Category Archives: A Chat with Michelle

What to look for when buying an investment property

Purchasing an investment property, like purchasing your own home, is a huge financial decision. The considerations, however, are not the same as when it comes to purchasing your own home. When you purchase an investment property it is important to try and be more rational and logical about the decision. Here are some tips to help you make a good investment:

  1. Know what your long term plans are. Typically, people are investing in property for long term growth. This means that you really need to do your homework when it comes to both the type of house and the location. You need to know what areas have shown good growth and are predicted to perform well. You also need to consider if a house versus a unit is going to give you a better long term return.
  2. Know the numbers. It is vital that you understand all of the costs associated with owning an investment property. Rent is the source of income you will use to cover any costs but what if the property is vacant? You need to consider quite a few costs including the mortgage, property management fees, water and council rates, any strata fees, landlord and building insurance as well as any ongoing costs for maintenance and repairs.
  3. Find a good property manager: Many people consider managing a property themselves but in reality, this can be much harder than you think. Having a third party that is trained to manage your property has many benefits. They will ensure all rents are collected and will manage all aspects of your property on your behalf. They are trained to handle late rental payments, vacating inspections and other complex matters that may arise.
  4. Understand the area and what will appear to prospective tenants. Some important things to consider are distance to local schools, access to public transport and local shops. Also consider who your property will appeal to. If it is a small property then you might have a single person or couple whereas larger properties may appeal to families. Remember, you may need to think about whether or not you will allow pets and children.
  5. Speak to your accountant first. A good accountant will be able to advise you on negative gearing and how this all works. They will help you understand everything that you are allowed to deduct. If the property is new, they can also instruct you on depreciation. It is critical that you seek their advice up front.
  6. Make the property attractive to tenants. If the home needs a freshen up, don’t be afraid to paint. Also start putting some money aside for ongoing maintenance as over time, things will need attending to, just like your own home.

I hope you have found these tips useful. Owning an investment property can afford you the opportunity to reduce your tax and provide you with a long term investment that may provide you with an income in years to come but be sure you enter in to it with your eyes open. Get advice and understand what your costs will be. Being clear on these things will assist you in making an informed decision.

Frequently Asked Questions (FAQ)

In this blog, I thought I would share with you what an average day looks like for me as a settlement agent. I often get asked what it is that we do and how we spend our time, so I thought I would share with you some of the questions I get asked most frequently when it comes to my services as a settlement agent.

FAQ: Frequently Asked Questions

 You are often out of the office and in the city – what are you doing?

We go into the city to attend settlements, stamp documents at the State Revenue Department, lodge documents at Landgate and also collect title deeds and have clients original Death Certificates and Marriage Certificates sighted by a Landgate officer.  We do our trust banking plus client banking after settlement.  We sometimes meet clients in the city to collect documents from them and also to save time we will get them to sign our documents and also the transfer of land document, which is a very important document that we must have if we are to settle.  We meet up with other outside clerks to hand or collect documents from them. A trip to the city is often jam packed with lots of quick but important meetings being held.

 Who do you speak to at the exact time of settlement?

We speak to the other settlement agent representing the other side of the transaction, the sellers mortgagee (handing over discharge of mortgage document, title and registration fees), the buyers mortgagee (has the banks mortgage document in their possession and they are the ones who check all documents.  If they are happy they then disburse the funds).  Sometimes other settlement agents are present to collect funds from the seller’s sale which they take with them for a purchase settlement.  Other documents can be registered on a title i.e. Caveat and a separate party will be at settlement handing over a Withdrawal of Caveat in exchange for $$. During the exact time of settlement we are often in communication with more than one person meaning we have more than one phone call going which is fun to watch

Who chooses the booking time for a settlement?

The buyer’s settlement agent chooses the time for settlement. They will choose a time that is suitable to them in consultation with the other parties involved

Why do clients come to meet you face to face?

They come to our office and meet us face to face because we can go through their documents with them and explain the settlement process.  It saves time in the documents go back and forth via the post and documents do go astray which means we have to redo everything.  We need to do Verification of Identity for sellers and if they come to our office we can perform that with them at no charge.  They can go to Australia Post and will pay a $39.00 per person for Australia Post to conduct the Verification of Identity.  We give our clients the option.  Also clients prefer to bring their title deed in to us and we give them a receipt.  Safer than posting by registered post.

