29 Jun Where have all the investors gone? + Would you buy blind? + Power negotiation
Highlights from this week:
- DIY home improvement design
- Negotiation strategies that work
- Why people trust Rich with all their savings
- The reasons why investors are not buying
- The tax money people leave on the table
Negotiate like a pro – Cate Bakos
Kevin: I want to talk about a subject now that’s near and dear to my heart, and that is something that professionals in the real estate industry are practicing all the time, and that is the power of negotiation, your ability to negotiate. Don’t always leave it up to your agent or your buyer’s agent to do it. This is something that you, as a buyer and/or a seller, need to understand and maybe practice a bit.
Joining me to talk about this, someone who does this professionally, Cate Bakos, who is a buyer’s agent out of Melbourne.
Good day, Cate. How are you doing?
Cate: Hi, Kevin. I’m well, thanks.
Kevin: Let’s have a look at some of the less confrontational ways of negotiating if you have to do it hard. I’ve asked Cate to put together a list for me. She’s done that and given us four, which I want to talk to you about.
The first one you say: blaming the cash flow requirement on the price offered, Cate.
Cate: Yes, it can sometimes be a gentle way… Obviously, it’s not adversarial. You can say to an agent that you’d love to buy the property but the price tag that’s on the property is not working for you because of the cash flow that you require.
Particularly if you do feel the price is a bit too high, you can wind it back and demonstrate the going rental yield in the area for that kind of dwelling being a mismatch for this particular property.
It’s a really easy way of saying it’s priced too high or the price tag is not going to work for me, and it takes the focus off arguing about the price. You can blame the yield, and that’s an easy argument for an agent to have with a vendor without getting them off side.
Kevin: Professional buyers and investors should be looking at it in that way anyway, as treating it like a business, Cate.
Cate: They absolutely should. Sometimes if the price tag is too high and the yield just won’t work, the property won’t sell to an investor. They may get lucky and have a home-buyer who falls in love with the property, or if it’s an investment type property in an area that’s booming because of investment activity, that the vendor will eventually meet the market.
Kevin: I love the next one you gave me: playing good cop/bad cop with a partner. How often do you see this happening? Is there a stereotype of who’s going to take the hard role?
Cate: Yes, it happens all the time. Sometimes I use that when I’m talking to an agent about a property and I’m genuine about it. I’ll often say “Look, the husband is not so keen. He’s just not all that interested. He’s not saying no, but he’s the one who we need to get across the line.
“The wife is really keen. She’s really happy with the price. But it’s not going to happen. They’re not going to agree to it, so what can you give me to go back to the husband and wife with so that he feels he’s having a little bit of a win and she’s not losing grasp on getting the property of her dreams.”
Kevin: Yes. And a couple on their own who may not have the benefit of having a buyer’s agent can play the same… I was going to say “game,” but it’s not a game. Have the same rules.
Cate: Yes, absolutely. Sometimes I’ve seen it work really effectively when if it’s the husband who’s saying no, he might say to the agent, “Look, I’m just not there. My wife loves it, but you’ll need to convince me. This is where I think value sits, for these reasons.”
Or she could go to the agent and say, “What can you do to help me talk to my husband about where value really sits? How could we have this negotiation because I love the property but he’s still saying he’s not there at that level?”
Kevin: Yes, very good thoughts. Another one: dual offers with differing terms. Is this with the one set of buyers maybe offering up different alternatives?
Cate: Absolutely. Yes, it’s a little bit of a bluff, but you have to be prepared to go through with it if they do choose the option that you prefer they didn’t. In other words, if you think that the vendor wants a fast sale, you could make a sharper offer on a 30-day settlement term, and then you could also offer a price tag that’s closer to their asking price on something like a 120- or a 150-day term, hoping that they see that you’re trying to make their figure, but you need time to do that and they will favor the shorter term and the negotiation will move in your favor.
