Understanding the different types of properties

Show notes

Elaine Davies is the Founder of New Road Property, a boutique buyers agency based in Sydney. You may remember Elaine from our previous episode, ‘The mistakes most first home buyers make (and how to avoid them!)’.

In this episode, Elaine takes us back to basics, and breaks down everything you need to know about the different kinds of properties you might buy. She’ll explain what all of your options are when it comes to property types and how they’re defined, and share her biggest tips for deciding what kind of property is the best option for your first home.

Transcript

Michael 0:00
the information contained in this podcast is general in nature and is not to be taken as financial or personal advice.

Michael 0:06
It does not consider your objectives, financial situation or needs.

Michael 0:10
You should consider whether this information is suitable for you and your personal circumstances before acting on it.

Michael 0:17
Hi and welcome to the home Run your guide to buying the first home in Australia.

Michael 0:21
On the show.

Michael 0:22
I’ll walk you through the home-buying process from every angle we cover the steps to take the pitfalls to avoid and the answers to all your questions you’ve been dying to ask.

Michael 0:31
No matter what stage you’re at, you’ll learn everything you need to know about buying your first home.

Michael 0:35
I’m your host, Michael Nasser, and I’m a mortgage broker at Lendstreet, and I really love helping people buy their first home.

Michael 0:45
Elaine is the founder of New Road Property, a boutique buyers agency based in Sydney.

Michael 0:51
You may remember Elaine from the last time she was on the show, where she shared the biggest mistakes many first-home buyers make and how to avoid them.

Michael 0:59
In this episode, we’re going back to basics and breaking down everything you need to know about the different kinds of properties you might buy.

Michael 1:07
Elaine will explain what your options are When it comes to property types, she’ll breakdown how to define everything.

Michael 1:14
Plus, Elaine shares her tips to help you make the best decision for what type of property you should buy for your first home.

Michael 1:21
I hope you enjoy today’s conversation.

Michael 1:23
Let’s jump in.

Michael 1:27
Elaine.

Michael 1:28
Welcome back to the show.

Elaine 1:29
Thank you, Michael.

Elaine 1:30
It’s an absolute pleasure to be here.

Elaine 1:31
Thank you.

Michael 1:32
So this is your second appearance on the show.

Michael 1:34
And I know you know a lot about property in Australia, but I wanna start out with a fun question before we dive into today’s topic.

Michael 1:40
If you could live anywhere else in the world other than Australia, where would you live?

Elaine 1:44
Oh, I’ve never been to Greece and I’m obsessed with Greece at the moment.

Elaine 1:48
You know those pretty islands where you see the white buildings?

Elaine 1:52
Is it Ozo?

Elaine1:52
I wanna drink Ozo and eat Greek food and not south of France.

Elaine 1:56
Spain.

Elaine 1:57
I’d like to live in Spain as well.

Michael 1:58
Cool.

Michael 1:59
We’re going to do something a little bit different today, and something that I think can be really beneficial for our listeners.

Michael 2:03
We’re gonna talk about all the different kinds of properties that exist, and I really want to go back to basics here.

Michael 2:08
So we’re answering some seemingly obvious questions, but it will be really valuable if we can get you to explain and define them as well as talking about some of the pros and cons of each.

Michael 2:18
We’re gonna get in some fundamentals of what type of assets we really deal with.

Michael 2:23
When it comes to purchasing property, Let’s start off with the most obvious and what people generally think of the most, houses.

Michael 2:30
So this might sound like a stupid question, but what actually makes a house a house?

Elaine 2:34
What we think of as a house is that it’s torrent title and you own the land it sits on.

Elaine 2:40
So you’re not just buying the bricks and mortar you’re buying the land.

Elaine 2:44
Yeah, that it sits on, and that means you’ve got more freedom to do what you want with it.

Elaine 2:49
Obviously, you have to have cancelled approval to change it, but there’s no and I know we’re gonna go on to strata, but there’s no strata to negotiate with you.

Elaine 2:57
Still got to get your drawings drawn up and get the neighbours and everyone to agree to what you change.

Elaine 3:02
But fundamentally, you can do what you want to it.

Elaine 3:05
So you own the whole lot.

Michael 3:07
And what are the qualities of a house like?

