Risk-averse Aussies say real estate not wisest place for savings

Post to SinFongChanRE.wix on 31/12/2017 at 12:51 PM
Commenting on “Risk-averse Aussies say real estate not wisest place for savings”
https://www.domain.com.au/money-markets/riskaverse-aussies-say-real-estate-not-wisest-place-for-savings-20171221-h08r7h/

It seems "time" is moving faster and progress is pushing on in all directions, so much so that most people are lost, not knowing which direction to take, and therefore are too afraid to make long term commitment.

These days, many things are made NOT to last, and that include relationship. In many cases, things and relationship can be grouped as disposable.

By now, you may get a bit annoyed because this is a real estate blog and you don't come for a lecture about life. Well, you can just stop reading, and after all this is the last post of the year, and for some, this is the last post for good. I shall not be intruding into your FB life because I shall invite selected people only to have access to my site.

However, if you do read on, you may change your mindset, and be a wiser person especially in real estate investment.

Real estate investment is a long term investment. For those who are married, the decision is not unilateral, and the cost of divorce can be a real nightmare because property ownership settlement can be fairly ugly. There goes the "happy moments" living in a disposal era!
The real estate boom in Melbourne began to dwindle in 2015, and the so called gurus and experts who never admitted their over optimistic predictions began to wave their white flag in October 2017.

A property in Glen Waverley sold in late 2015 for over $2.6m has been back in the market for a while with an estimated of $2.2m. Apparently, there was an offer of $2.4m, but the vendor rejected it. The question is, "was the offer genuine?".

Real estate is the least liquid of all investments, which means it cannot be converted to cash easily, with the exception during the crazy, out-of-control market similar to that previous 5 years.

Early entrants at the boom cycle, bought and sold for quick turn around do make good money. As what I pointed out in one my blogs, when greed sets in and those invest more and more using the get-rich-quick principles will face their judgement during the last leg of the boom.

I have been encouraging you to drive around the outskirt of the Melbourne's already build-up suburbs. If you have done so, you will see very clearly there is plenty of space for a lot more housing development.

Before "suburbanisation", Camberwell was the boundary for the east, and later the line was drawn further out to Box Hill. Glen Waverley was still very sleepy in the early 70's.

In the 60's and 70's, flats were built for those who could not afford to buy landed property; in a way they were sub-class investors. In the 70's, the word "apartment" began to appear, because Hong Kong migrants start to "settle" in Australia. The humble "flat", a British word with a single syllable, was replaced by the a bit more "sophisticated" word known as "apartment".

What is happening now in the apartment market is very similar to what happened in yesteryear, except the apartment sale has been repackaged to attract those trendy generation, and those who would be better off spending their money, being pampered by 6-star hotel staff around the world, living on the top floor enjoying the view of the "clouds".

The first house my wife and I owned in mid 1970's cost $28K, and we sold it for about $31.5K. It was then sold for $138K in 1999 by the owner of that time. When construction of the Eastern Freeway was announced, it jumped to $368K in 2006. The current estimate is about $930K.

Has the present owner done anything to the house? None, what so ever; no extension nor major renovation within.

I sold a property in Glen Waverley to a client for about $295K in 1995. The buyers wanted to back off, but I put my foot down and insisted they should raise the fund to buy it. I told them NOT to let that golden egg slip pass. The property is worth around $2.4m by my estimation.

I cannot do it now, insisting my client to buy a property, because only qualified advisers can advise their clients how to invest specifically. That's is why I am rather vague when some readers message me for more specific advice.

I did not have much knowledge about real estate then; I thought investing in real estate was only a game for the wealthy. It is not true, because not every property costs millions of dollars, and not every property is for personal use that must suit very stringent criteria.

It is true that real estate investment does not suit many people, but if you have children to pass on your inheritance, I think one or more property titles are not a bad option.

Real estate / property investment includes land; different types of dwellings such as house, townhouse, unit, apartment; office, warehouse, shop etc.

Remember what I always say, "invest within your budget", and "knowledge is power".

In future, links to my posts will be sent to those who request them by messaging me.

Thank you very much for reading.

Wishing you a very happy, healthy and safe 2018.