It often goes to plan, but if you find that the vendor is more fixated on price and can find a way to play this to your longer term, you might have a yes on a higher figure on a longer settlement, and if that doesn’t suit you, you should never have put it forward.
Kevin: Yes, good thought. And finally, just quickly, and this may relate to the first one we talked about: pleading budget constraint and being very positive and emotional about the property.
Cate: Yes. This one is really appealing to the vendor’s emotions as well. A lot of vendors who love their home and are feeling quite emotional about the sale will get a lot of comfort from knowing that a buyer who purchases the property loves the home as much as they did.
So, sometimes, particularly when it’s the last thing that you’ve got up your sleeve, if you have hit the rev-limiter on your budget, it’s all you have left, and that is to try and play to the vendor’s emotions and have them sell the home at a price that they might have been a bit reluctant to do so, on the back of how excited you could be about buying it.
It doesn’t always go to plan. It’s not a very reliable tactic, but every now and then, it can pay off. I’ve had situations where vendors have chosen a slightly lower offer over that of someone who might have been a developer or an investor who was unemotional about the property because the purchaser has been able to demonstrate to the vendor, via the agent or via me, how much they love the property.
Sometimes it’s just a really heartfelt, well-written letter that’s passed on to the vendor. So, people need to think creatively when they really are hitting their budget and they absolutely love the home.
Kevin: See, this is the reason why it’s great to deal with people like Cate Bakos. They are professionals. They know how to do this. They do it every single day.
Cate Bakos is a buyer’s agent out of Melbourne, and if you’d like to use her services, all you’ve got to do is Google her – you’ll find her; she’s very easy – Cate Bakos. I don’t mean easy; I mean you’re easy to find.
Cate: Thank you, Kevin. That’s really lovely of you.
Kevin: Good on you, Cate Bakos. And thanks, Cate. We’ll talk to you again soon.
Where have all the investors gone? – Shannon Davis
Kevin: Recent RBA figures and the impact of APRA, I guess, is showing us that investors are starting to pull back a little bit. Which markets are they pulling out of, and why is this happening? What are the long-term ramifications of this? Shannon Davis from Image Property joins me.
I know you watch this carefully, Shannon. What are the figures telling you?
Shannon: I think the APRA regulations tightening up has had market effects. Also, some of the banks chose to restrict foreign buying, as well, perhaps 16 to 18 months ago, and that has come into play, as well. But typically, Kevin, in any property cycle where there’s been strong capital growth – like the two biggest cities of our country, Sidney and Melbourne – over time, what happens is yields are coming down percentage-wise, and therefore the investor has to top up more and more of a gap or have a bigger deposit to make it viable.
So, over time, just as an effect of its capital growth, you’ll see investors jump out of the market where they no longer see value on a yield basis, perhaps yields hitting 2% rather than a more typical 4%, and they will need bigger deposits or a bigger gap to fund those mortgages, and it will become of less and less appeal.
When you see investors jump back in is when there have been idle prices for a long time or perhaps even prices drop, and those yields percentage-wise are increasing and they get to a more chunky 4% or 5%, you’ll see investors try and jump into that market.
I think Sydney and Melbourne are a victim of their own success, and you’ll probably see less investors with that appetite for now in those two largest capital city markets of Australia.
Kevin: It seems to be impacting the Sydney market more so than the Melbourne market right now. Is that the reading you get?
Shannon: Yes. They probably started the party a bit sooner in Sydney than they did in Melbourne. A lot of the immigrants arrive to Sydney and don’t move out of there, so it’s our biggest international city. But yes, it probably started a little bit before Melbourne and hence has come off a little bit sooner, as well.
Kevin: What are your thoughts on the projections that Melbourne is going to outstrip Sydney in terms of population growth?
Shannon: Not really my area of expertise, but there are always these types of predictions. I remember back in the heyday of the Queensland expansion that Queensland was going to replace Melbourne as the second biggest city. There are people who say Perth is going to replace Brisbane as the third biggest city.