Michael 3:09
I mean, when we think of a house, what does it generally comprise of like, what’s a house made of?

Elaine 3:13
So a piece of land, then bricks and mortar that makes up usually a square shape.

Elaine 3:19
It can be one level or two levels, so we have different names for those we can call them bungalows, they all kinds of things.

Elaine 3:25
But it’s a house.

Elaine 3:26
It doesn’t matter if it’s one level two levels or three or four.

Elaine 3:29
If one person owns it and it’s one title sitting on land, it’s a house.

Michael 3:34
If we’re gonna think then of the pros and cons of purchasing a house, what would be the biggest pros and positives?

Michael 3:39
And alternatively, what would be the biggest negatives or downsides of buying a house?

Elaine 3:43
So I think emotionally everybody wants to buy a house.

Elaine 3:47
They feel they want to own the land.

Elaine 3:50
So the second you walk in the gate in that picket fence or whatever the fencing is, and you walk up your path and you put your key in the door, you own it all.

Elaine 3:58
So I think there’s a lot of emotional attachment, especially in Australia, about this house.

Elaine 4:03
The other pro is what I just said.

Elaine 4:05
You can do anything that you want to it within reason within council.

Elaine 4:08
But there’s no strata or anybody else within that property telling you what to do.

Elaine 4:14
You can definitely paint your door any colour you want.

Elaine 4:17
There is nothing stopping you doing that.

Elaine 4:19
There’s also nothing stopping the neighbour going to cancel and complaining.

Elaine 4:22
But it’d be very difficult because you own it.

Elaine 4:25
Yeah, it’s your house to do with as you please.

Michael 4:28
Yeah, And that’s probably a line to the old Aussie dream of, you know we all have aspirations to, and an obsession with property and property for us is generally land.

Michael 4:36
I guess that’s what we think about and that that is changing.

Michael 4:38
What are some of the the negatives, perhaps, of owning a house?

Elaine 4:43
Anything that goes wrong, it’s on you, so there’s no one else with you, So if the roof goes, you come up with the money for that roof.

Elaine 4:49
If there’s subsides, you come up with a there’s no you’re on your own, you know, and they don’t come up as much.

Elaine 4:55
People are so caught up in buying houses, they can easily buy the wrong one.

Elaine 5:00
So you always need to think the long term Will this ever turn into an investment?

Elaine 5:04
Maybe it won’t.

Elaine 5:05
But I always think about that.

Elaine 5:07
What am I gonna do with this property in the long term?

Elaine 5:09
The other downside is that they are more expensive.

Elaine 5:12
So if you’re determined to buy a house, your lifestyle might be compromised.

Elaine 5:16
If you’re determined to buy a house, they are more expensive because you’re buying the land as well as the building.

Elaine 5:22
So your lifestyle might be compromised if you’re determined to go down that path with a smaller budget.

Michael 5:29
Strata Properties so that’s the alternative, and we need to talk a little bit about that.

Michael 5:32
To put everything into context.

Michael 5:33
Apartments are probably one of the most common types of properties that fall into a Strada property.

Michael 5:38
There seems to be a lot of different words for apartments.

Michael 5:41
What are some of those words and what are the differences between them?

Elaine 5:45
Well, we tend to use unit in Australia and buy a unit.

Elaine 5:49
Well, maybe we use apartments as well.

Elaine 5:51
In the UK, it’s flat.

Elaine 5:53
I live in a flat.

Elaine 5:54
It’s condo in America, isn’t it?

Michael 5:56
Yeah, and we use apartments, units and flats, I guess, is so it’d be interchangeable.

Michael 6:00
That word it.

Michael 6:01
I guess it does it mean the same thing.

Elaine 6:02
It means exactly the same thing.

Elaine 6:04
The only word that’s different is studio, and that’s one room where there’s no separate bedroom.

Michael 6:10
So that’s a studio one room, so there’s no separate bedroom, living and everything.

Michael 6:13
Kitchen is all in one space.

Michael 6:15
One communal space.

Elaine 6:16
Yeah, the bathroom is separate.

Michael 6:18
There are obviously implications when it comes to loans with those studio apartments, too, because they’re generally a little bit smaller than one bedroom and two bedroom units.

Michael 6:25
So this word strata we hear about it a lot.