What’s really going on when someone thinks their house is haunted

Post to SinFongChanRE.wix on 30/12/2017 at 3:04 AM
Commenting on “What’s really going on when someone thinks their house is haunted”
https://www.domain.com.au/living/whats-really-going-on-when-someone-thinks-their-house-is-haunted-20171218-gzz2cs/

I know this post is going to be the most read blog for 2017. Whether you are superstitious, a religious believer, a feng shui practitioner or just a skeptic of paranormal event, you may treat it as mumbo jumbo, informative or entertaining.

As a small boy, I heard stories about fairies, wicked witches, bomoh, angels, and even the Almighty God. Some of these scared me but never scarred my tender memory, because I understood then that not everything needed to appear in physical form or present to represent their existence. To support my argument, I used thought and memory to justify the existence of both although I had never seen them.

It dates back to more than twenty five years ago, after the weekly stock run - inspecting properties listed during the past week. The sales staff visited an one and half years old own-occupied home. It was part Federation style, and part contemporary style. As usual, my team of buddies consisted of four members including an English-Aussie lady, would gather in one of our cubicles and have a chat fest upon returning to the office.

I described my "hairy" experience when I was inspecting the laundry and walking pass the passage way of the house that we visited about an hour ago. To my surprise, the lady felt the same. She "admitted" she had sixth sense.

The property was a bright house, with plenty of morning sunlight shining through some of floor-to-ceiling windows. Strictly speaking, the house temperature was just comfortable, and not nippy at all, and yet both the lady and I were showing goose-bumps as we were inspecting those locations mentioned above.

After that open and frank discussion, our team would exchange notes about our "experience" after each stock run, or inspection of a new listing.

I hinted before in my writing that if you do not feel comfortable without any logical reason when you enter the house or inspect some part in the house, no matter how much you like the rest of the house, I do suggest you do not proceed with any offer to purchase.

Whether your goose bumps are popping up, or you just feel the presence of some beings, such experience will affect you or other family members psychologically and it is unlikely that the house will turn into a happy home.

I heard of babies or young children being very sensitive to some unexplained phenomena. Some seem to cry without reason at particular part of a house. The cry is not due to hunger or physical discomfort, and they resume to their normal selves after leaving the property. Besides babies and young children, puppies seem to have that extra sense.
There were times I would not stay inside a house during open-for-inspection; It had nothing to do with say the stinking smell of cat pee or untidiness of the house. Somehow I felt uncomfortable to remain in the house, even after trying to deal with the situation with my bag of tricks.
I was very particular about the lighting inside the properties that I listed. I liked all the blinds or curtains drawn wide open, and all lights switched on. I normally advised my clients to change light bulbs to higher wattage if necessary. “Romantic” dim lighting was unlikely to work well for daytime open for inspection, anyway.

Certain photos or pictures, especially of the former deceased owners or close relatives, conspicuously displayed including being hung on the wall, did not go down well with me. I would advise the present owners to remove them or replace them with other images temporarily during the campaign period. That was not always welcomed by the owners.

I have other experiences but prefer to keep them untold. Do you have a story to tell or share with other readers?

Thank you for reading.

Quick visit to first-home buyer belt

Post to SinFongChanRE.wix on 29/12/2017 at 7:09 PM
Commenting on “Quick visit to first-home buyer belt”

My friend requested my company to check up some properties around a few areas. It was nice to be chauffeured in his brand new car!

What a day! The weather was very kind to us; it was warm, then turned mild and finally cool. The sky also opened up with some drops of rain.

We covered many suburbs away from Glen Waverley (GW) - Upper Beaconsfield, Officer, Clyde, Berwick, Cranbourne, Mulgrave then back to GW.

There are so many new developments and some buildings are yet to be completed. This is a first-home buyer mortgage belt and am concerned that the mortgage stress is going to affect quite a number of owners.

No doubt some very early adopters have made good profit, but those followers with over stretched budget will suffer for many years to come.

Why not take a drive and check out Officer, newer part of Berwick, Clyde and the surrounding?

Thank you for reading.

Five property market trends to expect in 2018

Post to SinFongChanRE.wix on 20/12/2017 at 12:32 PM
Commenting on “Five property market trends to expect in 2018”
https://www.domain.com.au/money-markets/5-property-market-trends-to-expect-in-2018-20171219-h070e9/

I love to bring good news story to my readers. 2018 may be the year for you to get the first home.