I have got a lot of doubts and assumptions on those things. I think they ebb and flow, but over time, they generally stay the same. I can’t see any real move from the two big cities staying the way they are.
Kevin: They do grow in proportion, don’t they? Some cities have their growth spurts and then they have a bit of a decline. What’s your prediction or your thoughts on prices in the southern caps?
Shannon: I think they’ve had a really good boom, and you can’t last at double-digit growth every year, year in, year out. That would just have a huge inflationary knock-on effect and would actually end up in destruction of wealth rather than creation of wealth.
Over a time, markets are led by fear and greed, and there’s probably going to be more fear in those markets just now where prices have come off, and there are going to be people who are happy with the gains they’d made and try to realize it. But there are fewer buyers on the ground just as they were, and I think some of the other suburbs and states that haven’t had as remarkable rise are doing better right now.
Kevin: Where do you think the smart investment money is going now? What are you suggesting to people?
Shannon: I don’t know what to tell them too much. Take a long view of your investments, and over time, you’ll get it right. If you try and pick the market too much… But I think in the short term, Kevin, in one or two years, the leading cap cities will be Brisbane, Adelaide, and Hobart.
There are headwinds for all those capital cities as well, but they’re probably going to lead the way right now.
Kevin: Good talking to you. Shannon Davis from Image Property. They have offices in Brisbane and in Melbourne. Shannon, thanks for your time.
Shannon: Thanks, Kevin.
The tax money people leave on the table – Brad Beer
Kevin: As the end of the financial year fast approaches – only a matter of days away, in fact – it’s important for property investors to ensure they organize all of their paperwork to meet with their accountant to complete their annual income tax return.
Now one document that owners of an income-producing property will need that they sometimes are unaware of is a tax depreciation schedule. I’m speaking now to Brad Beer from BMT Tax Depreciation – he’s the Chief Executive Officer there – about depreciation deduction for investors.
What are they eligible for, Brad?
Brad: Depreciation claims are something that relate to the building getting older and wearing out, and the tax office says because of that decline in value and those things, it allows us to claim a tax deduction for this wear and tear. What they’re eligible for, at the end of the day, is some more tax back.
Investors are buying into properties in order to make money in the future – really, wealth – and they make that through growth and they also make that through the cash flow over time. Depreciation is one of those things that just adds a fair bit to the cash flow in order to help you hold that property on the way through.
Kevin: A lot of investors I’ve spoken to actually assume that their accountant is simply going to take care of that. Is that a problem?
Brad: These depreciation claims are related to a construction cost of the building and some of the values of items in the building, and often, people just think “All of my tax stuff is done by my accountant.”
We’re a quantity surveyor and the tax office accepts our cost estimates for the purpose of depreciation because quantity surveyors traditionally, actually, estimate construction costs of buildings. I can count the bricks off a set of plans for you and tell you how much it should cost to build it.
So, we actually work alongside the accountant and provide one of the numbers that goes into your tax return, which is a depreciation number. It’s actually built up of the cost of the building and the value of a bunch of items in the building that come down and work out an actual number, which is one of all the numbers that the accountant puts in their tax return to come up with a tax claim at the end of the year.
So, we actually provide something to the accountants. Most of the jobs that we do are actually referred by accounts because the accountant knows they actually shouldn’t do these cost estimates and they say “Get something from the quantity surveyor” and they’ll give us the numbers to help maximize your deductions, and therefore, your cash flow.
Kevin: That’s a question that every investor should ask their accountant: where is the tax depreciation schedule coming from? And maybe even suggest they get it from you.
Brad: Absolutely. It’s really easy. We have calculators online that are free to use. You can go in and put some details about your property, or talk to us about it, and we can give you an idea of how much you should be claiming.
Your accountant may be claiming something, maybe they didn’t bother, maybe they are doing it already, but it’s always good to ask your accountant whether you’re getting all your deductions, and depreciation is just one of those.