Michael 6:27
Obviously, it’s related to units and flats and apartments and townhouses, and we didn’t really touch on townhouses.

Michael 6:33
What’s the difference between a townhouse and an apartment?

Elaine 6:35
It’s a townhouse is a double level unit.

Elaine 6:38
It’s still within a strata complex, so when you buy an apartment, you buy the air inside.

Elaine 6:45
That’s really all you’re buying.

Elaine 6:46
Some are different in that Some you are responsible for the balconies and the doors that some strata companies that you are literally just buying the air inside.

Elaine 6:55
Which is why you can’t do anything to them without going to the strata committee and asking permission.

Elaine 7:01
So in a strata company, if I needed a strata apartment, if I wanted to bring a wall down between my living room and my kitchen, I would need to apply to strata as well as council.

Michael 7:12
It’s almost like a governing body for that building complex.

Michael 7:15
Would that be a way to think of it?

Elaine 7:17
Yes.

Elaine 7:17
And within that complex, you’d have about 6 to 8 people who are the body corporate committee.

Elaine 7:24
You’d have a treasurer and a and, secretary and a chairman, a usual committee, a quorum, and then they would have running them as strata company.

Elaine 7:35
And that strata company makes sure that the body corporate are paying their insurance that the strata fees are up to date.

Elaine 7:42
So with the strata company, you pay strata fees once a quarter, which I really like, because it’s a way of saving, and the thing with having a house you don’t tend to save for that day for that roof going.

Elaine 7:53
So it’s a few levels.

Elaine 7:55
You’ve got a body corporate, which are people from who own in there and then that body.

Elaine 7:59
Corporate is governed by an outside strata company, and it’s the body corporate that chooses that strata company.

Elaine 8:06
There’s lots of them tonnes, so you have to choose which one you’re gonna work to, and you can sack them, employ new ones.

Elaine 8:12
It’s the body corporate that runs that.

Michael 8:15
And what type of things are they running?

Michael 8:16
What are the type of activities at a strata company?

Michael 8:19
Or, if you’re buying, you know, in strata that these individuals or these groups look after for you?

Elaine 8:22
The gardening, the rubbish, whether that place needs painting if there’s a problem with the building, say building has cancer, which is when concrete cancer, which is where a piece of metal has got rusty, and it has affected the concrete inside, and it it starts to kind of peel away starts to make things, flake away.

Elaine 8:46
Rather so, concrete cancer is a fairly common problem in an older strata well any building, but they will look at that.

Elaine 8:55
And if there’s not enough money in the pot, they will then have to do a special levy.

Elaine 9:00
So you have normal levies.

Elaine 9:02
But then suddenly, if they say, look, this building really needs painting.

Elaine 9:05
The windows are beginning to flake.

Elaine 9:07
We have to get paint on it, but we haven’t got enough money.

Elaine 9:10
Suddenly you’ll be up for two or $3000 each, or it could be more.

Elaine 9:14
But they will work out how much each apartment or unit there can be.

Elaine 9:19
A townhouse needs to pay, and they will say to unit three, You’re a little apartment.

Elaine 9:24
You’re only one bedroom.

Elaine 9:25
You’re gonna be paying 3000.

Elaine 9:27
Or they might say to the penthouse five-bedroom penthouse at the top.

Elaine 9:30
You’re gonna be paying us 5000.

Elaine 9:32
So that’s how the strata fees are split up.

Michael 9:34
You mentioned the pot, if there’s not enough money in the pot, then they’re gonna be raising special levies to cover costs that are incurred with communal sections of the building.

Michael 9:43
What’s the pot?

Michael 9:44
Is there another word for it?

Elaine 9:45
Yeah, so it’s capital funds is the pot is where the money goes in every month, and that’s what you build up.

Elaine 9:51
And then there’s an admin fund as well.

Elaine 9:54
And that’s for the day-to-day running of the building.

Elaine 9:58
So your strata fees are always split into two capital works and admin.

Michael 10:02
And then those strata fees get deposited into those particular accounts.

Michael 10:06
And then, if there is work to be done, then if it’s communal work, then it comes out of those.

Michael 10:12
And that’s why you were referring to it as savings earlier on, because you’re effectively putting money away in the event of a rainy day that there are funds there to get together so you can complete it and again bringing it back to what you were saying earlier about houses.