Do you still use a fax machine?

Whilst most of our communication is done via email we still rely heavily on our fax machine and the telephone

Is your home safe and secure?

With only a few short weeks until Christmas, now is really the time to start thinking about how you can ensure your home is safe whilst you and your family are off enjoying a holiday. According to police, a large number of break-ins occur over the holiday period. Thieves know that many people are away on holidays and they target homes that can look “less lived in”. So what does this mean and how can you minimise your chances of becoming simply another statistic whilst you are away enjoying yourself.

1. Ensure that you have quality locks on all doors and windows. If any doors can be deadlocked then be sure to do this as well. This means that if thieves are able to gain entry to your home, getting out may prove difficult and this can limit how much they are able to steal.
2. Never ever leave a spare key lying around your home. Many people still have one under a pot plant or stashed in the garden. Thieves know this and if they have the time, can simply scour your home and then let themselves in with your spare key.
3. Ask a trusted neighbour or friend to look in on your home. Get them to come regularly and perform some tasks that can show you are home. Overflowing letterboxes, newspapers left on the lawn and every single blind down and curtain closed all the time are sure indications that no-one is home.
4. Install a timer light. These can give your home the appearance that someone is home. Put it in a room that someone cannot easily look in to and thereby ascertain that no-one is home.
5. Inform your neighbours (that you know) that you will be on holidays so that they can be alert to any unusual or suspicious activity around your property.
6. Install DIY cameras. These are much easier than you imagine to put in and act as a real deterrent to would-be burglars.
7. Install a back to base alarm. This gives you peace of mind knowing that your home is secure and that if the alarm is triggered someone will attend your property to check it out.
8. Tidy up your front garden – an overgrown lawn or garden can be signs that no-one is home.

Now that your home is looking lived in and nice and secure, be sure to enjoy your Christmas or Summer holidays.

Our top tips to get your home ready for Christmas

Christmas is often a stressful time as we have lots more booking up our calendar and on top of this, around the home we need to put up decorations and have it looking clean and ready for lots of visitors. To minimise the stress, here are some tips for you;

1. Consider your Christmas decorations – get them out and give them a clean and sort. Throw out anything looking tired or tatty. Now you know what you have, determine where you will place all items. With a clear idea of what you need and for where, purchase additional decorations.
2. Create space – you now know what decorations you will be putting out so it is important you make some space for them. Don’t be tempted to push ornaments back to make way of Christmas items. Put things away so your house does not look too cluttered and also to minimise the risk of breakages.
3. Get on to your cards early. Make a list of who you will be sending cards to. Get to the post office early to buy your stamps as well as purchasing the right quantity of cards. Now that you have all you need at home, set aside a little time over a week to get them done. This takes the pressure off closer to Christmas.
4. Start planning presents – knowing what you need to buy and for whom eliminates the need to overbuy or overspend. Set a budget for each gift and stick to it. Create a space in your home to store presents ready for wrapping.
5. Purchase wrapping paper, gift tags, ribbons and extra sticky tape. Once you have these store them with your presents. If you have all the items you need, it is easy to start wrapping and simply do a little at a time.
6. Grab a few “just in case” gifts. This can be something like a bottle of wine or a box of chocolates. Have these wrapped and under the tree in case someone drops over with an unexpected gift for you.

My last tip is to get started NOW. If you get lots crossed off your list in November, you can really enjoy all the fun of the silly season and not be rushed and stressed shopping and worrying when you could be enjoying yourself.

Preparing your home for sale

The decision to sell your house is one of those big, life changing moments. Moving home can be both exciting and daunting. The first thing you want to know is how much money you will have to buy your next property. The sale price on your existing home will have a large bearing on your budget. In order for you to get the best possible price for your home, here are my 5 top tips for you:

1. Take a good look around your home and really focus on finishing things off. It is not unusual to have a few jobs on the go or some that have just never been completed. Finishing off any minor repairs and projects means there will be no minor negatives for people to focus on as they look around your home.

