Sam’s Weekly Reading List for the Week of October 28th through November 1st

October 31, 2013 Sam Saggers

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As savvy property investors it’s important to keep on top of events and changes which can have an impact on our property investments. There are so many analyses, opinions and articles about investing in property out there that it can be tough trying to keep up with what’s happening in property.
I’d like to take a moment to share some of the more interesting articles I’ve come across this week.

How baby boomer downgraders may affect commercial property investments

While most property investors are aware of the impact that the large demographic known as “baby boomers” has on the residential property market, some may not have heard about the impact this generation may have on commercial property investments.

Advisor Chris Lang believes that a “downward pressure on pricing”, ( a result of the large influx of product into the market from baby boomers selling off their homes to downsize) will have some “unexpected consequences”.

As the baby boomers begin to realise their major investment (their homes) aren’t the cash cows they expected they will have less money to plunk down on their downsized home which may affect the inheritance their children might have enjoyed.

Says Lang, “On the face of it [baby boomers retiring], you would probably expect not too much impact at all. However, during the early 2000s, many investors use the untapped equity in their homes, to set up lines of credit.
And then, used them to purchase one or more solid commercial investment properties.”

“The commercial properties themselves may be performing well. But it is the LVR for the line of credit, which will concern your bank over the next 10 years — as the market falls away, for your traditional family home.”

“As such, you may find yourself having to sell the commercial property to keep your family home. Or be forced to sell the family home, in what will soon become a soft market.”

“Bottom line is fortunately, most of my clients will have already taken the necessary steps to avoid this dilemma.”

“However, with the residential market running hot at the moment, you still have a small window in which to resolve any exposure you may currently have.”

Click here to find out more.

Are first home buyers MIA or unreported?

Economist Leith van Onselen, writing for the Unconventional Economist, asks some fascinating questions about the reporting methods for tracking first home buyers (FHB)s.

“Over the past year,” says Onselen, “the reported number of FHB finance commitments has fallen by 22% nationally, with the proportion of total finance commitments going to FHBs also slumping to 13.7% in August – well below the long-run average of 20%.”
“However, reports have emerged that all is not what it seems and FHB mortgage demand may not actually be as weak as reported by the Australian Bureau of Statistics (ABS). Specifically, it could be the case that FHB mortgage commitments are being significantly under-reported due to:
An inability of lenders to record FHB mortgages into their mortgage systems; and
A possible reluctance of borrowers to record themselves as FHBs in the absence of any grant or stamp duty concession being made available.”

“The first factor above seems most persuasive. According to the latest Accredited Broker eNewsletter, some lenders’ systems do not have a box to tick for FHBs – only boxes exist for the FHOG and the FHB stamp duty concessions.”

“Either way,” concludes Onselen, “like the woeful tracking of foreign buyers, the situation needs to be resolved since accurate data collection is vital in order for analysts, commentators, and policy makers to make informed judgements.”

I second his recommendations. What about you?

Click here to read the rest of this very interesting article.

Finally, just as we don’t give much thought to our much needed first responders until we need them, here’s an informative article and video about individuals who provide a much needed service to the real estate industry; locksmiths. Enjoy!

A day in the life of a locksmith – unlocking security secrets

This is the day (and the night) in the life of a locksmith.

8am: Justin arrives at the Toplock factory in Northcote to start the day. He’s on night shift as well today so he’ll be working through the night. His dispatcher is already at work and has a full list of jobs ready for him and the growing team of locksmiths.

8.10am: Justin leaves for his first job. It’s a house in Coburg. It’s not too far and Justin makes good time.

8.40am: Justin arrives at the house and talks to the owner. The owner’s husband lost his wallet with a spare key hidden inside last week. His address was written on his drivers license and the owner thought she heard someone trying to open the back door last night. It’s a simple rekeying job.

9:00am: Rekeying is a quick job so he’s done in 20 minutes. He invoices the owner and heads back to the car to get his next job. It’s an industrial office out in Keilor East.

9:30am: Justin arrives at the office. He has a quick chat and gets started. The new tenants want to put locks on the three internal office doors. He switches out the old knobs with new keyed knobs. He boxes up the old ones so they can be reused if need be. Some of the doors weren’t quite latching properly but a quick bit of chisel work clears it up.

10:00am: He invoices the client and heads back to his office.

10:30am: Justin has a lot of administration to do. With the recent expansion of his business he spends more and more time running the administrative side of the business while his team of locksmiths run all around Melbourne.

2.30pm: He’s finished his administrative work and it’s time to hit the road again. He has a call out to a renovator in Brunswick who needs some work done.

2.45pm: It’s an old terrace being refurbished and the owners want internal locks put on all the bedroom and bathrooms. Tenants like it especially if they’re sharing a house. It gives them some extra privacy.

4.00pm: The whole house now has locks. It took a while to resit some of the doors and get them latching properly. He heads back to his car to get his next job. A nearby real estate agent wants the locks rekeyed for a new tenant.

4.20pm: He arrives at the Carlton house to rekey the front and back door. It’s a quick job for Justin.

4.40pm: He gives the new keys over to the agent and heads back to the office to prepare for the night shift.

7:00pm: Justin’s rested and eaten and ready to start the night shift. Once a week someone has to take the night shift and be prepared for all sorts of jobs.

9:00pm: The first night job comes early. It’s a call from Richmond where someone has locked themselves out. He heads over to let the tenants back in on a rainy night.

9.20pm: The traffic isn’t so bad at this time of night so Justin gets there quickly. He lets the tenant back in using a pick gun and heads back to the office.

11:00pm: Another call from someone locked out in Collingwood.

11:15pm: They’re drunk but nice. He lets them in with the pick gun again. All documentation is completed and ID is sighted to make sure it’s the right person.

2:00am: No one calls until 2am. He wakes up to take the call. Someone gets a quote, decides they don’t want the job and don’t take the job.

3:00am: He gets another call. The person is calling from a public phone box and needs to be let back in. They have bars on their windows so they couldn’t smash it.

3:00am: He lets them back in with the pick gun again and heads off.

7:30am: The night shift ends with no other call outs and Justin is free to go home and sleep.”

Wow. What a day, right? Click here to check out the video where Justin talks about his life as a locksmith.

Have a great weekend, and if you enjoyed this list, please share it with your friends by clicking a social link button to the left of this article.

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