Michael 10:24
If there is something that’s wrong with the communal areas or something needs to be fixed in the roof or painting, then it gets shared amongst the people within the complex, as opposed to in the house you’re looking after it yourself.

Michael 10:35
Strata is probably, in my experience with first home buyers more often than not, especially in Sydney, and I know we have this in all over Australia, But within Sydney, the first home buyers are more often than not buying in apartment complexes.

Michael 10:45
So is there anything in particular you think?

Michael 10:48
If there’s an individual buying in a strata complex, do you approach that differently to buying to a house?

Michael 10:52
And what would the differences be in?

Michael 10:54
What would you say are the main take-homes or things to keep in mind if you’re buying in a strata complex?

Elaine 10:56
That takes that strata thing to a third level?

Elaine 11:01
So you’ve got your body corporate.

Elaine 11:02
You’ve got the company that runs the body corporate.

Elaine 11:04
And then there’s when you’re buying.

Elaine 11:06
There are companies that put together strata reports, so the person putting together you can do it yourself.

Elaine 11:12
But, my gosh, it’s fiddly.

Elaine 11:13
It means going through all the files.

Elaine 11:16
So there are companies who do strata reports, and they go into the strata company and go through all the minutes, see what’s been spent on the building and how much has been spent the last few years, how much money they have got saved.

Elaine 11:29
So you have to buy a strata report and you have to read through it line by line, and it’s about reading between the lines as well if the building is old and sad and they they haven’t had it painted in 20 years.

Elaine 11:42
Common Sense says that at some stage soon that building is gonna need to be painted, So there will be a special levy coming up.

Elaine 11:50
And I always say to my clients, Right now, there are no special levies.

Elaine 11:53
However, I always suggest you have money put aside for the upkeep of your property.

Elaine 11:58
And that’s definitely in strata because the thing is with a house say the roof blows off, you can actually choose to live without it.

Elaine 12:05
You can make a decision to put a tap over it and go bugger it.

Elaine 12:08
But with strata, it’s out of your control.

Elaine 12:10
If they say this building is being painted, it is being painted.

Michael 12:14
Yeah, you can’t object to it, I guess, if if it’s determined that it needs to be done.

Michael 12:18
So the Strada report when it comes to purchasing.

Michael 12:21
If you’re a first home buyer in a a unit complex or a townhouse complex, where there is strata involved is critical to obtain information.

Michael 12:28
Are there any red flags that one should be looking for?

Michael 12:30
Within that Strata report?

Elaine 12:31
I think It’s really important to read the report properly because they’re big and they’re cumbersome and it’s very easy to go.

Elaine 12:38
Oh, it will be fine.

Elaine 12:40
Never do that and maybe give it to your lawyer and ask them to have a look over as well, like get a second pair of eyes on it.

Elaine 12:48
There are red flags, but there’s also something that you need to get past.

Elaine 12:52
Like if a whole lot of work has been done on the building, it looks scary because it’s like this went wrong.

Elaine 12:58
This work was done.

Elaine 12:59
It’ll all be detailed.

Elaine 13:00
All the invoices from the workers and everything it’s done.

Elaine 13:04
It’s done.

Elaine 13:04
Yeah, you’re better to go into a building where the work is finished than go into something where no work’s ever been done and it looks like a nice, clean strata report.

Elaine 13:14
I mean, and of course, look into it, but it’s better to go in at the tail end.

Elaine 13:19
But the thing to look out for is low strata fees like people go, Oh my God, it’s great.

Elaine 13:24
It’s got low strata fees.

Elaine 13:25
No, that’s not great.

Elaine 13:27
It’s like they a building needs to be looked after and I think even with a a red brick walk-up, you should be paying about 1000 a quarter for sure.

Michael 13:37
What are the biggest pros and cons of buying in strata?

Michael 13:39
And we can maybe look at apartments and then townhouses because they do fall into the same category.

Michael 13:44
But I’m sure they’ve got different pros and cons.

Michael 13:46
So what would be the pros and cons for buying in Australia?

Michael 13:48
Property In an apartment building?

Elaine 13:52
You get more buck for your money. It’s just much easier living there, a lock up, and go off on holiday or anything like that.

Elaine 13:57
But yeah, they’re safer.

