Andrew Winter answers your real estate conundrums

With a Gold Logie nomination under his belt, real estate guru Andrew Winter certainly knows his stuff. He's taken over the Lifestyle mailbox to answer your pressing property questions.

Sell or stay put? Renovate or reinvest? When it comes to real estate, no one tells it like it is like Mr Winter.

My son is 22 and would like to invest some money in property. I’ve heard advertisements for Defence Housing and it sounds like a good option for him. Is it, or would you suggest another form of real estate investment?
- Margaret

Defence Housing can suit some people. The primary difficulty is it ties you into that property investment for a very long period of time. Because housing markets can fluctuate, you might not always want to tell it in 15 years’ time. The best time to sell it might be in eight years’ time when the market in that area is booming, but you won’t be able to do that because you’ll be locked into a fixed-period term.

For someone of his age, I’d be looking at alternatives. If he can’t afford to buy a property in the area he wants to live in, he could look at rent-vesting, which is buying a property in an area he can afford, providing the rental returns and capital growth potential are good.

That way he can sell up when it suits him, because he might want to buy a family home in ten years and need to cash in then, rather than waiting 15 years.

Which suburbs do you think are the best to purchase in Brisbane in the next year or so?
- Narran

The ones you like! I’m not a hot-spotter, because the reality is there can be good deals in any suburb at any one time, it just depends on your situation. I’d be buying in an area where you understand the market, because if you understand the market, the chances of you making an educated decision are increased.

My question is about personal lifts – one person or wheelchair through one level, costing around $35,000. According to an advertising blurb, sales have increased by 900%. Would you consider them an asset to a future sale?
- Chris

Proper lifts can be an asset to a property, but they tend to only add up in slightly more expensive homes. If you spend $35,000 on a lift for a $350,000 home, that’s a 10% investment. If you spend $35,000 on a $1 million home, it’s much less.

I would nearly never suggest it in a standard two-storey home, because if someone has mobility issues or is in a wheelchair, they’re going to buy a single-level home - it makes no sense for them to buy a two-storey home and there are plenty of single-level homes out there.

Lifts tend to suit high-value properties or homes with more than two levels, like a home with an underground garage and two further levels of accommodation. In this case, a lift could actually be an asset.

We are a couple nearing retirement with a four bedroom home. I would like to convert the fourth smaller bedroom into an office or craft room with built in cupboards. Will this devalue the property?
- Jenny

No, because it’s an easy fix to dress it as a bedroom when it comes time to sell. Even if you wanted to combine bedrooms three and four because they’re next to each other, you can put a hole in the wall, combine them, make them whatever, just expect to dress them back as bedrooms when it comes time to sell.

My house was put on the market in October 2017 after a good renovation job that would still allow the new buyer to add value. After being on the market for over seven months with no contracts, even when listed with 'asking for offers', I have taken it off the market and intend to put it back on in the next couple of months.

Should I spend more money on it before putting it back on the market? And when I put it back on the market, do I advertise a price or expressions of interest?
- Stacey

If something has failed to sell with an unpriced campaign, the best thing to do is take it off the market, get a fresh agent, fresh photos, a fresh marketing campaign and put a price on it.

There are a whole heap of buyers who hate this lack of pricing, I have great issues with it myself and think it’s very misleading. If you’ve had the home off the market for a few months that’s enough time for the buyers who were looking at your property to have potentially bought and you’ll be onto a new set of buyers.

Listen to your agent’s advice, get a couple of fresh opinions and try not to spend anymore money.

We currently own a three bedroom, one bath/laundry rental property in Erskineville, Sydney. It’s not in the best shape, but seems to always have tenants paying around $800 per week. The rental does need some work on the roof and a massive tree to be removed, but at present I’m reluctant to spend any money. Should I sell up and buy a block in the suburbs or keep it?
- Robert

Erskineville as an area is a locality that’s boomed – it’s absolutely at the top of its market at the moment, or if anything possibly coming slightly off the boil. If you bought it a few years ago you’ve probably made an amazing gain on it already.

If you want to sell it, now could be a good time to do so. Sure, prices may go up again, but you’re going to have to wait a while for it to have the growth it’s already had.

In an ideal world, you’d keep your city-based property but it’s often a challenge to buy your dream home out in the suburbs and retain your inner-city place when it needs work.

