rent and bond from them you then have to hand over the keys inform the utilities and register the bond.


You get an agent to do all of this and more for you as well as making sure your property stays legal. OK so you decide to go with an agent great! But what is that language they speak???

They start talking AST getting refs doing an EPC and getting a gas cert, what does this all mean??

So to translate, this agent has said she will prepare an ‘Assured Shorthold Tenancy Agreement’ (AST) and carry out ‘tenant referencing’ (refs). She will then organise the statutory gas and electrical safety tests and the ‘Energy Performance Certificate’ (EPC) which is required for all rental properties in England.

Letting a property needn’t be stressful. When using the right agent it should be painless and enjoyable. We are experts in lettings, we do not offer mortgage advice or sell houses. We concentrate on getting quality tenants and managing properties to a high standard.

Hopefully if you have followed all the above advice your tenant may wish extend their tenancy. If you and your tenant wish to extend a tenancy, you have two options, offer the tenant a new fixed term as an AST or let the tenancy continue on the same terms. There are significant differences between these two routes.

If both parties wish to amend the terms of the original agreement, for example agreeing to a rent increase, or change of occupier, then a new AST should be prepared. However, when this happens, a landlord can’t gain possession within the first six months of the new tenancy. If, on the other hand, you are all happy with the status quo then you simply do nothing and the original fixed term becomes what is known as a ‘Statutory Periodic Tenancy’ and continues on the same terms as before. The ‘Statutory Periodic Tenancy’ route, however, provides flexibility as the landlord can regain possession of the property if required by serving a variation of Section 21 of the Housing Act 1988.

On a managed service Luscombe & Co provide all of the above services and advice as well as managing your property to a high standard we can help when it comes to the Tax year end and provide you with your property tax return.