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July 2010

A First Home Saver Account: Get Your Free Money From The Government

by Chris on July 29, 2010
A First Home Saver Account: Get Your Free Money From The Government

If you’ve read my recent article here, you know that it takes a young couple about four and a half years to save up for a deposit. I don’t know about you, but I think saving is difficult. It takes discipline. It takes sacrifices. So it only seems natural that one would want to be [...]

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Want To Buy a Home – What do Banks and Lenders Consider?

by Chris on July 24, 2010
Want To Buy a Home - What do Banks and Lenders Consider?

There are a number of factors a lender will consider when you ask for a home loan. Knowing what they are looking for can increase your chances of being approved. To qualify for any home loan you must have a deposit. Some Banks and Lenders will consider borrowers with a 5 per cent deposit, a [...]

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Tenancy reference letter

by Chris on July 17, 2010
Tenancy reference letter

Filling a form If you could look at the world through the eyes of a rental property manager, this is what you’d see: not all tenants are born equal. There are bad tenants, and there are good tenants.

But how do you show them that you’re a good tenant? Do you walk with a neon sign above your head “Best tenant over here, pick me!”?

No. You prove it, and that way convince the property manager you are the person they are looking for, the best of the whole pack.

And here is your proof – a tenancy reference letter. If you have rented before, get in touch with your previous property manager / estate agent / landlord and get them to sign this letter (remember to fill in the blanks). Whether you were living in Australia all your life or have moved here from overseas, this letter is a must-have.

Tenancy reference letter

To whom it may concern,

This is a reference letter for ______________. He / she was a tenant in ___________ which I own / manage. During the period of his tenancy ( X months) I found him / her and his / her family to be very reliable tenants.

______ always paid the rent on time, the rental property was kept in order, maintenance reports were submitted in a timely manner and no complaints were lodged against him / her by other residents.

When __________ moved out, he / she left the rental property in a very good condition, clean and tidy, and his / her bond / deposit was fully refunded.

I would feel confident recommending ____________ as prospective tenant.

Sincerely,

Name

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Buying a house: the great Aussie dream or the great Aussie nightmare?

by Chris on July 12, 2010
Buying a house: the great Aussie dream or the great Aussie nightmare?

Saving Money Let me ask you a question:

If you’re 25 now and dreaming of buying a house, how old will you be when you actually move in?

According to the latest report from Bankwest, the correct answer is “almost 30, and you can’t do it alone”.

But why? Because the time it takes a young couple (not a single person, but a couple!) to save $85,000 for a deposit (a mere 20% of the median house price) is 4.5 years. Buying a unit won’t be much of a shortcut – you’ll have to spend 4.3 years saving, almost the same time.

Shocking? That would be an understatement.

This calculation implies that a couple should save 20% of their gross income annually, to get there. This means that it will be even a larger proportion of their net income.

Just one year ago, instead of saving 4.5 years, the same couple with the same income had to save up for just 3.7 years. This is the problem with boosted government grants, you see – they blow up the prices out of proportion, and then the grants are reduced to pre-boost levels – but the prices remain ridiculously high.

I don’t really see a way around this situation. Unless house prices return to reasonable levels due to some divine intervention, or unless people are willing to compromise and choose to buy a house in a much less expensive area, it will be necessary save for that long. Not many people will be in a position where they can save more money faster, because it takes at least 2 major, not easily achievable, components – a high wage job and discipline.

Those interested to see areas where they can buy a house quicker should have a look at the maps in the report – the color-coding shows which areas are more affordable then the others. Choosing a more affordable area can halve the time spent saving.

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First Home Buyer Grants: the good news

by Chris on July 8, 2010
First Home Buyer Grants: the good news

Pretty House If you are considering purchasing your first home in Victoria, the good news is that our government might give you more money.

From the 1st of July first home buyers purchasing a newly constructed home may be eligible for an increased First Home Bonus of $13,000. People buying their first (newly constructed) home in regional Victoria got even luckier – on top of First Home Bonus they may be eligible for another payment of $6,500, the First Home Regional bonus. This is all in addition to the First Home Owners Grant ($7000), of course.

It is funny how these adjustments to grants and bonuses point at the main goal. What the government would really love to see people doing is showing preference to newly constructed houses (as opposed to the established ones), so they take the 2K bonus that established houses were previously eligible for and give it to the newly constructed homes in metro and regional Victoria, raising the total amount from $11,000 to 13,000. And to encourage people to buy homes in regional Victoria even more – they raise the regional bonus another $2000 – from $4,500 to $6,500.