Please do keep in mind not to over stretch your budget. Be contented and learn from your experience of owning your first home. Nothing is perfect, so do not start any blame game should the house is not 100% match.

If things can be fixed within your financial capacity or physical capability, they are not problems. Be a solution seeker and a problem solver rather than a whinger.

I do want to advise you though, that if the carpet is old and dirty, strip it off. If the floor board is real pieces of timber not chip board, and the condition is still good, polish it instead of re-carpeting it. If the the bare floor is neither timber nor in good condition, you may consider installing floating veneer floor board. It is not difficult to install, so you may want to take it on as the first project.

The front / back gardens are very important places. I shall discuss more on gardens some other time. If you do not have not developed green fingers yet, just mow whatever you have on top of the ground. Landscaping is expensive, and if you undertake such task, you are going to be very frustrated and tired. For the time being, just keep them tidy and safe from items that might injure the users. Landscaping is my hobby and I love it.

No matter how much you like swimming, I am going to say it bluntly that DO NOT buy a property with a pool. There are strict laws to ensure the pool is fenced properly. The running cost is not cheap in order to keep the pool clean all the time. If you have been in Melbourne for more than one year, you should know how many warm days there are to justify the keeping of the pool. Go to your nearest City Council pool instead.

Thank you for reading.

How to become a property developer

Post to SinFongChanRE.wix on 19/12/2017 at 1:41 PM
Commenting on “How to become a property developer”
https://www.domain.com.au/advice/how-to-become-a-property-developer-20171219-h030qk/

The higher the risk, the greater the return. Many people want to make "big" money in real estate, and lure into becoming property developers. Are there many successful ones? Are there more failed developers than successful ones?

It is the pessimistic Sin Fong talking again. Out of the blue, news media publish news of an ordinary person just won mega-million dollars lottery. Many readers write in commenting how lucky the winner is, and how deserving the windfall goes to the battler. With one big winner, there must be hundreds of thousand losers who foot the bill.

When you are young and single, and have an ambition to go for big return legally, my advice is to go ahead. As usual, I have to qualify that advice: don't drag your parents' property or life savings to fulfill your ambition. If you sink, don't let them drown with you.

Whether you are going to start a business, development, buying a house, do kick off with a small one first. Patience is a virtue. Once you understand all the ins and outs, go one step further; not with all the winnings you get from the previous one, but with some kept away as your reward of success, or as backup fund.

"Young and single" is a preferred prerequisite. However, you have no one to support and have plenty of spare cash, even when you are in your 70's, go ahead to fulfill your life long ambition. Colonel Sanders sold his KFC name at 73.

It is like a toddler learning to walk. He will fall, but as long he is not injured, with determination and support of the parents or people that love him, he will try again and again and eventually walk and run on his own.

When you are young with people behind supporting and encouraging you, you are unlikely to fail, unless you play your own rules and ignore the well tested ones.

You should not take that gamble if you have a family to look after, and burden with financial commitment. No matter what the circumstance is, even your favourite bank offers you very low interest rate loan, you must think twice; you must weigh out the pros and cons, including other factors like family togetherness, psychological impact on the family, effectiveness in doing other things, your employment if you are currently "moonlighting", etc.

If you really want to start, may be as the linked article suggests, a granny flat can be a good project. Most are cheaper than a block of land. However, if do have enough saving for the deposit of a piece of land, invest in it. You do need to understand the surround before splashing your cash.

With land you can do a lot with it. You may keep it for capital growth. If it is a large block, you can learn to sub-divide it. You can experience the joy and pain of getting a house built on it, or become a owner builder to build the house. If more than one dwellings can fit onto the block, you are talking about the birth of a new developer - YOU!

"Sitting" on a block of land for capital growth can be more profitable proportionately than developing on it. It is relatively stress free!

Thank you for reading.

Housing investment rates to fall, raising prospect of longterm down-turn

Post to SinFongChanRE.wix on 18/12/2017 at 11:02 PM
Commenting on Housing investment rates to fall, raising prospect of longterm down-turn”
http://www.theage.com.au/federal-politics/political-news/midyear-budget-update-housing-investment-rates-to-fall-raising-prospect-of-longterm-downturn-20171217-h06al0.html

Now, it is not the real estate agents that confirm what I said about the downturn. This news release is from the government, and should not be taken lightly.

