- Hello and welcome to episode 102 of Rewarding Property Decisions. Jarrod's away this week. So responsibility for this week's episode falls to me, Jordan Telfer, and my colleague Brenton Potter. - Hey, Jordan. - How are you, BP? - Good, how are you? - Good, good. We thought we'd revert to a, an occasional podcast theme, and that's a question and opinion given that we've, no, I wouldn't say been inundated, but we've had a number of questions put to us, good questions put to us by clients in recent weeks and also listeners to the podcast. And that might be a function of the Melbourne market just starting to get a little bit of a spark to it. And people's thoughts are, we're finding, turning to all things property related. So there've been some good ones that have come in and we thought we'd just run through as many as we can in the time we've got and hopefully these will be of interest. So I think first things first, BP we'll run with, or one from Daniel from Ascot Vale. - Yep. - And his question to us was, what should I focus on during a final inspection before settlement? - Yeah. - Which is a good one. It's one thing that a lot of people do, don't give much thought to. During a purchase, there's an entitlement to an inspection, a pre-settlement inspection before you take hold of the keys and hold of the property at settlement. And there are certain things that do need to be considered. So I'll let you run with it. - Yeah, absolutely, thanks, Jordan. I mean, I think the most important part for the pre-settlement inspection for purchases is that is the property in the same condition that it was on the date of sale, whether that was at auction or a private sale that I bought it, so. - And that's the purpose of it, isn't it? - Yeah. - It's just to, just to ensure, yeah. That the client or the purchaser is actually, is buying what they. - Absolutely. - What they thought they were. Because settlement can be anything from 30 days, 60, 90 as much as 120. - Yeah, we just did one the other day, which was a six month. - Yeah. - Settlement that worked out for both sides. And then it's about you're entitled to a pre-settlement inspection seven days prior to settlement. I would always recommend clients review or check, get the appliances checked. So if utilities are on. - [Jordan] Yeah. - Then that, you know, involves, you know, cooktops and electricity and lights for example, - That's assuming, of course, that those appliances were in working order. - Yes. - And that's at the date of purchase. So that's something that should be checked, absolutely. - Yeah, so. And then on that front as well, I mean, there's a fine balance between getting your phone charger and walking around to every power point in each room and testing if it works. But as you said, you know, the appliances that we're looking at, you want to make sure you've tested them out before unless we're buying a brand new house with brand new appliances. - [Jordan] Yeah. - In them as well, so. What I tend to do if I'm doing this on behalf of clients, particularly our clients that we purchased for that might be interstate or overseas and can't actually get to the pre resettlement inspection, I'll take out with me a copy of the particulars of sale page of the contract. So that will list the chattels that are to remain. - [Brenton] Yeah. - We don't want to get all the way out to the property and find that, hang on a second, the dishwasher's missing. Was that an exclusion of the chattels or has the owner taken that out and it should have remained? - It's a very good point. - And sometimes it can be a bit of a grey area dishwasher. Sometimes people view that as a piece of furniture that they pull out. It's not plumbed in as such, you can just pull it out. So you've gotta keep an eye on that. That's probably the one appliance that if you're going to come a cropper, of course, you want to make sure too that there's been no significant change to the property in that if there's been three or four months that have elapsed since purchase and it's vacant when at purchase, very unusual. Never had this situation myself, but you just never know if there's been a cracked tile, a terracotta tile, water's come in and over those three or four months particularly over winter, has it damaged the ceiling? Is there a bow in the ceiling in the living room that has just emerged? And so I suppose that a reference back to the photographs at the online advertising at the time of purchase is very handy as well to substantiate the condition of the property - Yeah. - At purchase, I guess in terms of timing. - Yeah. - Just to finish on this one, timing, we've got some views as to when that should be done. - Yeah, I mean, you've got, within seven days before settlement, you don't want to be leaving it to the last day in case there are, you know, touch wood there's not. But if there are any concerns, you want to be having a discussion with your solicitor about that. If you leave it the last day, it then delays settlement, can cause other costs or other costs can be involved then. So really, you know, normally that four or three days before settlement we like probably at a minimum to get through and inspect. As we do it for clients as well, if they're interstate overseas, we assist with obviously our correspondence, but also taking a walkthrough video for reference too, for the