Elaine 13:58
They’re cheaper.

Elaine 14:00
You have a team of people around you helping you because they’re cheaper.

Elaine 14:04
You can usually live in a nicer spot at the beach.

Elaine 14:07
Live somewhere where there’s a cafe.

Elaine 14:09
Good schools.

Elaine 14:10
Yeah, they’re just easier living and cheaper.

Michael 14:13
And what would some of the downsides be?

Elaine 14:15
If you get stroppy people on the body corporate, it can be annoying.

Elaine 14:19
And the thing is, you can have bad neighbours with houses as well.

Elaine 14:22
So people do say, Oh, what if you get bad people in the block, you can have yucky neighbours anywhere You can live in a little terrace house with paper thin walls and have terrible neighbours next door, so I don’t tend to worry too much about neighbours.

Elaine 14:34
I think neighbours and neighbours have good or bad anyway, so that doesn’t really worry me either way.

Elaine 14:39
But if there’s a finicky person on the body, corporate and maybe they won’t pass stuff, maybe everyone else is like, No, we really have to get work.

Elaine 14:47
And there’s this one person if it’s a small strata, so a lot of people want to buy in a small strata.

Elaine 14:52
But actually, that can be more awkward, because if you’ve got one awkward person and there’s just four of you, that can be quite painful.

Elaine 14:58
So it’s just a matter of again reading that strata report and seeing.

Elaine 15:02
Has there been any problems?

Elaine 15:04
There will also be how many section in there that will say, if any of the neighbours, if there’s been any disputes in them.

Michael 15:12
Yeah, that strata reports critical, obviously, for a couple of reasons then.

Elaine 15:14
They’re very similar if you’re inside a complex inside a strata complex, you run by the same rules.

Elaine 15:19
You probably pay more strata fees because It’s a townhouse.

Elaine 15:24
Maybe not quite as secure you are, but it’s the same.

Elaine 15:27
There are a lot within a strata.

Michael 15:29
Even if you’ve got a townhouse and there’s a lawn at the front of your townhouse, then that lawn is still part of the strata.

Michael 15:35
Generally is it?

Elaine 15:36
It depends.

Elaine 15:36
It’s the same as a balcony.

Elaine 15:38
It depends whether it’s on title or not.

Elaine 15:41
But if it’s a courtyard, it’s exactly the same as the balconies above you or to the left, to the right.

Elaine 15:47
They’re yours.

Elaine 15:48
But it would be worth checking as to who maintains it, because you don’t actually want someone coming onto your lawn to maintain it.

Elaine 15:55
Just like you don’t want someone coming onto your balcony to maintain it.

Elaine 15:58
So that’s always worth asking.

Elaine 15:59
But no, it’s yours.

Elaine 16:00
It’s on title, and it’s for you to maintain.

Michael 16:04
I guess, shifting away from strata and we spent a bit of time there, and I think it’s important because it is generally the most common type of asset that’s purchased for a first home buyer.

Michael 16:11
Property asset, vacant lots and off the plan.

Michael 16:14
It is relatively taboo for lack of a better word.

Michael 16:16
When we talk about off the plan of just sort of negative media.

Michael 16:19
And rightly or wrongly, it’s definitely in the spotlight, and there is a reluctance for people to buy off the plan.

Michael 16:25
What does it actually mean to buy off the plan?

Elaine 16:27
Well, first of all, I’d like to say this story is in my book.

Elaine 16:30
One of my very close friends made a lot of money buying off plan, and she would buy them and sell them again before the dirt was broken.

Elaine 16:38
There is a way of making money off plan.

Elaine 16:40
You’ve just got to be super careful about what you’re buying.

Elaine 16:43
So off plan means you’re buying a piece of paper if you’re buying off the plan.

Elaine 16:47
So you’re looking at a piece of paper with all those blue lines and the developers going, and they will probably have one of those fancy models of the building.

Elaine 16:56
And then you’ll have the real estate agent slash developer walk you around and go.

Elaine 17:01
This is where yours will be, and so you just got to use your imagination a bit.

Elaine 17:05
And it’s not that you never make money off plan.

Elaine 17:07
It’s just that you often don’t.

Michael 17:10
And why is that? Are there any reasons as to why that’s the case?