The small wage growth forecast seems to be optimistic. I believe it will grow by 3%. Higher wages is good news for first-home buyers only if they save up the extra for a greater deposit to “impress” the bank / lender.

Readers must take precautions when investing in real estate. Do make sure it is not impulse buy. If you are not a handy person, a run down house can be a lot of out-of-pocket expenses in the short and long run.

During this break, besides driving around to familiarise yourself with properties in different suburbs, it is not a bad idea to learn some new handyperson skills via YouTube or attend “course” at Bunnings.

Thank you for reading.

Quiet credit squeeze could hit Melbourne auction prices harder next year

Post to SinFongChanRE.wix on 18/12/2017 at 1:05 AM
Commenting on “Quiet credit squeeze could hit Melbourne auction prices harder next year”
https://www.domain.com.au/news/quiet-credit-squeeze-could-hit-melbourne-auction-prices-harder-next-year-observers-say-20171217-h066pn/

I know only a handful of loyal readers follow my posts frequently. I do hope they benefit from my advice.

I find some supposed “followers” do not read my posts and are still living in the past. Some could not believe the downturn is here. They do not know the reason of the downward slide, ignorant of government‘s policies restricting foreign investing in real estate, and foreigners’ own government’s policies controlling the outflow of cash.

The latest linked article highlights the trouble of the real estate market in 2018. The more expensive the property, the more difficult it is to borrow money, and the percentage amount for deposit required to secure a loan is higher too.

If I am a buyer advocate, but I am not, I probably would stop many buyers from paying all the unnecessary extra premium for properties not worth that much. I still believe most of the properties are still at least 10% to 15% over valued.

Talking about development, If you come around Jells Road and Ferntree Gully Road, Wheelers Hill, you will see development sites which have been “development sites” for years. I really wish the developers good luck, and have some real construction starting in 2018.

Recently, an apartment developer comes out with a new scheme allowing “qualified” potential buyer to put $1 as deposit until the project is ready to go. The potential buyers will then pay the remaining amount of the full 10%. I hope this development is not going to be like those in Wheelers Hill.

Thank you for reading.

Auction clearance rate

Post to SinFongChanRE.wix on 17/12/2017 at 10:26 AM
Commenting on “Auction clearance rate”

Is there any message about lower auction clearance rate?

Clearance rate drop indicates there are more pass-in. The reason for pass-in is because the price is too high or unrealistic. That only implies prices have to drop.

Those houses that sold at auction could have fetched much higher prices during better time.

I am still searching for a suitable agent to sell a client’s property over $2m more for redevelopment. It does have a house on the block, requiring Tender-Loving-Care (TLC).

Compared with a few months ago, the price has probably dropped by more than $200,000. Statistically, after analysing more than 20 sold properties in the same area, the average per m2 price has dropped since July 2017.

A reader Anne messaged a few days ago and shared the same observation that sites suitable for redevelopment are not selling well.  My response is that there is not enough margin for developers especially the small timers to make a reasonable profit.

It is better for buyers to buy off market or private sale rather than at auction. Unfortunately, some properties cannot go for private sale and must be auctioned. You do need to know what is the appropriate breakeven and stick within your budget.

Never go to an auction or talk with an agent thinking / bidding as though you are a seller. By doing so, you only believe the house should be sold at higher price.

Thank you for reading.

Melbourne auction outperforms Sydney but experts warn of looming downturn

Post to SinFongChanRE.wix on 16/12/2017 at 1:27 AM
Commenting on “Melbourne auction outperforms Sydney but experts warn of looming downturn”
https://www.domain.com.au/news/melbourne-auctions-outperform-sydney-but-experts-warn-of-looming-downturn-20171215-h041pv/

If you follow the auction results published in Domain each week, you realise the outcome of a lot of the advertised auction properties is not submitted. If we assume the worse case scenario that all the omissions result in pass-in, the success rate is close to 50% instead of hovering between 60% and 65%.

Those TV programs on home renovations and remodelling attracted some small timers to buy properties and value add to them. Will they come out in front after months or even a year or two of hard work to bring those properties up to scratch or turn them into master pieces? I doubt very much so. They have missed the boat.