client. - Yeah. And I think you you want to get that sweet spot in terms of timing. You're entitled to it seven days before, but don't don't walk through on the seventh day because as unusual as it is, as unlikely as it is, most people are very, very good. You probably want to give people, minimise the opportunity for people to strip the property out. - [Brenton] Yeah. - Close to the date of settlement. So you do it on the seventh day, they've got pretty much a week to, you know, if they're that way inclined to be stripping the appliances out, you settle, you get the keys, you walk in. - [Brenton] Yeah. - The money's already transferred. It's very difficult then to chase that back up. And there could be something as simple as, well in those seven days, you never know, a branch of a tree could fall on the roof. - Yeah. - So there's a sweet spot there. So I'm hoping that, Daniel, that answers your question and we'll move on to Liam from Sydney actually. And Liam asks, or it says in one of your podcasts you mentioned buying a property typical of that area. I'm not sure which podcast Liam was referencing there, but I'm sure that, yeah, back in the library there would be, there'd be, we've covered that. And goes on to ask, why is this so important. And yeah, there's no specifics there from Liam's question, but we can certainly reference that anyway. Yeah, kick it off mate. We've had a chat about this. - Yeah, I think, I mean in terms of the question there, it's around what's, what's typically in one suburb may not be, or acceptable I guess, for the buying standards may not be for other suburbs and buying markets. So for an example, if we are focusing on inner city terrace homes, which is, which we do quite a bit for investment, I know that if I'm in North Carlton, probably the buying expectation is if I'm buying an inner city terrace home in North Carlton, it would be, you know, the construction would be brick. - Yeah. And just for the reference here, Liam being from Sydney. - Yeah. - May or may not know the geography of Melbourne North Carlton being a city fringe suburb. - [Brenton] Yeah. - Directly north of the city. - Yeah. - Characterised by predominantly Victorian era, brick Victorian era terrace homes. - Yeah. - Mostly single level, some double story. It's quite a premium suburb in Melbourne And yes, mostly they're brick. Every now and again you do find some timber, weatherboards. - Yeah. - Yeah. - So as compared to if you were to go a little bit further north, say around Thornbury, there's a little bit more of a mix of, you know, you can get some brick terrace homes there, but also weatherboard ones too. And the buying market, it's not as much of an expectation that if I'm buying in that area, that I'm going to be buying a brick home, so to speak. - Yeah, so in those areas, we tend to, we tend to avoid the, those timber homes in those core inner suburban areas, those city fringe suburbs that tended to be, when they were developed it was brick. As you said, there's some suburbs dotted throughout Melbourne and some are traditionally or historically working class suburbs, others like Hawthorn, it's generally been a very, very prime suburb of eastern suburban Melbourne. You get a nice mixture of brick and timber. - You do. - And it's not an issue. And Kensington in the northwest is the same brick and timber. There are always exceptions. And that's not to say that a suburb with predominantly brick, the odd timber home isn't going to work. A good example of one that sold in the last year or so, a timber home in Alfred Crescent. - [Brenton] Yep. - In Fitzroy north, opposite Edinburgh Gardens, a named street. Funnily enough, there's a little timber home there. It sold, it met with competition and sold. So there's always exceptions, but just as a rule, particularly when we're buying for investors and our investor clients, yeah, that is important. So that's probably what we were referring to there, Liam. Other elements of a property that might be regarded typical in one area or atypical in another would be. - Oh, like streetscape, for example. - Yeah. - That could be one. I mean we always talk about, and I'm mentioning in the north again, but Brunswick, where you can get a bit of, you know, some streets can be quite mixed in their streetscape. You can have, you know, single front Victorian homes, contemporary townhouses, 1980s brick veneer homes all on the one street. - Yeah. - And I think the buying market there. - It's accepted really, isn't it? - But if I was to potentially look at, in the same, in a street, maybe in a part of Stonnington in Melbourne south east, that may not be as accepted in that part of town. - Armadale. - Yeah, you're right, around Armadale, yeah. - Yeah, and probably to that as well, we find that the expectations in those as probably higher end parts of Melbourne might be for a central bathroom. - [Brenton] Yeah. - And that's great if you can have a, a typical single fronted cottage, if you've got bedroom, bedroom, central bathroom, all that's ideal. Bathroom at the back of areas like in South Yarra, Armadale, Prahran at the rear side of the kitchen, that can be viewed a little harshly, I suppose. - Okay. - Whereas, again, in Brunswick is a good example, people don't batter an eyelid at that. - Yeah, I've noticed that with my open for inspection numbers. Again, getting