Elaine 17:12
So if you buy off plan in Sydney, they’re hugely expensive.

Elaine 17:17
So when you get a a bit of land in Sydney or somebody pulls down an old house, they’re usually in blue chip areas, and then they’re not first homeowners at all.

Elaine 17:24
They’re glamorous, they’re beautiful.

Elaine 17:26
So the things that we can afford off plan are usually high density in not fabulous areas.

Elaine 17:35
Oversupply.

Elaine 17:36
Maybe the developer is not particularly fabulous that we’ve.

Elaine 17:39
We’ve had those terrible problems in Sydney.

Elaine 17:41
But oversupply is the biggest problem, and often developments are ahead of the area, so the infrastructure is not there yet.

Elaine 17:49
The the schools are there yet the jobs aren’t there and the developer will sell you, sell, you, sell you and you probably know this.

Elaine 17:56
But there’s a lot of what I call clips when you’re buying offline so the developer will pay the mortgage broker the lawyer.

Elaine 18:04
There’s a there’s a whole team of them that are paying each other and who pays for all that for the buyer, and you must never get caught up with rent guarantee because when you work out how much that rent is it’s only about 25 grand or something.

Michael 18:18
That is a bit of an illusion.

Michael 18:19
And I actually was speaking to someone during the week about this particular topic about the rental guarantee, and they, unfortunately did take the bait.

Michael 18:26
And for me it’s a bit of a red flag.

Michael 18:28
The property should be good enough in its own right to sell itself.

Michael 18:31
You don’t need any incentive or further incentive beyond the property itself to purchase.

Michael 18:35
So that’s definitely a good tip and something to be sceptical of, if that is being promoted as part of that sales strategy.

Michael 18:42
But I think, yeah, there’s definitely a lot more premiums that are factored into the cost of the planned purchase that you’ve got to be mindful of and not always good against the lack of scarcity that you’ve mentioned, too. I think it’s a great point.

Elaine 18:50
This happened in Chatswood.

Elaine 18:53
If one tower has been built and you’ve got lovely views, in fact, it’s happening in Little Bay right now.

Elaine 18:58
You’ve got lovely views and lovely light.

Elaine 19:00
Why can’t they build another tower in front of you?

Elaine 19:03
Just be really super careful.

Elaine 19:05
If there’s other lots around you, be careful of those empty lots.

Michael 19:09
Yeah, and ultimately you like you say you’re buying a bit of paper and there are also, I’m sure in your contract there probably could be the option for them to vary and change from what you have purchased at, I think there’s a variation clause where they can change to a certain percentage.

Michael 19:23
And so be mindful of that.

Michael 19:24
So you you don’t actually know what you’re getting necessarily.

Michael 19:27
It’s just the paper at this point in time, with the view of it being built by a certain point of time.

Michael 19:31
And I guess there are a lot of, ifs and buts and and maybe when it comes to that, would you agree?

Elaine 19:38
Too many for me. Too many for my little brain.

Michael 19:40
I’m in the same boat.

Elaine 19:41
I know people who’ve bought.

Elaine 19:43
And I’m sure you did do 15 years ago, and that property has not come up because it felt like good buying.

Elaine 19:50
And had they bought the tiniest little thing in Sydney like a tiny little one bedroom in Bondi or somewhere 15 years ago that you know their portfolio, their whole financial future would be completely different.

Michael 20:03
But that leads us to benefits and the pros and the cons of the plan.

Michael 20:07
And I guess if you were to list a few positives, what would they be?

Elaine 20:09
Well, they’re new, They’re sexy, they have, they’re everything’s the washing machines and everything’s brand new.

Elaine 20:15
You know, you walk in and it’s beautiful and light and if it ever gets finished, But you know, that’s the idea that it is like buying a brand new car.

Elaine 20:23
But just like buying a brand new car the second you drive it off the lot, it goes down 10%.

Elaine 20:27
In the best case scenario, Usually, it goes down more so you know, they knew.

Elaine 20:32
I think that’s the only plus, to be honest.

Michael 20:34
Yeah, the downsides are list will be a little bit longer than the pros list.

Michael 20:38
So what would be some of the main downs?

Michael 20:40
And we’ve already mentioned a few of them, but one of them main ones that stick out for you.