Many property owners have a grand plan to cash in their old properties and buy themselves a newer one, or downsize to a smaller one. Some even hope to have enough money for a long holiday break or help their children to pay the deposit for their first home. Unfortunately, they are a bit late for that, because the downward slide is becoming a whirlpool.

I do encourage you, the readers, to attend weekend auctions just to learn a thing or two. Please do not be tempted to bid at an auction though.

Why stress yourself at auctions over brick-and-mortar? You have waited for months, so why can’t you be a bit more patient for the market to cool a bit more.

In the meantime, go to as many open-for-inspection as possible. Do not just browse, but be observant - the front garden, the entrance, passageway, home theatre, lounge, dining room, meals area, bedrooms, showers / bathrooms, toilets, kitchen, laundry, taps, family room, pantry, garage, doors, windows, backyard, clothes hoist, wall, ceiling, light fittings, flooring, floor, concrete pavement, surrounding tree, etc.

Hope you have enough information for the week. Thank you for reading.

Melbourne real estate agency cops record $880k underquoting fine

Post to SinFongChanRE.wix on 14/12/2017 at 6:11 PM
Commenting on “Melbourne real estate agency cops record $880k underquoting fine”
https://www.domain.com.au/news/underquoting-real-estate-agency-fletcher-and-parker-balwyn-fined-record-880000-in-federal-court-case-20171213-h04ax1/

Underquoting  was a real pain for many buyers who spent time and effort getting their finance ready, turned up to an auction full of hope but only to find that their budgeted amount was nowhere near the final bid.

There is no way to estimate the actual worth of a property, even by the most experienced valuer. An agent can only estimate what it is worth based on the sales of comparable properties in recent time. Should someone turn up and want to buy the property desperately, the final price may well exceed the market Value.

When you see a price range being advertised, it has to be no more than 10% difference between the lower and upper prices. It was a common practice for some unscrupulous agents to quote the price range below the market value. The intention was to attract more buyers to visit the property they might otherwise not be interested in.

The unfortunate victims became the pawns helping the agents to generate a competitive atmosphere at the auction, and excite those with deeper pockets to bid the price higher.

It was also a common practice to quote a property to be of value of x-dollars plus. I had challenged agents before offering x dollars and 5 cents to buy the advertised property. When declined, I asked for the reason, and wanted to know under what condition would x dollars and 5 cents be accepted. I could not take the matter further, because I was not a genuine buyer willing to pay x dollars and 5 cents for the property. I was also very green in the real estate game then.

When you make a genuine offer on a property next time, do note down the conversation and any exchanges with the agent or agent’s representative. You may not be allowed to photograph, record or video the proceeding without the permission of all participants. Don’t be afraid to alert them in a nice way what you intend to do.

If your offer is declined, you are entitled to ask for a reason. You may even ask point blank what figure and condition the owner really has in mind.

If you come across unethical practices, whether it is in the Real Estate industry or any industry, do not be afraid to speak out. Just a word of warning, do it the right way; arrange a meeting with owner of the business or lodge your formal complaint to the Consumer Affairs Victoria.

Thank you for reading.

Most homeowners with mortgages couldn't handle a minimum rate rise

Post to SinFongChanRE.wix on 13/12/2017 at 2:48 PM
Commenting on “Most homeowners with mortgages couldn't handle a minimum rate rise”
https://www.domain.com.au/news/most-homeowners-with-mortgages-couldnt-handle-a-minimum-rate-rise-survey-finds-20171213-h036eb/

Last year, I talked about real estate and related bad news would keep on coming after September 2017. Sure enough, the release valve was opened, and bad news kept appearing in different media.

When I wrote my blog yesterday 12 Dec 2017, I did not expect to read another bad news article like the one linked below so soon.

I have warned many times that when investing in property, one must always keep within the budget, and keep some reserve as back up at least for a short period. I also warned not to take the advice of many "get rich quick" investment gurus, because if their schemes are so good, they should just keep investing using their own schemes and become billionaires.

It is important to recognise that owning a property should not be the ultimate goal in life. There are many reasons why renting is not a bad option. If the property ownership and property investment craze is to continue, the biggest killer disease will not be cancer, but mortgage stress!