2. Tidy up – and I mean everywhere! People are surprisingly nosy creatures and are more than happy to look in cupboards, wardrobes and generally any closed doors when going through a home. Areas to really focus on are kitchen cupboards – try and have things stacked tidily so that there looks like ample storage space. Similarly, in both walk in robes and linen cupboards, consider storing any items that make the space look cluttered as this will make the space seem larger and more functional.

3. That old adage – first impressions count is really the key when selling your home. Many people will do a drive by before the home open and this could determine whether or not they come back and look through the house. So be really critical of how the front of your house looks. All gardens should be neat and tidy, well-trimmed and weed free. Lawns should be well-maintained and always cut just prior to a home open. And don’t forget the pathways, not the shortcut you and your guests might use – all pathways need to be clear, weed free and looking their best. Consider hiring a high pressure cleaner to bring out the best in both your paths, driveway and even the home itself.

4. Declutter and then declutter again! It is really easy to become used to the clutter of everyday living. Get a trusted friend to give you some honest feedback about your home. This will help you target problem areas and spots you may not have even thought about looking at. By minimising clutter, rooms can look larger and spaces more versatile. You should aim for all surfaces to be as clear as possible. If things are really bad why not consider storing items during the home open process.

5.The week prior to your home open you should be focused on undertaking a really thorough clean. Some jobs that you will need to add to your list are:

  • Remove all cobwebs.
  • Cleaning the windows and flyscreens, both inside and out.
  • Using a pressure washer to spray down pathways and exterior walls.
  • Dust ceiling fan blades, air conditioning vents and light fixtures.
  • Hang up fresh towels. Don’t forget fresh tea towels in the kitchen.
  • Clean the oven and cooktop thoroughly. People will inevitably look inside the oven and notice the cooktop.
  • Clean the walls as these can really detract from the overall feel of a room.

Good luck with all of these preparations.

How the settlement process works when building a new home

Building a new home is both an exciting and daunting process. There are several components that make the settlement a little different than simply purchasing an established home. So let’s have a look at how things may differ.

Firstly, it is important to remember that you are purchasing a block of land and then building a home on this block. The exchange of titles or settlement takes place when you settle the block of land, not when you have completed the building of the home.

There is one very important point to remember when purchasing a block of land. There are two different rates of stamp duty that are currently used in Western Australia. These two rates are applied according to the use of the land or property. The first rate is called a residential rate and this is a lower rate of stamp duty. To be eligible for this lower rate, the property must be used for residential purposes. The general rate of stamp duty is applied to other types of property that may be mixed purpose or purely commercial properties.

To be eligible for the lower residential rate of stamp duty when settlement occurs on the land you are purchasing, you must have a building contract in place. Some people get confused and think that signing for preliminary building plans is still the same thing but it is not. If you have this building contract in place at the time of settlement on the land, then the settlement will be assessed at the lower, residential rate of stamp duty.

When people initially enter in to a building contract, particularly if they have previously purchased an established home, they may not understand that there is no settlement at the end of the build. The settlement occurs when you purchase your block of land. It is extremely important that you read and understand your building contract as this will stipulate conditions such as undertaking a final inspection prior to moving in. In the settlement process of an established property you are able to carry out a final inspection on 1 occasion within 5 business days before the settlement date but this will not occur when you are building. It is extremely important that you ensure a final check is included in your building contract so that you can assess your new home.

As your settlement agent, my role is to help you to understand these things and ensure you are made aware of these things during the settlement process.

The legal facts about settlement agents

In Australia, regulation and legislation pertaining to conveyancing varies greatly. In Western Australia, conveyancing work is undertaken by settlement agents (and typically the term conveyancer is rarely used). There is regulation for any working as a settlement agent. To become a settlement agent in WA you must:

• Have a settlement agents’ license through the Department of Commerce.
• Completed a recognised conveyancing course.
• Accumulated 2 years of practical conveyancing experience.
You can access further information about conveyancers using the following avenues:
• Check www.commerce.wa.gov.au and look under Consumer Protection Licence and Registration Search to find out whether a settlement agent is licensed.
• Call the Legal Practice Board on 6211 3600 to find out whether a lawyer has a current practising certificate in law; or
• Call the Law Society on 9322 7877 for referrals to lawyers practising in this area.
The regulation governing settlement agents also sets out the following conditions that you should be aware of:
• If you are using a settlement agent, he/she cannot give you legal advice.
• If you are using a settlement agent, he/she cannot act for both the buyer and the seller unless both you and the seller give the settlement agent permission to do so on the appointment form. Where a settlement agent acts for both parties, there is a potential for a conflict of interest to occur. If any issues arise with the contract for the sale of the property or during the settlement process and the interests of the seller and the buyer differ, the settlement agent will not be able to represent both clients properly. In that case they must cease to act for you and request you to appoint another settlement agent.
• A settlement agent must not act (or continue to act) for you if he/she can’t look after your best interests because he/she has other (opposing) interests in the transaction.

You should only ever use a licensed settlement agent and never be afraid to ask for their license details.

Understanding types of ownership – a chat with Michelle

Having over 22 years’ experience in the settlement business qualifies me to talk about being an expert in this field. I can confidently say that one of the most commonly asked questions by people in the process of purchasing a property is regarding what type of co-ownership they should hold the property in.

There are two main types of property ownership when there is more than one person purchasing the property. These are joint tenants and tenants in common. When you purchase a property with another party you must elect one of these methods of co-ownership. Determining which type suits you and the other parties involved should be fairly straight forward and part of my role as a settlement agent is to assist you in understanding the most appropriate form of co-ownership for your personal circumstance.

Joint Tenants
As joint tenants all parties own an equal share of the property. This is typical when you are purchasing with your spouse or partner. If one of the parties dies under a joint tenant ownership, their share is automatically passed to the surviving partner.

Tenants in Common
The most likely reason you will choose to be tenants in common is because not all parties will own equal shares in the property and each individual wishes to protect their share. If you are purchasing a property with a friend or relative you may choose this option. In the event of a death of one of the owners, their share can be distributed according to the terms set out in their will.

I hope this clarifies these two types of ownership. Remember as a settlement agent I am here to help you understand these important matters when purchasing a property.

Hi, I’m Michelle!

As owner of Dynasty Conveyancing I pride myself on providing all of my clients with an excellent settlement service. I know that I do this as I get so many compliments both from clients and people they have referred to me. Working as a Settlement Agent was something that I worked in for almost 22 years. This experience has enabled me to really understand all of the complexities that can arise with the settlement of a property.

When I first left school (many moons ago) I took a course in office administration and was soon working in a busy real estate office. I was asked to help out with ‘settlements’ but actually had no idea what this meant and was really thrown in at the deep end. There was so much to learn and I really enjoyed the challenge that each settlement could throw up. Looking back I was so lucky to have been given this opportunity as it gave me a career that I truly love. So after being exposed to settlements I decided this was what I was passionate about and wanted to pursue a career in. I took a job working as a junior clerk in a settlement agency and commenced studying for my Certificate in Settlement Agency Procedures.

Over time I have gained more experience and taken on more senior roles until I made the decision to start my own agency in 2008. Working for myself is so rewarding. I still love my work and the challenges that can come with every settlement.

What does a settlement agent do?

Most of us don’t buy and sell property with a great deal of frequency and consequently much of the process is new and unfamiliar. The role of the settlement agent is finalise the sale transaction on the purchase of a property. This settlement process involves undertaking a range of activities all of which will ensure the settlement goes ahead on time. In most instances, the settlement agent will undertake the following:

  • Search land titles and check encumbrances.
  • Arrange for the discharge of encumbrances.
  • Prepare all legal documents for settlement.
  • Ensure that any special conditions outlined in the contract have been attended to.
  • Arrange for fees and charges to be paid.
  • Inquire with the relevant local council and government departments about rates, taxes and water consumption.

All of these will allow a calculation to be made about the distribution of costs between the buyer and the seller according to what has already been paid. The settlement agent will notify their client, either the buyer or seller of this calculation and will notify the client when the change of ownership has taken place.

Remember you are the client and if you are unsure or unclear about anything, the settlement agent is there to act on your behalf and work with you so don’t ever be afraid to ask for further information.