Kevin: Is this time of year, approaching the end of the financial year, a time when investors should be looking at what appreciation they can claim? Is this the right time?
Brad: Yes, and the reason I say that… The important time, really, is you need to make this deduction when you’re doing a tax return. But if you’re going to do a tax return in July or August and you’re going to buy a depreciation schedule for that, if you buy or order and pay for it before the 30th of June, that bill becomes deductible in that year instead of the following year.
The other thing is before you do another tax return, if you’ve already owned this property and you haven’t been claiming everything that you can claim, you can actually go back and amend two years of your tax return and get some of this money back from the past.
So, before you do another tax return, let’s see if you can get something out of the previous two years or however long that is. If you’ve owned it for five years, you still only get to go back two years. But let’s see if there’s something there and before you lose another year of the potential claims, sort it out before you get off to that accountant.
Talk to them first, of course. We work alongside them. But pre-30, June, that bill is deductible in this year instead of next year.
Kevin: This question probably could be “How long is a piece of string?” but on average, how much depreciation can an investor claim?
Brad: We actually have pretty good data on these sorts of things, so it’s not necessarily a piece of string. In the last financial year, because this one is not quite finished, the average deduction out of our reports in the first full financial year that they had a claim for was just under $10,000.
Now, that is a fairly substantial amount, and we did about 70,000 reports last year, so it’s not based on five reports – it’s based on a lot – and that’s the average number.
With the Budget changes that have happened this year, obviously, we haven’t got quite the full year of data, but we’ll have that soon. That will be slightly less in this financial year than it was in the previous one where those stats actually come from, but still quite substantial deductions available, absolutely.
Kevin: What about timing for taking advantage of tax depreciation? Is this too late, or should we be doing it much sooner than this?
Brad: It depends. If you bought a property in this financial year, then what you have to do is make sure you get it done pre-30, June, really just so that bill is claimable, and also just making sure that it’s ready for the accountant who makes those deductions.
But if you do want to go back and do those back claims for the past, then doing it before they do another tax return means they’ll be able to potentially adjust two previous tax returns and then make your claims for deductions in this year going forward and the future.
Kevin: Good stuff. Brad Beer from BMT Tax Depreciation. Brad, thanks again for your time.
Brad: Always a pleasure. Thanks, Kevin.
Why people trust Rich with their savings – Rich Harvey
Kevin: I don’t know about you, but I’ve been watching Buying Blind. I wasn’t quite sure if I’d enjoy the show. It’s on Channel 9, and Rich Harvey is going to be joining me in just a moment. Rich is a buyer’s agent who we’ve had on the show in the past, a very talented guy, and he’s one of the stars in the series. He joins me.
Good day, Rich. How are you doing?
Rich: Very good, Kevin. Really nice to chat with you again.
Kevin: I did say to you off air that I wasn’t 100% sure I was going to enjoy it, but I watched an episode the other night and I really got into it. I thought it was quite refreshing. The reason I wasn’t sure if I’d like it is because the concept is a bit crazy, about buying blind, giving someone carte blanche to go out and spend your money.
Rich: It is a very scary concept, Kevin, and I appreciate your feedback. It’s great to get that really positive feedback. In fact, a lot of people have said the same thing. They go “Oh, not another property show,” but once they see it, they realize that it’s actually a journey of people’s lives.
Yes, we have renovation and we’re buying houses, but it’s more about the couples on the show and just the struggles they’ve had and how we have to solve their issues. That’s what’s really enjoyable. And every couple is different; every one has a different dilemma. But I have to say the concept is pretty out there.
Kevin: Can I ask you this, though? We know in the land of television, they go for lots of drama and hype, and a lot of it is false. Please answer me honestly if you can, how much of what we see is real? Are we seeing a real thing here?
Rich: Absolutely, Kevin. It’s 100% real. There’s actually more drama off air, as well, to be honest. There’s even more stress. It’s no wonder I haven’t any hair left.