Elaine 20:44
The uncertainty, as you said, Are you actually getting what you’re buying?

Elaine 20:47
How good is the developer?

Elaine 20:49
Like the anxiety around it?

Elaine 20:50
There’s so much to think about.

Elaine 20:52
Will it ever complete?

Elaine 20:53
Are you paying the right price or are you paying all the will it come up in value?

Elaine 20:57
You don’t know what you’re buying like.

Elaine 20:59
That’s why I love second hand so much because you know what you’re buying.

Michael 21:02
With the lack of scarcity and the lack of certainty, it definitely isn’t something that we’d be directing first time off the bat.

Michael 21:09
I think you’d be looking at more established and knowing what you’re getting into kind of properties a little bit more manageable and also from the finance point of view, depending on when it’s going to be finished.

Michael 21:17
You don’t need the finance when you leave your deposit.

Michael 21:19
It could be a couple of years down the track and what your situation is.

Michael 21:22
Looks like then.

Elaine 21:23
Oh my God, that’s such a good point.

Elaine 21:25
So when you’re exchanging and sometimes there’s a tiny deposit and then you pay, you know there’s extra money as you got.

Elaine21:31
There are lumps of money to pay, like when when the slab goes down there.

Elaine 21:34
But the main settlement is when the building finishes.

Elaine 21:37
And who knows, maybe a baby has come along and you’re on maternity leave.

Elaine 21:41
Maybe you’ve lost your job completely.

Elaine 21:43
Maybe your partner died.

Elaine 21:44
Maybe you were in a car crash.

Elaine 21:46
So life is linear. Yeah.

Michael 21:48
Totally So, Yeah.

Michael 21:50
Again.

Michael 21:50
Lack of scarcity lack lack of uncertainty.

Michael 21:52
Probably not the preferred method, but everyone’s got their own motives.

Michael 21:55
And it could be something that someone decides is the right thing for them.

Elaine 21:58
If you’re looking for yield and a lot of people say I bought this is a different end of the scale.

Elaine 22:02
I bought them in my super fund and I just needed yield and needed something for my money to go through.

Elaine 22:06
Then I guess there’s a place for them.

Elaine 22:08
But I would hate to see them being bored as a first as a foundation for the rest of your life.

Michael 22:14
And you mentioned your friend that has made some money out of this, and perhaps to the seasoned investor or somebody that’s got a bit of experience and knows what they’re doing.

Michael 22:21
And they’ve got a particular game plan.

Michael 22:23
It might work.

Michael 22:24
Or if there is a bit of a tax incentive or a tax play with negative gearing or whatever it may be that somebody is looking at doing.

Michael 22:30
That’s obviously a particular situation, and it may work but for the concept and for the notion of first home buyers in particular.

Michael 22:37
Probably luckily again, a little bit too uncertain in terms of what’s happening and and then, obviously the stress and everything else that’s related to that.

Elaine 22:44
This is what you get sold.

Elaine 22:45
I always got to appreciate, you know, you’ll have to.

Elaine 22:47
For years we’ve got rent back.

Elaine 22:49
They make it sound so sexy.

Elaine 22:52
But when you work out how much that money is, how much you will make a year from a depreciation schedule and the rent bag, you just need to work out your sums.

Elaine 23:00
It’s not that much.

Michael 23:02
That’s been great.

Michael 23:02
We’ve obviously discussed many, many things and different types of properties between House strata and vacant lots and off plan.

Michael 23:08
What would be your number one tip, you know, in the current market and that currently stand for first home buyers to get into the market?

Michael 23:14
What would your number one tip at the moment be?

Elaine 23:17
Absolutely 100% know what your budget is?

Elaine 23:19
Don’t go shopping for anything, be it a car, a pair of jeans or a property until you know what your budget is, So get your finances sorted know what you’re gonna have to pay in stamp duty.

Elaine 23:30
It’s all in my book.

Elaine 23:32
So there’s a lists and lists and lists of things, and my book is called Mind Body so you can get it on Amazon.

Elaine 23:37
There’s lists and lists of things that you can work out right.

Elaine 23:40
Where exactly is my budget?

Elaine 23:42
Everything that you need to take out of it.

Elaine 23:44
So once you know your budget, understand that in big cities I don’t know about the country that, under quoting, is a given.