Another funny little detail that I noticed is that to qualify for the FHOG the property should cost less than 750,000 – when previously it was caped at 600,000. I wonder if this is because the median prices went up 25%(!) last year. What do you think?

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10 Tricks To Find The Best Tenants

by Chris on July 5, 2010
10 Tricks To Find The Best Tenants

Good tenants My dearest tenants, as much as I enjoy talking to you every chance I get, this article is more for the landlords amongst us. It is a good chance for tenants to see things from the landlord’s perspective though :)

Using tricks to find the best tenants can make managing your property virtually pain free. There is probably no worse stress for a landlord then having tenants who do not maintain the property or who don’t pay the rent on time. One of the ways to make sure this does not happen to you is by getting great renters from the beginning. It can be hard to determine upon first meeting people if they will make good renters but you can draw better renters to your property by following a few tricks of the trade.

Top 10 Tricks To Find The Best Tenants

1. Make a great first impression. This is about you and how you look and act when you show the property. If your appearance is neat and you behave in a professional manner then responsible tenants will want to do business with you.

2. Clean the whole home. Whenever you show a house make sure it is sparkling clean condition. This means every corner should not only look clean but smell clean. No matter how neat a home is, if it smells like cat pee no reasonable person will want to rent it.

3. Spruce up old paint. Paint is an easy and quick fix to making a place look better. The rule of thumb is to stick with white paint because it makes rooms look bigger and brighter. Don’t forget to touch up the trim too as it can get quite grimy.

4. Make sure the outside of the house is appealing too. One of the tricks to finding the best tenants is to present the home in the way you want it to be kept. If people are willing to rent a house with an overgrown yard and trash in the lawn then they will probably not take care of the house once it is theirs.

5. Try not to show a house on trash day. This is a great thing to keep in mind because garbage days make the whole neighbourhood look a little rough. In addition to the trash bins and bags there will be a bad smell and the possibility of critters that drag trash down the street.

6. Clean up building common areas. If you are renting an apartment make certain that areas like the front hall, laundry facility, and mailboxes are neat and tidy. Your potential tenants will check out these spots before they make a final decision.

7. Make sure the rooms make sense. If someone is currently living in the home and uses the dining room as their home office have them move those items to a more traditional location. This way you can show the house with rooms being used in a traditional manner which helps renters visualise their things in it.

8. Repair anything that needs fixed. Look at your rental with new eyes and repair even the smallest items that need it like replacing damaged blinds and re-glazing the bathtub or sink. No renter worth their salt wants to put down the money to rent a home that needs work before they move in.

9. Clean out forgotten areas. Once you live in a home it is easy to overlook things like kitchen cabinets which can hold dust and dead insects, or windows that are covered with fingerprints. However, when you are looking at a rental home you will notice and probably be a little disgusted with the mess.

10. Clean out the appliances. Potential renters will look inside refrigerators and stoves and there is nothing worse then seeing burnt on food or mold inside. Clean it out and you will likely get the same level of clean from your tenants.

These tricks to find the best tenants can go a long way toward making your rental process easy. Remember that people who are willing to accept a home in less then perfect condition are unlikely to keep it in better shape then they found it. On the other hand people who maintain their home and take pride in paying rent on time want a house that is worth their effort so they will be attracted to a well kept place. Rental property is a great investment but it is a lot of work, especially with deadbeat tenants. Do your best to make your home attract the best tenants around.

This article was written by William Eve who is a regular personal finance writer for Home Loan Finder, a 100% free mortgage comparison and application service. Whether a first home buyer or investor, visit the Home Loan Finder website for more quality information and guides on competitive mortgage products.

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Chris on the LifeStyle Channel: 4 Quick Tips For Renting With Pets

by Chris on July 2, 2010
Chris on the LifeStyle Channel: 4 Quick Tips For Renting With Pets

Renting with pets The rumors are true. From now on I will be writing for the LifeStyle Channel – they have offered me some room in their Property column, and I excitedly said “Yes!”.

Don’t worry though – Home I Own will still remain my mothership, and I will be here to update, educate and entertain you just as much as before. Me partnering with the LifeStyle channel simply means that you will be able to read some more of my articles there.

Such as this one, for example: if your pet ruins your chances of getting a decent rental, read my 4 Tips For Renting With Pets. And then leave a comment to tell me what you think!

Photo by amazing Greg Brave of Photopathway.com

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