Kevin: You didn’t have much before you started, mate, let’s be frank.
Rich: And Marshall makes a few jibes along the way as well. Look, it’s absolutely real. The buyers have to sign over a power of attorney, which gives me the authority to buy the home without them seeing it, and then we renovate it and we reveal it.
Kevin: Where do you get the people from?
Rich: They did some sort of Facebook campaign, I believe. They advertised, and they got a number of takers, and they had to then whittle it down to just six couples.
But it was an absolute privilege to be asked to be on the show. It’s an honor to be on it. It is an amazing concept, and the point is that it was an amazing leap of faith for each of these couples.
It was a lot of hesitation. I literally walk up to the front door and I’ve never ever met these people before. They have a camera either side of the door, and that’s literally the first time I meet them. I never meet them before that moment.
I’ve read their brief, I know a little bit about them on paper, but that’s all there is. It’s all real. It’s real money, it’s real drama and real life, absolutely.
Kevin: Has anything gone wrong so far?
Rich: There have been a few properties we missed out on, and that was really frustrating. And that gets shown in the series, certainly. I guess one of the biggest issues we have on this show is that they all have limited budgets and quite unrealistic expectations. And that’s one of the things that we have to do.
Particularly my job as a buyer’s agent is to say to these buyers “Look, I know you would love a five-bedroom home with a swimming pool, but you just can’t have it. You don’t have the money for it.”
I think Lis and Allie were the most realistic couple with the smallest budget, they’re in the second episode. They were buying near the Dandenongs about an hour out from Melbourne, and they had actually trained their kids to sleep in one bedroom because they thought they were moving to a two-bedroom unit. They had a budget of $550,000, they managed to increase that to about $600,000, and then I was able to buy them the house, and they ended up with a three-bedroom house. And they were just a lovely couple, eternally grateful.
Kevin: The one I saw was where they had a really detailed list, they’d studied it for years and years, and they knew exactly…
Rich: Yes, that was Mags and Tyson.
Kevin: Full marks to them, they obviously were on an absolute journey. They saved a lot of money. When I watched it, I thought, wow, because they’ve spent so much time getting ready for this, this means a lot to them. For them to give that up to you was a big leap.
Rich: You know what? Mags had been saving up since she was 14 years old. She was a very particular person, and also Tyson, very exacting in his requirements. They’d actually ranked all of their 26 criteria in a multi-criteria analysis. And being an economist, I didn’t mind looking at that, but what we had to actually do was break them down.
One of the things we did that didn’t make the edit was we actually got them to a point where I got Tyson to rip up the spreadsheet and tell us just the top five things that he wanted. Because at the end of the show, you see me with a piece of paper taped together.
Kevin: All torn up. Yes, that’s right. I wondered why you tore it up, actually.
Rich: Well, it wasn’t me; it was actually Tyson. We actually got him to the point of understanding a realization. “You know what? I might have to give up all of my criteria just to get into the market for what I really want.” But as it turned out, I got 24 of the 26 things anyway, and they were just over the moon.
Kevin: It must be really rewarding for you to go through that journey and then see the delight on their face. What’s it like when you take the blindfold off? Do you think “Oh, god, I hope they like this?”
Rich: Well, the first thing is their pupils are dilated, so they can’t see anything for about three seconds. But after they adjust to the light, they go “Oh, wow.” And I’m intently looking at their faces to go “Did we do it?” All three of us are standing there going “Gosh, I hope they like it. Otherwise, we’re in big trouble.”
Kevin: What does happen if they don’t like it? I think it was Mags who said, “Oh, well, if we’re going to sell it, we sell it.” Is that the only outcome for them?
Rich: Absolutely, there’s no going back. The contracts are signed, it’s in their name, the renovation work has been done, the money has been spent, so the only thing they can do is live with it, or if they don’t like it, sell it. But we’ve added value, so I think they’d be able to sell it with a little bit more equity up their sleeves.
Kevin: Do you plan to go back and revisit them after 6 or 12 months?