In order to avoid getting into trouble in mortgage repayment, it is time to review the phone plan, utility suppliers, insurers, car usage frequency, food shopping regime, reduce extra cups of coffee or take away food, stop those unnecessary subscriptions, no more new electronic gadgets, etc.

Obviously, a better way to avoid mortgage stress is to bring in more income. For that, I have leave it to the individuals because they know themselves better than anyone else including me.

If they can't sacrifice a bit of their life style, they may end up with sacrificing their lives!

Thank you for reading.

Australia's housing boom is almost over

Post to SinFongChanRE.wix on 12/12/2017 at 4:34 PM
Commenting on “Australia's housing boom is almost over”
https://www.domain.com.au/news/australias-housing-boom-is-almost-over-says-hsbc-chief-economist-paul-bloxham-20171212-h031ge/

I wonder major banks, economic research firms and fellow real estate agents read my blogs. Hey people, are you interested in engaging this Chinese Nostradamus in your team?

Despite my interpreting information from secondary (reported) source only, I am fairly good in reading between lines about the rise and fall of the real estate market.

Guessing the boom and bust timing may not win me a prize, but I did win ok on price last year when I sold a block of land making substantial gain.

No one has a real crystal ball to foretell the market, but these days there is plenty of news available via different media including cyberspace to enable me to make informed "guess". I call it the virtual crystal ball.

The linked article actually mentioned that "... during the past six months Sydney prices have fallen by one per cent". The question is did Melbourne experience the same? I do not have the data yet, I believe Melbourne's prices was not much better than Sydney.

I do believe the news is NOT good for those bought properties for a quick return; some gambled on continuous rise and borrowed heavily, and they may hit a snag next year. Yep, I am against many economists' prediction including RBA that there may not be any rate increase in 2018.

The signs are there that there will be wage rise in many sectors; food prices may soar due to erratic hot weather that ruin the crops. In January, utility prices will go up, and these will put a dent in the consumer price index.

Not only CPI will increase, inflation will increase as well.

I am neither an economist nor a financial adviser. The article is for general public consumption only. Please consult your financial adviser when you decide to invest in property.

Thank you for reading.

Government projects creating skills shortages

Post to SinFongChanRE.wix on 11/12/2017 at 11:27 PM
Commenting on “Government projects creating skills shortages”
http://www.theage.com.au/victoria/as-big-as-bolte-government-projects-creating-skills-shortages-treasurer-tim-pallas-says-20171210-h0221y.html

There is light at the end of the tunnel. Well, that’s what many people believe. For those with special skills as mentioned in the linked article, the light is in the tunnel, at the beginning and the end of it.

New infrastructure will create new jobs. These demand professionals of specific fields, as well as labourers.

Will these ever eventuate? Not being cynical, my answer is "I only believe it when I see the finished products".

Thank you for reading.

Furious homeowners share plan horror stories

Post to SinFongChanRE.wix on 11/12/2017 at 11:00 AM
Commenting on “Furious homeowners share plan horror stories”
https://www.dailymail.co.uk/news/article-5163923/Furious-homeowners-share-plan-horror-stories.html

I do not get any financial reward from this FB page - no commission, no kickback, no advertising income, etc. It gives me great pleasure when I receive messages from readers thanking me for taking time writing the informative blogs.

When I started this FB page, my intention was to pass on my knowledge and experience to the readers. Some people don’t like my occasional depressing views and analyses, or disagree with what I write because their good experiences and circumstances are entirely different. For the latter group of people, I am very happy for you.

Compare with many wealthy people, I am just a very contented small fish, without ambition to go for the pot of gold. As long as I won’t be homeless in the future, and have a fair share of travelling abroad and enjoying tasty meals at cafes or restaurants while I am healthy and fit, I am the happiest person in the world.

I am a cautious property investor. I had very good and very bad experiences before. As I always caution my readers, return is directly related the amount of risk involved - higher risk gives higher return, and lower risk lower return.

As one that comes from the school of hard knocks, I understand money does not grow on tree. It is important to work for the money; sometimes I work smartly and save a lot time and effort, but other time I just have to it step-by-step.

You may have read in my concluding phrase in some blogs, “Knowledge is Power”. That’s what I am doing - empowering you to make better decisions when investing in property.