I think your biggest decision is not whether you sell it, but whether you do the works and upgrade it or not. If you’ve made good capital growth on the Erskineville property, then doing the work and removing the tree to make it beautiful for sale could actually get you a very good return.

When is the best time to put a home with a pool on the market? And how important is it to have your home professionally styled?
- Ange

Generally, no sales market is dictated by the seasons, it’s dictated more by the number of properties for sale in your area at any one time. Ignore the seasons, ignore the pool and look at homes similar to yours on the market right now.

If there are ten properties for sale and they all sell easily, then you’re OK but if you wait until there are 20 on the market, you could find there’s an oversupply. It’s more about your timing in the market than whether it’s got a pool or not.

Property styling depends on what condition your home is currently in and if you’ve got any ability to style it yourself. If your home’s pretty stylish and looks good anyway, it’s probably not worth having it professionally styled, but if it’s a well lived-in, well-loved house that’s rough around the edges and you don’t really know where to start, then maybe it is.

If you’re unsure if your home needs to be styled, ask a couple of friends and family who have really nice homes if they think it needs some tweaking and if they say yes and you don’t know where to start, then professional styling might be a good idea.

It also depends on your market, if you’re in an area where lots of properties are styled then it’s almost essential, but if not, the return on investment might be lower.

We bought a house in July 2016 for $325,000. After a $35,000 mini-reno (inspired by Selling Houses Australia!), our house is now valued at approximately $490,000.

Our neighbours are keen to enter into a joint development venture with our two properties. We would demolish their house, leave ours intact and build four townhouses on the double block. The proposed return would be return on investment plus 10 per cent per annum, with a probable two-year completion date. We know nothing about development, though the neighbours do.

Are we better to just sell our place or do you think the terms are going to make us a significant gain?
- Carlie

If you don’t know anything about development, I wouldn’t do it. It’s an absolute minefield and nearly always ends up costing significantly more than you think it will or you could fall out with your neighbours. If you were going to do it, I’d do it on your own and subdivide your own block.

Alternatively, if the neighbours are keen and the value estimate for your home is $490,000, put a 10 per cent premium on it because they’re going to make a killing on the development and sell it off the market to them for $540,000 – make a quick profit and walk away. A development like that is a legal and technical minefield and if you don’t know anything about it, it could be a nightmare and you’ve made a fantastic profit already.

Have you ever owned a house that would qualify to be on Selling Houses Australia?
- Carol

I’ve owned lots of renovators! But when they come to be sold they’re always in perfect condition. I have a buying policy of only buying two types of homes: Brand new or in need of renovation. So no, I’d never buy a home after it had been on the show

Will you melt down your Gold Logie to share with Shaynna and Charlie?
- Eddy

Maybe for Shaynna, but Charlie - no.

How do we adequately address the inclusion of social housing in our new developments, given support systems tend to be in the CBD and developers are loathe to give up prime real estate?
- Andrea

In the UK, a market I was involved with for many years, developments had very strict criteria that 20 per cent of homes had to be social housing. I’ve sold real estate in developments with social housing, and it can work very well: It’s down to good town planning and architecture.

Unfortunately, integrating social housing into the overall estate tends to not be as successful as is sectioning off social housing to one corner. But the two can exist side-by-side really well and it’s a good way of getting affordable housing into areas that are generally expensive.

If councils stipulated that new developments had to include social housing then developers can still sell the housing to councils or local authority housing trusts - I think it should be encouraged.

Many people lost their homes in the GFC, how do you see these people getting back on the property ladder?
- Fiona

I think a lot of them already have! It goes in cycles - Sydney and Melbourne have had big booms so they’re calming down a little bit. The biggest problem will be if interest rates spiral out of control, but I don’t see that happening in the foreseeable future. But learn from your mistakes, whatever house you buy - whether for yourself or investment - you’ve always go to have a Plan B.

Will the rental value cover the home loan if you have to walk away from it? If it does, you’ve got a get out of jail free card. If you’ve bought a $600,000 home and suddenly it plummets to $480,000 and you’ve got a $550,000 home loan on it, you could rent it out and cover your repayments – you can walk away and wait for the market to recover.

You must always buy with a Plan B, because if you overexpose yourself on lending then you throw yourself up for that risk.

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