Things You Should Think Before Becoming An Income Apartment Investor

Are you an investor whose primary concern is to earn income, that is income less expenses? Then, here are the things you care mostly about: the rent you are receiving, the body corporate fees, the rates, and any other outgoings. Below are specific details you need to know to make sure you are putting your money into an income-generating apartment.

1. Which type of apartment is the best?

If you are an apartment buyer and want to become a successful income investor, the best types of apartments to invest in are the smaller ones. Ideally, you should buy properties that are below 50 square meters as they give higher returns particularly those that are below 40 square meters.

2. Why smaller apartments are better?

The obvious reason is that smaller ones are easier to rent than larger ones. As an owner, it’s much more difficult to find tenants for a large apartment with many rooms. Naturally, you need to look for a family or a group of individuals who want to live all together or you will have multi-tenancies who prefer home-sharing.

Secondly, apartment size is an important criterion for bank lending. Banks have certain restrictions on apartments that are below 40m2.

Smaller apartments are most often income focused and buyers need to deposit at least 50%.

All these simply mean all your other occupiers are taken out since they cannot afford either the 50% deposit or the fact that no bank would give what they need. Most of the owners of smaller apartments are investors which is perhaps the reason why they are categorized as investor apartments.

3. How do you measure the true value of your chosen apartment?

With the many sales methods used these days, it can be a really challenging task to find the true value of the apartment you’re looking to invest in. The most effective way to accomplish this is through an apartment valuation tool which uses real world sales data and assess the property based on its current condition along with other important factors such as location, size, number of bedrooms, accessibility, amenities, general atmosphere, as well as the distance from city services and other basic landmarks.

 

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Tips To Redesigns For An Old Flat

When you have a garage or outdoor shed in your property that is no longer being used, one option that you can consider for putting this space to good use is to convert it into a granny flat. This miniature house of sorts has become a popular fixture in many Australian homes because it offers a great way to utilise space in a residential property as well as save on rental costs that a person would have to pay if he were to settle into a place elsewhere.

This second dwelling can be fixed up to be attached to the house or separated. Many property owners choose to build it as a separate structure so that it would not disrupt the original house, which could involve high renovation fees.

Not just for grannies

The name “granny flat” is said to have come from the fact that these structures would be used by families to provide a separate living space for their ageing or disabled parents, so that they could maintain some degree of independence while still remaining within the family property where they can have company, assistance or any help that they would need.

But more and more people are becoming creative with their use of the granny flat; others would use the space as a home office or a place to pursue hobbies, like making crafts or building things in a workshop. Still others fix up the place to so that they can rent it out to individuals or couples looking for an affordable place to live.

How do these spaces look?

Granny flat designs, Sydney experts say, can vary greatly from place to place, depending on their intended purpose. Generally, a granny flat has to be smaller than the original house in the property; some of the minimum requirements include maintaining a property size of 450 square metres, and a maximum size of 60 square metres for the actual granny flat.

Some granny flats come with one or two bedrooms, one bathroom, and an open-plan kitchen and living area. Others can have up to three bedrooms and two bathrooms instead of one, plus high ceilings so that the unit can benefit from more space and light. A porch in front can also be incorporated so that its dwellers can have a place to enjoy the sun and the breeze.

Because these secondary units are smaller, it can take only about eight to 12 weeks for them to be built. If you’re eager to get one built on your property, it’s best to get in touch with a company that specialises in building granny flats – you can pick from their prepared designs or work closely with them to have a customised design followed for the unit. Click here to know more.

 

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Young Renters Prospects for Becoming Owners

Current statistics suggest that fewer and fewer people in the middle class will own their homes, particularly among the young. But several forces defy that trend.

The numbers suggest a downward economic slide: real estate chain Countrywide predicts another 600,000 people will be renters and not owners by the year 2019. This is on top of the million UK residents – concentrated in the 25- to 34-year-old age group – who have become renters since 2010.

What’s going on is fairly easy to understand. As the UK population has grown in the 21st century, house building has failed to keep up. This supply shortage increases the cost of both ownership and renting. Compounding this was the financial crisis of 2008, which was followed by a tightening of credit on all borrowing. Younger workers were being paid less as the price of housing went up. Now with wages rising, the main challenge is mustering an adequate deposit – which more typically comes from the “bank of mum and dad” than what individuals are able to save.

So what do those with money to invest make of this? Is the best option to invest in REITs, which largely concentrate on the rented sector? To be a buy-to-let landlord?