Elaine 23:53
So don’t start looking at properties that the real estate agent is saying this is what we’re looking for.

Elaine 23:59
It’s not.

Elaine 24:00
If they’re saying 700,000, it’s 771 for 10%.

Elaine 24:05
It could be 20% in a hot market.

Elaine 24:07
And that’s not necessarily the real estate agents fault that buyer demand but work with 10%.

Elaine 24:12
So if your budget is seven, you need to be looking at properties of 650.

Elaine 24:17
If your budget is eight, you need to be looking at properties of, say, 750 or a little bit below.

Elaine 24:22
Otherwise you’re gonna get very jaded very quickly.

Elaine 24:26
It’s gonna go from that excitement of having your mortgage approved to just being sad and upset.

Elaine 24:32
And the worst thing you can do is not buy, but you need to buy the right thing.

Elaine 24:36
Obviously, buying the wrong property is wrong, too, but people tend to give up.

Elaine 24:40
They do all this work getting pre-approved and they’re so excited.

Elaine 24:43
And then they go out into the Realty of Realty And yeah, they just get overwhelmed and upset because there’s a saying in real estate.

Elaine 24:50
Quote it high, Watch it die, Quote it low, Watch it go It is a given Under quoting is a given.

Michael 24:58
It’s that expectation management that’s got to be addressed.

Elaine 25:03
Your own expectation management but you just have to accept that under quoting is a given because that’s what we’ve done for years.

Elaine 25:08
And if a real estate agent quotes actually what they want, they kind of blow the listing because people expect under quoting now, So they’re stuck between a rock and a hard place, too.

Elaine 25:18
I’ve known agents that have gone right.

Elaine 25:19
We are quoting what we want and people add 10% to go or what I thought you wanted more was like, No, I didn’t.

Elaine 25:25
This is what I wanted, so they’re kind of stuck between a rock and a hard place, too.

Elaine 25:29
So we just have to accept that, under quoting is part of the industry.

Michael 25:33
Agreed. Where can our listeners find you if they want to learn more about what you have to offer?

Elaine 25:36
So my email is elaine@newroadproperty.com.

Elaine 25:43
I’m on Instagram as newroadproperty.

Elaine 25:46
I’m on Facebook as New Road Property and Elaine Davies on Facebook.

Elaine 25:50
So maybe that’s a good way to find me.

Elaine 25:51
Just Elaine Davies on Facebook.

Elaine 25:54
My website is new road property.

Elaine 25:56
My book is Mind body sold on Amazon, which is great for first time.

Elaine 26:01
I give away every single secret about buying properties.

Elaine 26:04
Everything I know is in that book, and I think it’s like something like $18.

Michael 26:09
And those things will also be in the show notes, too.

Michael 26:11
So if everyone wants to check them out, feel free to jump on and and that way you can get the links there to find out, Elaine’s work and get in touch with her if you want to.

Michael 26:17
But Elaine, thank you so much for joining me today.

Michael 26:20
I hope you had a good time.

Michael 26:20
And, as always, thank you for your insights.

Michael 26:22
It’s been really great having you on the show today.

Elaine 26:24
Thank you so much.

Elaine 26:25
And please do reach out.

Elaine 26:27
I know how tough it is out there on your and I’m here to help.

Elaine 26:30
I’d love to help.

Elaine 26:31
And Michael, it’s been a pleasure.

Elaine 26:33
I love talking to you.

Michael 26:34
Awesome.

Michael 26:35
Alright, Elaine.

Michael 26:35
Well, thank you very much again.

26:37
Appreciate it.

Michael 26:40
You’ve been listening to the home run your guide for buying your first home in Australia.

Michael 26:44
This podcast was produced by Lendstreet.

Michael 26:46
Lendstreet is a mortgage broker and home loan specialist that helps first-home buyers find the right loan to meet their needs.

Michael 26:52
We know applying for a loan can be overwhelming and complex.

Michael 26:55
So we help guide and support first home buyers through the process from start to finish.

Michael 27:00
To find out more, head to our website lendstreet.com.au.

Michael 27:04
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Michael 27:09
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Michael 27:12
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Michael 27:15
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Michael 27:18
I’m Michael Nasser, and we’ll be back next episode, covering another step on the journey to owning your first home.