through, certainly it's, it's a lot more accepted in that northern section that in the northern section versus probably the south east. - To have bathrooms at the rear and sometimes off the kitchen. So yeah. So that's where, it's horses for courses. It's knowing what's accepted in a particular suburb for a particular buying market at a particular budget and trying to appeal to the widest, the widest possible market within that area. So we'll move on. We've probably got about, we've got, yeah, a few questions to run through here. Jenny from Albury asked, in your villa unit podcast, you briefly mentioned some suburbs that typically have quality villa units. Would areas would you consider the best and why? So being Melbourne based, in a Melbourne context, so some of those suburbs that offer the best quality. If we're looking at it from, from particularly if we're putting the goggles on for working for our investor clients. - Yeah. - I would say Eastern suburbs. - Yeah, I mean in my experience just with getting through a number of villa units when you were talking higher quality or higher end, it's those Eastern suburbs, so suburbs for example, like Surrey Hills, Mont Albert. - Camberwell. - Camberwell. - And when we say villa units, particularly different parts of the country might have different, a description for these types of property. - That's right, yeah. - They're single level, there's sort of that quasi, not quite an apartment, not quite a house. So the better developments have lower numbers, so there might only be four or six within a block. Probably the more entry level villa units that can be up as much as what, 12, 18? Something like that. - Yeah, I mean I remember some parts, going through some blocks, you know. It was a number of years ago, but around Glen Huntly and Carnegie and that part of town sometimes some of those streets can have quite a number of units in there. And I remember meeting the agent at a property and just looking at the driveway and the strip just to meet the agent was about, you know, 20 or 30 metres deep just to get down to the actual unit that we're considering or looking at so. - [Jordan] It's been going and going. - Yeah. - So that's, again, scarcity comes back to it as well. So that's why we tend to concentrate on those inner eastern areas. The quality tends to be better. So when we say that that's the floor plans, our courtyards tend to be a little bit more generous, typified by the car parking entitlements have garages, rather than if you are looking. - That angle parking - Yeah. The angled, undercover sort of squeezy carports up one side of the block. So it's probably applying the same sorts of, that same sort of thinking and considerations as we would if it was a normal apartment or a house or something of the like. So it's wanting to be close, in close proximity to the sorts of features that people are looking for and value in that particular part of the world, so that's. - Another one which I can't remember if you just touched on as well, but in terms of the floor plan, like the proper entrance hall separation from living in dining areas to the bedrooms versus. - Walking straight into the lounge room. - Yeah. - Those sorts of things. - Or the bedrooms coming off the living zone because you're cramped for space there. - Yeah. - And probably getting back to Jenny's specific question, which areas would you consider the best and why? Inner eastern, closer in as possible, because you do tend to find yourself closer to schools, parks, village shopping strips, Union Road Surrey Hills is a good example. And as Jarrod mentioned at some point a while ago, and I thought, yeah, you're right, Melbourne's train network for instance. - [Brenton] Yeah. - Runs in a radial fashion. So you tend to find the further out you go, the further the distance is to a train station as they sort of fan out from the city centre. So for instance, Surrey Hills is, you've got very good proximity to a train station. - Yeah. - Go out another few Ks say into Burwood. - You can get some isolated pockets there. - You can get isolated, yeah. And you're not, and you're just not as conveniently located to those attributes. - So yeah, that's right. And I mean, again, depends on the purpose of the purchase, but we want to make sure we get that walkability score that, you know, walking distance to the village and the cafes and shops, rail transport. We want to make sure we get that right. - Yeah. - As well as the block that we want, that we're buying in as well. - Yeah. - Yeah. - Yeah, so I hope that, I hope that helps there, Jenny. Now if we look at a couple of other questions, Rosemary from Elwood. The question, I need to reduce the cost to sell my property, I'm considering not styling or cutting back on marketing. Which do you think is more important to do? So either style the property or make sure, make sure the usual marketing is spent? - Yeah, it's an interesting one because I mean, you know, I think, I mean they're both important, but without marketing, it doesn't matter if you style your property. - Yeah. You can style it all your life, but if people don't dunno about it, they're not going to get there, so. - Yeah. - Yeah. - And there's various ways to that. I mean the, I guess the two big platforms domain and REIA and the type of package that is involved with with that, that's