Many people take a lot of time researching when they are about to buy a car, washing machine, or computer. Most laughable incident is that many people drive around to look for a petrol station that discounts petrol at less than a cent per litre, or find a green grocer that saves you a dollar for a few bunches of vegetables, and yet they do not spend time and money to seek independent professional advice or improve their knowledge from websites or blogs like mine, before signing on the dotted line of a sale contract, especially that of the off-the-plan project.

Nothing is worst than making an incorrect decision in buying a property, especially for own dwelling. It is not just about losing a lot of money, but it also affects the owners’ mental and physical health, family breakdown, and a lot of other financial sacrifices.

The main reason I entered the real estate industry was to prove that I was not the same as others in the industry. I think my blogs are my own testimony.

If you think this FB page can help your friends in making better decision in investing in property, please do them a favour by sharing the page or relevant blogs with them. But remember to consult a professional financial adviser for your investment needs, because I am NOT qualified to do so.

Thank you for reading.

First-home buyers driving apartment sales

Post to SinFongChanRE.wix on 11/12/2017 at 3:01 AM
Commenting on “First-home buyers driving apartment sales”
https://www.domain.com.au/news/melbourne-auctions-firsthome-buyers-driving-apartment-sales-20171210-h025js/

I do sincerely hope that some of these apartments sold do not have the unsafe cladding, or else the purchase will be a double whammy for these first home buyers.

Some apartments may increase in value but most will not. As more and more apartments come to the market, the existing apartments get older and older and devalue or depreciate more and more. Although the interior can be improved by individual owners, the cost of improving the exterior may not be so easy without the rest of owners' approval via the owner's corporation.

For landed property, the building may depreciate but the land value, in almost all cases, will increase. The more landed properties are built, less land will be available for construction. Scarcity pushes the price up.

Gone are the days when Council rate is based on Site Value (SV). It is now based on Capital Improved Value (CIV). The advantage of the former method is that apartments occupy less land, and therefore the rates are much less. CIV is SV plus the cost of apartment valued by the Council. To add salt to the wound, apartment owners have to incur owner's corporation fee. The bigger the foyer, more facilities available such as gym, swimming pool, library, lift, etc., the more out-of-pocket expenses are required.

Many people are happy with apartment living, but do think twice if it is part of your investment portfolio. Do consult your financial adviser and get the number crunched before signing on the sale contract dotted line.

Thank you for reading.

The brutal reality of Australia's franchise king

Post to SinFongChanRE.wix on 9/12/2017 at 10:58 PM
Commenting on “The brutal reality of Australia's franchise king”
http://www.theage.com.au/business/retail/cup-of-sorrow-the-brutal-reality-of-australias-franchise-king-20171207-h00lbl.html

A few weeks ago, I had a "discussion" with a reader about small business operators running brick-and-mortar outlets. I believe that many of these are either owned by migrants or people who can’t find employment except to become bosses. My views have not changed.

For years, I disagree with the official ABS data of unemployment rate, because the definition of employment is absolute rubbish. Any person who receives pay for 1 hour work during the survey period is considered as being employed.

A couple of new migrants had approached me when they were looking for business opportunities. After doing some simple calculations, I found the sums not stacking up and they were convinced, if they were to follow the laws and tax obligation, they would work for nothing except for the benefit of the owners of the premises or franchisors. They would also lose something thing very precious to them called the “family”.

Those who have not own or run a business before, whether a small, medium or large business, coming to start one in Australia will face a lot of challenges. Given that they may have the money to kick start the business, they still need very supportive people around them, especially for those with young families.

If you are one of the volunteers collecting unsold bread from Bakers Delights or Brumby’s for the church or underprivileged, you wonder who in the world with a bit of grey matter in the brain would throw away such big amount of bread each day. In name, these could be written off from the business operation, but isn’t it better the money goes to the Profit at the bottomline in the Profit and Loss Statement?

Many business operators have been misguided it is ok to make or declare losses for the first couple of years. This is nonsense. Some may argue that these are just paper losses. Two years is two years too long and too precious to lose. Unlike property investment, in two years time, there may be more similar business entrances or players in the area, and your hope to gain a foothold in the market may just disappear.

For some migrant friends who want to start a business, ask yourself the question - can you or someone you know or trust help you market your products or services? Without sales, you have no income.