Rich: I haven’t planned to yet, but yes, we could certainly think about that if we need to. I know that the series producers went back a month after they had moved in just to touch base. I think that gets shown on air, just how they’re tracking.
But as far as I’m aware, they’re all absolutely loving their property. I got a few messages from them saying “Couldn’t have done it without you, absolutely love it, changed our lives.” So, as you said, it’s incredibly rewarding to help these people on their journey.
Kevin: It has to be great for your business, too. Rich’s business, by the way, is PropertyBuyer.com.au. It has to be great for your business, Rich?
Rich: Absolutely. I hope it showcases exactly what a buyer’s agent does. It’s not the typical way we lead clients with a blindfold on, but it certainly showcases the steps we have to go through. And with this show, we have to decide the compromises for the clients, whereas normally, it’s a discussion with a client along that journey of helping them to choose the right home.
Kevin: How many episodes in the series?
Rich: Six in total. We’ve had three, and there are three to go.
Kevin: And is there another series planned?
Rich: I don’t know yet. I guess it depends on the ratings.
Kevin: And how are the ratings? How are they going?
Rich: They’re actually doing pretty well. It’s in the top ten, so it’s certainly up there. I think a lot of people, as you say, have a bit of property fatigue with some of the shows, but I think this one is refreshingly different and it has a more personalized story to it. And that’s what I love. I love the fact that the couples had to give up control.
Some of them were ready to sign over straight away, within five minutes, like Fotis and Jess, the first episode. It was so funny. He was just a lovely guy and he couldn’t wait to sign the piece of paper. He goes “Look, Rich, I’m over it. I’m ready to go.” And others are like “Oh, gosh, it’s a huge… Can you give me a think about it?” and we have to wait half an hour for them to think about it before they put pen to paper. But the end result so far has been really positive.
Kevin: Good talking to you, Rich Harvey. Rich is the star of the new show on Channel 9 called Buying Blind. Check it out for yourself. It is refreshingly different.
Mate, well done, congratulations. I look forward to talking to you again soon.
Rich: Good on you, Kevin. Thanks again.
DIY home improvement design – Vaughan Keenan
Kevin: We’re seeing a lot more people in the marketplace now wanting to improve rather than move, so when it comes to renovations, where can you go wrong, how to avoid the traps? I’m talking in this segment to Vaughan Keenan. Vaughan is from Grace and Keenan and has an extensive experience at both renovation and decoration.
Vaughan, welcome to the show and thanks for your time.
Vaughan: No, thank you, Kevin. It’s a pleasure to be here.
Kevin: I could call you the decorator to the stars, couldn’t I? Because you’ve done some work with Deborah Hutton.
Vaughan: We have just recently, just helping her, basically, fix some of the pitfalls and traps that come up when you’re renovating and also about it getting it right at the end of the day.
Kevin: Yes, very important. Where do you see renovators go wrong?
Vaughan: Basically, where most renovators go wrong, it’s mainly about inexperience at the end of the day. They go to some of the experts – like architects and interior designers and also draftsman and bits and pieces from there – but they start their design on sometimes how they want it to look rather than how it needs to be to live in and how it needs to flow.
Most architects, they want to design from the cutting-edge point of view as opposed to going, “How is this family going to live in the house?” Also too, “Who is going to buy it one day?” because everyone moves at some point in their life. Whether that’s a five-year period or a 50-year period, they do move on.
So, the flow and how it’s going to represent for the mass market is very important, and then you make the house pretty from there.
Kevin: You’ve obviously had extensive experience in this and you’re obviously very good at it because you’re in great demand. How much value does it add to a property? If you listed a property for sale and you did a makeover on it, are you able to give us a bit of an idea as to how much value that would add to the property?
Vaughan: Basically, a makeover, nine times out of ten does add value but as long as they fix the floor plan. A lot of people go in and think “We’ll give it a coat of paint. We’ll pop a kitchen or bathroom in.” But if they’re actually putting all of that into a house where the floor plan doesn’t work, it’s not actually going to add that much value.