really important. But we have noticed, and again, this is probably specific to certain types of property and depending on the market that you are or the audience that you is going to potentially buy your property when marketing, some agents are more now using social media, TikTok and Instagram to market properties. - And quite successfully. - Yeah, and that can be a cost effective way to market your property. - Yeah. - But again, I dunno, it's case by case because I don't know if I had a, you know, a three or four bedroom home in Ivanhoe, for example, you know, I'm going to just be marketing my property on TikTok or Instagram. I'm not sure how successful that would be. - Yeah, we've dipped a toe in the water with agents who have engaged on behalf of our clients to sell their properties, and particularly those first home buyer properties, flats and apartments. - Yeah. - Certain, you know, age group are very much tuned into that. Others aren't as much. And the results have been really good. So that can be a cheaper way if you were looking to cut back on your marketing to maybe get the best bang for buck, so to speak. On the other side of things though, with styling, if we're looking at that, how could you save money there? Well, interestingly enough, just come from a client's property today, met the stylist out there and client's going to move out for the duration of the campaign, which is great. So we've got free reign to get with the agent to be getting people through, prospective purchases through, but the question was, I mean, she's got love. It's a lovely apartment, dual level apartment, furnished it. She's got, furnished it really nicely. Doesn't need all the furniture in moving out, but what remains. Can we keep some there or does it all have to come out and then new styling furniture come in? And the stylist was great as well and she looked at it and thought, well no, the bed can remain. It's a nice bed. It's the right size for the room. And then perhaps just furnish, or puts some throws and, you know, cushions and all the rest of it across there. Bring in some artwork to put on the wall. There's a dining table that's good for the space, but probably a bit over-furnished with about eight chairs. So we will remove some of those, thin some of those out. And that's going to reduce the cost for the client, because we don't have to have everything just going out and everything come back in. So there's potentially ways of keeping some of your furniture there to minimise the cost. - Yeah. - In the event that you're moving out, obviously stylists don't want you to use that furniture and you wouldn't recommend it anyway. So that's a way of perhaps minimising it. If the furniture matches the property itself, the style, it's not cluttered and in good enough condition, that's an opportunity as well. So you could probably do a bit of both just fiddle around with the cost of the marketing, fiddle around with cost of the styling, still get the same result. - Yeah. - Hopefully. And yeah, try to save some money that way. - Yeah, and I think it's important, even like, it doesn't matter what era of home you have, I think if you were, with styling, it's about, it's about just giving it that lift and for the particular buyers who are walking through to say, okay, well this is what my potential furniture is going to look like in here. - It is important. - Yeah. - Homes without styling, that can look soulless. A bit cavernous. And sometimes you need, a lot of the times you need to actually guide the purchaser and, you know, use, so they don't have to use their imagination as to where the couch goes and does my bed fit and these sorts of things. So it seems a bit superfluous or a bit of a luxury to be spending that money, but it is very effective. You do notice the difference, don't you? - Yeah, absolutely. - Few more questions, Ari from Sydney. So we've got a few from New South Wales actually, which is interesting. - We're seeing value in the market. - Yeah, yeah, that's true actually. I've identified an investment property near a large vacant block. How risky is it to buy a property not knowing what might be built next door? Well, yes, there's risk. There's always risk and that risk is what goes up next door might be, incongruous for the area, it might be a bit of an eyesore. More to the point I suppose, people are concerned about perhaps a multi-level property going up that will impact your privacy, overshadowing, those sorts of things. We come across this pretty regularly. BP, what would you suggest? - Yeah. - The answers there? - Another thing in terms of, as you mentioned overshadowing. Yeah, how's that going to affect natural light into the rooms with this new development may may be coming up. So, I mean, I'd always recommend where you can do your research with or speak to the local council. If you can find if there's plans there and approve plans, then absolutely, that will give you a starting point. It does come down to personal taste. I mean, if I'm buying for myself personally and I see a vacant block, I would want to see plans and I would want to see a frame up at least before I would dip my toe in. - Comfortable, yeah. - Yeah, yeah. To that point, I suppose it's the uncertainty that is usually the, that's more of an issue usually than what the finished product is. But look, if there's nothing, and