Equally important to understand is the amount of outgoings. The major one is rent. If you are a one-man band or husband-and-wife team that you may survive initially with minimum withdrawings from the business; otherwise staff wages are going to chew up all that you’ve earned, and make you see red in the financial report.

Do consider kick start with a home-base business, and let your legs not fingers do the walking. Unless you intend to run an online business, the real clients are out there in the shops, offices and in the streets, not just in the Cyberspace.

Many people think that they need thick skin to “sell” things, but I can assure you, to be successful in sales, you need the right mindset. You need to ask the question from the target audience’s perspective, “What’s In It For Me” WII-FM - the FM station you must tune in mentally all the time!

I appreciate if you can leave me a message or comment so that I know I am getting results from what I have been “preaching / teaching” - reaching the right target audience!

Thank you for reading

Demand for land to weaken

Post to Facebook on 7/12/2017 at 8:53 PM
Commenting on “Demand for land to weaken”
https://www.domain.com.au/news/demand-for-land-to-weaken-as-people-set-to-take-advantage-of-lower-apartment-prices-bis-oxford-economics-20171207-h00142/

I have been asking you to be patient, and not to rush in to buy in the recent heated property market.

Prices tend to to go up when people rush in to buy and create the unnecessary hype. A hot market favours the sellers, not the buyers.

I still believe further fall is inevitable, and will continue for another few months, likely to the end of April.

When you buy house-and-land package, be sure you read the fine print, so that you have the fund ready when construction commences.

If you are buying land only, you do not have the benefits of the grant and rental income return, but then there are other trade-offs, such as affordable outlay, less rates to pay, and if you have read my previous posts, you may be relieved not having to deal with tenants from hell.

For the First Home Buyer, you can buy first investment “home” and then move to the suburb of your choice a year later. When you do that, it does not mean you have to buy another house. You can use the rental to pay for the first “home” while you rent somewhere you like but may not have the money to buy it.

You need to be objective about your financial decision, and since I am not a qualified financial advisor, I cannot give you specific investment advice.

Thank you you for reading.

Termites, rising damp and asbestos: The three worst problems home buyers dread

Post to Facebook on 7/12/2017 at 3:08 PM
Commenting on “Termites, rising damp and asbestos: The three worst problems home buyers dread”
https://www.domain.com.au/advice/termites-rising-damp-and-asbestos-the-three-worst-problems-home-buyers-dread-20171206-gzwu1d/

I have written many times that I am a pessimistic optimist. I look at things from a pessimistic perspective, find solutions to overcome the anticipated problems before proceeding with the next move. I know then, optimistically, there will not be any outstanding problems I can’t tackle with.

The following link is very useful, and please take time to read it. Even I don’t claim to be an expert in everything, because new things, new problems and new solutions keep popping up each day. I try to keep myself as up-to-date as possible with my knowledge.

When you buy a house that sounds too ridiculous, too good to be true, don’t Walk away. It may be a good deal, provided you know what the inherent problems it comes with, and how much you need to fix them.

Look for the problems, workout various possible solutions, and it money within your budget can use to fix it, then fix it. However, don’t let emotion overrides your decision, otherwise you’ll buying an endless bundle of headache and heartache.

If you find my posts or this FB page useful, share with your friends.

Thank you for reading.

Turning your house into a home

Post to Facebook on 7/12/2017 at 2:34 PM
Commenting on “Turning your house into a home”

Many people hate gardening. What about you? Australia gives me many good things - good quality air, clean and tasteless water (esp. Melbourne), and many opportunities - to live in peace not having to face wars, gain my education, buy a house I call home, etc.

My wife worked three jobs and I two to kick start our home owning ”project”. The first one was not a big house, and my knowledge of gardening was limited, and yet my wife and I established a landscape garden for the front and just some flower beds at the back.

A few years later, we had a house built to our design. It was quite a project to landscape the front and back by ourselves. The only help we had was to hire a bobcat operator for 4 hours to level and contour the land, and placed the larger rocks in position. It took a couple of years to finish the landscaping job, but it was spectacular.

I am a self-train Jack of many trades. I still like landscaping. Although I am a slow worker, the result justifies the means.

For the new and not so new migrants, it is not how big the house you own and live in. It is how you turn that house into a home.

Thank you for reading.