There are indicators that, despite dim prognostications on the growing renter class, that building for homeowners is still a smart path for all concerned:

• Most people agree, within Government and among economists, that an ownership society is a more economically stable society. Brits who are on the property ladder will accumulate much more wealth over decades that will provide them a more comfortable retirement.

• Shelter, the housing charity, encourages building for all economic strata as it takes a general “rising tide raises all boats” perspective. What the organisation wants is more homes, period, such that those at the lowest levels can find affordable rents.

• Government initiatives that enable buying – Help to Buy, Right to Buy and Starter Homes schemes – have already proven or are likely to prove successful at stimulating both purchase access and increased homebuilding.

• There is a growing consensus that some greenfield and green belt lands might be swapped for brownfield property that would be more appropriately repurposed as urban greenspace (versus residential construction). With more land on the periphery of major cities dedicated to residences, it becomes possible to improve the quality of life nearest centres of work and commercial developments.

• Local planning authorities that are tasked with development goals from the National Planning Policy Framework (NPPF) are reaching for ways to collectively increase the nation’s housing stock, many of which are written with the input of property fund partners whose research show where people want most to locate their homes and where infrastructure will be most cost effective.

• London is no longer the only place to live: anet outflow of 22,000 people in their 30s happened in 2013-2014, a response to soaring house prices there and simply recognising that cities north, west and south have a good quality of living to offer (Birmingham is the favourite, followed by Bristol, Manchester, Nottingham and Oxford).

Investment capital into property generally follows these migrations, and consequently the healthier supply of homes in those cities means that they are becoming more affordable. Particularly in an information-driven economy, this cultural shift is much more likely over time.

Who can analyse specific investments as well as the general balancing of risk in individual portfolios. There are many variables in real estate and housing investments and as such should they should be considered holistically.

 

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Tips To Hire a Contractor to Do Work in Your Home

An important aspect of hiring a contractor to do work in your home is to understand what permits, special requirements or licensure are required for each job. Once that’s understood, you can know whether it’s best to hire a licensed contractor or a handyman.

REFERRALS
Be sure to ask for referrals and references and know the relationship of those referring parties to the contractor. Ask for pictures of installations on similar jobs that have been performed for others and give those referring parties a call or visit to ask how the work was performed, the attitude during the job, coming in on budget and wrapping up on time. Discover if there are any negative remarks online or with the BBB. Be sure he or she is qualified to handle the scope and type of work needed, especially with regard to special conditions such as lead based paint, asbestos, mold, etc.

IDENTITY
If the home is occupied, if personal items are stored there or is otherwise notid_verified vacant, be sure to qualify your contractor if he’s unknown to you through online services such as mysmartmove.com or others. Get a copy of the contractors driver’s license and have him sign a w-9 to include his social security number. If you’re an investor and renovations are common for you, you may want to investigate the Verify Photo ID app recommended by Inman News.

CONTRACT
Next, execute an Independent Contractor Agreement with your contractor. Be certain it has no verbiage or requirements to suggest the contractor is an employee of yours.

PHASES
Now is the time to outline and understand the three phases of the renovation. The initial Phase One is paid on day 1 of the job. The subsequent draws for Phases Two and Three should be paid by the week, on a Monday or Tuesday. In constructing the phases, the contractor should budget for each item and any overages or misquote is the responsibility of the contractor, not the homeowner. Make sure your agreement covers things such as milestones, and outlines the scope and sequence of the work to be completed. The contract should include the description of all work, and condition of Customer Satisfaction such as all items completed in a workman like manner, job site left clean and tidy daily, and no items incomplete.

MATERIALS
Ideally the home owner should have chosen paint colors, sheens, types for each space, cabinets, granite and whatever materials will be used in the project at the source. Have your Independent Contractor pay for those materials and have that provider deliver the materials to the job site, then reimburse the contractor immediately – this strategy avoids any appearance of establishing an employee/employer relationship. Do not pay for routine tools and supplies the contractor uses in his everyday business such as paint brushes, ladders, tarps, etc.

UPDATES
If you’re not the owner occupant at the job site, require the contractor to provide daily pictures and videos of each phase when complete before scheduling a personal inspection and before payment on that phase is released. An investor can use this in the future or marketing.

COMPLETION
In exchange for the final payment the homeowner should sign off that he is satisfied with the job, and the independent contractor should sign that he is releasing all liens in exchange for final payment.

 

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