it could be, and oftentimes you see this a vacant block of land and it's been vacant for many, many years and nothing's happened. Well, it could still be vacant in 20 years time or unbeknownst to you when you're purchasing, the owner of that next door property in two weeks time after you settle, could then get the ball rolling to develop that site. You just don't know. So that's where the uncertainty kicks in. All you can do really, if there's no hints from council as to what any, if there've been any plans that have been lodged, all you can do is probably look at it and try to get some clues as to well what could go up? So what's happening in street? - Happening in the street. - Yeah, are they, are they predominantly single, single residences or are there multi-unit sites? So perhaps townhouses that are over two or three levels or two or three on the site. You know, does it allow for subdivision. If a site is, say in a core, in a suburban area, and there might only be five or six metre frontage? Well, you're not going get multi-units - No. - Or multi, you know, multi-dwelling developments go up there. So what's the size of the block? What's the zoning? What does that allow. As I said, precedent in the street. - And then from there at least you've done as much research as you can, and then you can either then make as much of an informed decision as possible. - Yeah. - Yeah. Based on what you've looked at, as you said, provision in the street, information you've received from council. And it depends on your appetite for risk after that. - Well, you might find you buy the property a little bit cheaper because of that uncertainty that others in the market. And then if you've got money burning a hole in your pocket, buy the next store block of land yourself. Put point your tennis court and swimming pool on it and problem solved. - Yeah, absolutely, yeah, yeah. - Couple more. Fiona from Sandringham. Sandringham in Melbourne. I found a villa unit to purchase as an investment property. It ticks all the boxes, but has a bathroom centred between two bedrooms, so it can only be accessed through our bedroom. Is this a deal breaker? So I presume what Fiona's referring to there is circumstance where the one and only bathroom in the property is effectively an en suite. And so you, guests need to walk through the bedroom to access the bathroom facility, - Which isn't ideal, no. - Not ideal. - It's accepted at a certain price point for particularly one bedroom flats. So entry level one bedroom flats that are fairly small, so around about the 40 to 45 square metre mark. Well sometimes that's just, that's just the way they're built. - Yeah. - And that's accepted when it's a one bedroom apartment, if it's a villa unit. So as we described before, a villa unit tend to be a bit bigger. They're usually two to three bedrooms, single level, small number on the block. That's unusual to find that a bathroom is only accessed through, - A bedroom. - presumably the main bedroom. - It wouldn't be, if there was a provision to add a second entrance point. - Off a hallway or something? - Yeah. - Yeah. - Then I don't think it would be a deal breaker for me. I mean that could certainly be of value, yeah. Value add opportunity. But yeah, in this instance, if we're assuming that there is, then yeah, it wouldn't be a deal breaker. And that's something that I'd certainly. - You'd consider, wouldn't you? - I'd consider. - Yeah, it could be a fairly cheap way of adding some value and adding usability and functionality to the property. Otherwise, if that's not possible, I'd. - Look the only reason why you would, if it's not possible, why you would, if you were on a very tight budget and it got you into an area that otherwise you wouldn't be, or you know, and you were, for example, you said no, well, I want to, I want a unit and I want to be within striking distance in this particular area. That's the compromise I might have to make. - Yeah, yeah. - Otherwise, it is something that wouldn't be viewed favourably in the market. - No. - Yeah, even with the one bedroom apartments, the entry level. If you can find one with not pure en suite, that would be viewed more favourably. So I hope that answers the question there, Fiona. And finally, Andrew from Vermont asked us, when I get a building and pest inspection back with a multitude of defects, what action should I take? How do I know which defects are potential money pits and which can be factored into our offering/bidding price? - Yeah. - Yeah. - Oh, I mean, perfect example. I did this with my house a couple of years ago. We had our house as a rental and we decided to move back into it. I had money ready or saved up for potential works. I actually had a building and pest inspection done before we moved back in. And then I determined, okay, well, right. We had some rotted timber and wood. There was a leak in the roof. So long story short, we decided, okay, instead of renovating a kitchen or a bathroom, I just want to eliminate any water getting into the property really. Whether that's subfloor or on top of the roof. So we replaced the roof, sorted out the windows, replaced the rotted weather boards. - Yeah. - And actually gave it a coat of paint. And I think, I mean that's back to the question. It's, that's we listed, okay, well here are the, you know, what we must do straight