So, if they fix the few pitfalls with the floor plan, then they start making it look what I call pretty and appealing to the mass market, they’ll then make some money, which depending on cost… The old rule was whatever you spent on it, you would like to get that back plus the same again. So, if you spent $100,000, you’d like to think the house is worth $200,000 more.
Kevin: Is that always the case?
Vaughan: Not always. Again, if they haven’t fixed it properly or they haven’t fixed some of the issues, because sometimes people think a “tart up” will fix it, but if you have structural issues or water problems or [2:47 inaudible] problems and you haven’t fixed those, they normally rear their head at the end of the stage and then that affects the price.
Kevin: When it comes to renovation, do you find that many people make the mistake of renovating it to their own taste as opposed to renovating it for the taste of the people they want to target or market?
Vaughan: Definitely. When people start adding bright colors to a house, carpets that are funny patterns, built-in cabinetry that no one else would want, often, that doesn’t add any value. It’s a little bit like spending money on C-Bus lighting, which is a computer-controlled lighting system. People think that’s great for them, but it’s not going to add any value.
A little bit like solar panels and everything, because you would want to make sure that it’s going to add value where sometimes those things don’t add value to the people who don’t want them.
Kevin: Do you think, therefore, that if they’re going to be looking at selling, people should make everything fairly neutral, or can you have splashes of color in different places?
Vaughan: You can do the odd feature wall because then, say, if I was selling it for somebody, I would say “Listen, if that feature wall offends you, you can paint it out.” That’s an easy fix. It’s when you see online sometimes, sometimes people put in a kitchen that’s bright red with black bench tops or something. That’s an expensive fix if people don’t like it.
So, the fundamentally expensive things to change should all be very neutral.
Kevin: You talked earlier about solar panels and so on and technology. Is it worthwhile putting good technology into a property, or is that really designed for and over a certain value style property? Can you over-value with technology?
Vaughan: Definitely. And it also depends on your age group of person buying your property. We just sold a house in Ascot, and that sold in the mid-$4 million range. That property had intercom, it had security, and it had a normal lighting system and a home hub so that you could patch things through, but it didn’t have any other technology. The people who purchased that house were in their 50s. They didn’t want the technology because they actually find it hard to manage.
You would think in a $4 million home, it should have all of that, but most people spending that sort of money, they’re not in their 20s or early 30s. They’re a slightly older crew where, say, a modern, new apartment, they normally put a bit of technology in there because the age bracket of the person is a little bit younger and they’re used to technology.
Kevin: Yes, it raises a really interesting point, doesn’t it, about if you’re thinking about selling your property, maybe you should get an agent like you in to say “Who do you think this is going to be targeted at and how should I prepare? What are the things people in this price range and this age group expecting in a property?”
Vaughan: Definitely, and also, too, how it’s staged and presented as far as furniture goes. If you’re selling an apartment on the river at Newstead in one of the more expensive buildings where they’re $2.5 million upwards, that furniture has to relate for down-sizers. They want comfort, they want ease, they want it to feel like something they would have at home. If you’re selling a $600,000 apartment in Newstead to the younger crew, they want it all very modern and minimal and slick. Not so much about comfort; it’s more about a look.
Kevin: So really think about the person who will be buying your property and then make it fit that demographic.
Vaughan: Exactly. And keep it nice and broad. In some cases, there’s a crossover, so you also have to style it and present it to suit both markets as well. So, definitely talk to agent who knows your area or knows your marketplace before you put it on the market on how you present it. Otherwise, you might present it and you have to re-present it again, and then you’ve wasted money.
Kevin: Thanks, Vaughan. Great advice. You can reach Vaughan and the team at Grace and Keenan, GraceAndKeenan.com.au. Thanks for your time, Vaughan.
Vaughan: No problem at all. Thanks, Kevin.