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How to Have a Successful Open for Inspection

By George Hadgelias

How to Have a Successful Open for Inspection

The property adage goes that “first impressions matter” but when it comes to holding an open home, the mantra is “every impression matters.”

That’s because how a property is presented for an open home can be the difference between astounding or alarming a prospective buyer.

Nelson Alexander Ivanhoe partner and auctioneer James Labiris says opens are not only about wowing prospective buyers with a home’s stand-out features, but also showing it’s well-maintained and cared-for.

He explains what buyers, with the help of their agent, need to focus on before opening the doors to would-be buyers.

The overall feel

The simplest piece of advice to follow is to present the property in its best possible light, Labiris says.

“Make sure everything is neat, tidy, cool and fresh; all the things we know buyers look for when they inspect a property,” he says. Open doors, ensure lights are turned on and even light a few good-quality candles to cater to all the senses.

While many experts suggest stripping out any personal touches of a home, Labiris says it’s a fine line. “You actually don’t need to depersonalise, as you don’t want it to feel too sterile. You want your market to see that it’s a loved home.”

Hire furniture

Labiris often recommends vendors hire furniture for the duration of a sales campaign

Negative gearing case study

An investor’s property, a unit in the Queensland town of Maryborough, costs them $18,000 per year in mortgage interest fees and other charges.

At the same time they are able to charge their tenants around $270 per week in rent, which equates to $14,000 per year.

So, while they are making a loss of $4000 per year, they are able to claim that against their income tax and reduce their overall tax liability.

The other factor to consider is that the property’s market value is also increasing over time. Purchased in 2018 for just under $189,000, it’s currently estimated to be worth around $259,000.

So if the investor were to sell the property right now they’d make a gross profit of around $70,000. However, if they hold onto the property for another few years this is likely to increase even more.

Therefore it’s worthwhile for the investor to continue to own the property as long as holding costs (such as interest fees and maintenance costs) are minimised and capital gains continue to increase over time.

What you need for negative gearing to work

For negative gearing to work, investors need a reliable cash flow to cover pre-tax costs and to earn enough income to meet their loan repayments.

And they also need to be in a position to hold onto the property for long enough for its value to increase to a point whereby the profit made on its sale is greater than its overall costs.

By allowing prospective investors to deduct any losses they make on their investment property from their taxable income, negative gearing makes it possible for a much larger proportion of the population to buy an investment property, much sooner than they would be able to if they had to rely solely on positive gearing.

And this helps to reduce rental prices, by increasing the amount of rental housing available on the market.

While it’s not the only solution to the rental crunch occurring in many places around Australia right now, which would involve increasing available housing stock negative gearing plays a part in the greater equation.

Before deciding on which gearing strategy works best for you, we’d recommend speaking to a financial advisor, so that you better understand the potential pitfalls and rewards.

Don’t forget outside

It’s a trap to focus solely on the interior of a property, Labiris says.

“Outdoors is important, especially if it’s an entertaining zone. Carry the same level of beauty you apply inside to the outside. Set up tables and chairs and neaten all the gardens,” he says

Preparing to sell

Adam Salemme, who along with his wife Lisa, engaged Nelson Alexander to sell their renovated two-bed home in the Melbourne suburb of Heidelberg recently, looked to Labiris for advice about opens.

He advised running two a week, on Thursday and Saturday, for the four weeks of the campaign. “We didn’t hesitate to take his advice as we know he knows the area and market well,” he says.

When the couple decided to sell up, they had renters in the property, but on Labiris’ advice, they decided to sell it empty, but style it with hired furniture.

“Compared to being empty, the furniture made such a big difference, it made it feel homely again,” Salemme says.

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