away. Here's what, there were a few things, for example, 'cause this this is an old period home that I'm talking about, a door that didn't lock closed properly. - You can live with that. - I can live with that. It's not a necessity. It was more again, about, you know, the moisture and water and fixing any rot that was to do with the house there. - Yeah, I think that, the question was referred to a multitude of defects. So I know that when we're looking through building inspections that we commissioned for our clients before purchasing a property, sometimes they come back with page after page and it looks bad. But then when you break it down, you say, well, it's the same issue, which is very minor. So it might be the builder puts the torch up against the wall and you can see a little bit of a raised surface on the plaster, the old plaster wall. - Yeah. - Well, clearly it's been, there's been a plaster crack at some point. It's been patched. - Yeah. - It could have been patched up last week. It could have been patched 10 years ago. - Yeah. - And it's a plaster crack. It's not a brickwork crack. But that could have been, oftentimes we find that that's noted in the hallway, the bedroom one, bedroom two, living room, dining room, and you've got the same issue, which is really a, for all intents and purposes, a fairly minor issue repeated a bunch of times. - Yeah. - Others can come back and your first glance at it is, oh, this looks pretty good, because there's only maybe two or three issues. On closer inspection, well, one of them might be they've just, they've found either active or past termite activity. That's something that we walk away from. So it's probably not the number of defects, it's how serious they are, I suppose. - Yeah. - Another one is, yeah, is damp like, and sometimes and. - Rising damp. - Yeah, oh, and even, I mean, if we walk you through a home and we see front to back paint deterioration and paint peeling throughout, we probably don't need to to get a building inspection to determine that. But sometimes agents are very good at dressing our properties for sale or quick internal paint. And it's hard to tell without getting one of these building reports that there are signs of moisture. And that doesn't always necessarily mean, you know, in these old brick homes, for example, the fireplaces, they didn't have the proper dam proof causing. - That's normal to find dampness around the old fireplaces, you know, 120, 130 year old fireplaces. - Yeah, but if it was front to back, that's, yeah, that's probably something that, that we would walk away from. - Yeah, I tend to find, there's probably, I've sort of come to it and I probably, I'm a bit of a broken record with our clients when we're looking at what to do with their properties. They're immediately post-purchase or maybe 10 years after purchase. Well, do we need to fix up anything? It's always, to my view and experience, it's always water related. So either water is coming in because the gutters, the roof, the downpipes aren't channelling water away to drain drainage properly or it's coming into the roof space. - Yeah. - Or water is getting under the house, so water gets under the house. And then you've got a greater propensity for issues around subsidence to foundations. And this isn't something that happens overnight, but over five or 10 years. - Yeah. - Yeah rotting timber stumps or whatever it might be. Mould, damp, rising damp, and then termites love that sort of an environment, those conditions. - Yeah, those damp, moist conditions, subfloor, nice and dark, and you know, the right sort of temperature. So if you can get the, if the items that you pop up in a building inspection are fixable, and particularly if they relate to water, sort that out, and you've, not bullet proofed your property or your house, but you've gone close. - Yeah, and I think people have to view those building reports as, it gives you a baseline understanding of the current condition of your property. And as you mentioned Jordan, they can sometimes read like there's so many things there to do, but a little bit of rust on flashing. - Yeah. - A downpipe with a leak in it, you know, and it might be something to do with guttering as well, and a roof plumber can actually attend all of those three items and it's then not such a big concern. - Yeah. - I'm not saying if the whole house needs a roof replacement, that's completely different than what I'm saying. But overall, you'll find that you could get probably, you know, three or four trades and you could get them to action, I guess, all of those items. And then you won't be spending too much money and as you said, then you'll have you, your house in tip top shape to, as if it's a investment to be rented out. And then it's just about that ongoing yearly maintenance or checking just to make sure that things are still in order. - Yeah. - And your property's in good condition. - Yeah, yep. So, again, hope that answers answers the question. That's probably enough for today. We've got a bunch of other questions, but that's probably covered a fair bit of ground. So yeah, that's all for our episode 102. We've cracked a tonne of Rewarding Property Decisions. If you like our insights, please share our podcasts with friends and family. Jarrod will be back next episode. Until then, all the best with your property decisions.