5 Real Estate Euphemisms That Need To Die, Now.

As property investors we all tolerate and enjoy some tired euphemisms. ‘Renovator’s Dream’, ‘Cosy’ and ‘Full of character’ have become old jokes as we wised up to them. At the same time though, we can unwittingly swallow a lot of nonsense fed to us by marketers, commentators and other investors. Some of these clichés have got under my skin recently and it’s time to give them a blast.

“Great for first-time investors”

This phrase implies that the property is not so great for seasoned investors. Would the real estate agent or developer advise against experienced buyers getting involved?

Not meaning to be rude sir, but you already have five properties, so this wouldn’t suit you. It would suit someone with less experience, a novice, …someone gullible perhaps.

Any property which is a good deal for a first time investor is an equally good prospect for an experienced investor. This phrase just gives the inexperienced an undue confidence boost.

“Are you negative gearing it?”

Gees I better check. Did I mismanage this property such that it is positively geared by mistake?

Dear tenant, it has come to my attention that your rent is so high that I have failed to ‘negatively gear’ this property, and I will need to reduce your rent.

First of all, nobody in their right mind sets out to negatively gear a property and is then surprised to find it’s not making them a loss after all. If this happens to you, congratulations! Add this positively geared property to your portfolio and go try again to buy something that loses money.

Second, the term applies to the outcome, not the strategy. You add up the income and subtract from that all the expenses and if the final number is negative, then the property is negatively geared. You don’t really make a management decision to “negatively gear it” – it comes out “negatively geared”.

“To be honest with you…”

Look, to be honest with you, I have several other interested parties who are ready to make an offer…

Should I be cautious of someone who qualifies a statement with, “To be honest with you…”? Does that mean every other statement they make without that qualification is dishonest?

At least it’s nice of them to let me know when they are telling the truth?

“Long term gainer”

Property has great long term prospects! (Don’t expect to make any money in the short term.)

How long is “long”? How long will I have to wait for that to come true and what happens in the meantime? What does this clairvoyant real estate agent know about the property market that I don’t?

This comment is a reflection of the agent’s opinion about short-term growth prospects – that they’re not great. After all, how can anyone truly know what will happen in the distant future to prices in any market? We may all be living in The Matrix and not even need properties in the future.

“This location will always be in demand”

Don’t be lured in by this phrase. It is technically correct but not helpful for investors.

There are locations that for a very long time have been highly prized by owner occupiers. These are the most expensive places to live in capital cities around the country. But merely wanting to own in such locations, doesn’t affect their prices.

A 14 year old boy will want a Ferrari for example, but that kind of demand doesn’t affect the price of Ferraris. The kind of demand we investors needto see is the kind of demand that actually affects prices, people bidding at auction, turning up to open homes and making offers.

This kind of demand is the very reason why I created the DSR score.

To cut through the euphemisms, get the facts on any property for free with a Microburbs report.


For press enquiries about this article, please call Microburbs Founder Luke Metcalfe on 0414 183 210.

What can the PM afford to buy in Sydney?

Joe Hockey famously advised first home buyers to “get a good job that pays good money”. How about the top job? The Prime Minister of the Commonwealth of Australia earns no less than $507,000 a year. That’s got to give us some serious buying power, right? How much could you really afford in the PM’s home town of Sydney?

First things first, we need to pay tax. Assuming we haven’t got a handful of negatively geared properties already, our tax bill is $202,000. That leaves us $301,000 though, which is still more money than most first home buyers can dream of.

To avoid mortgage stress, your mortgage repayments should be less than 30% of your income, or about $92000. Of course we’ll be getting our loan at the great Microburbs rate of 3.89%.

According to the government’s own MoneySmart calculator, annual repayments of $92,000, at 3.89% gives you borrowing power of… $1,450,000.

Wait a minute. That’s not very much really. The median house price in Sydney is around $1,000,000. The median prices in 172 Sydney suburbs is over our budget!

Naturally anything in Sydney with a view of the Harbour, close to beaches or close to the CBD is off the table. Likewise, the inner west, north shore and more affluent parts of suburbia are way out of your reach.

North western suburbs like Cheltenham, Beecroft and Pennant Hills may be out, but if you’re prepared to go a little further, Castle Hill is a mere 26 km to the city and is still in your budget until the metro opens there in 2019.

Houses in Strathfield are out, but neighbouring Burwood would be ok. Dulwich Hill has become too popular for the likes of the PM, but Hurlstone Park or Ashbury, beyond the reach of the light rail, are still options.

That’s not to say there aren’t some houses below the median price in inner areas.

This inner west terrace house is almost within our budget, with an auction guide price of $1,500,000. Could this fixer-upper be our answer to the Whitehouse or Number 10?

Over to the Microburbs Property Report to find out!

This inner west terrace has a hip score of 8 and an affluence score of 10. Unfortunately it only scores a 4 for safety, so we may need to put on a few more protective services officers.

Of course there’s still the deposit. You’ll need about 3 years of PM’s pay to get that together. Unfortunately, nobody has been able to last in that job that long in nearly a decade.

If you find your mortgage a pain too, you can at least get a better interest rate. Get access to our exclusive lenders and reduce your rate to as low as 3.89% now!

The 10 Fools of Property Inspections. Are You One?

We’ve all seen the guides on what to remember going to a property inspection. But what about the flipside, how to be a stupid buyer? There’s so much stupidity out there, we’d be remiss in not covering it.


1. Ask yourself what you enjoy more: looking for a house or living in one?

You can’t step into the same river twice. Likewise, you can’t count on being able to inspect the same house twice. Maybe it’ll take you many weeks to find the right place, but there’s nothing to say the houses you see will get better each week. For all you know, the first house you inspect could be the best you’ll ever get. Don’t let your dream home slip through your fingers just because you’re hell-bent on a 12 week inspection marathon. Do you want to live with that kind of regret for the rest of your life? You might find another house nearby but that dream home will always be there, rubbing your face in the lifestyle you missed out on. It would be like having a hot ex-girlfriend as a next door neighbour. Don’t go there. Awkward.

To avoid lifelong pain and regret, be open to making an offer on the first place you inspect, because if you pass, there’s no going back.

2. Breathe in the beautiful musky aroma

Sniff around for scent candles and let the aromatherapy do its work on you. Smells work on a powerful unconscious level. Let that calm, rested, homecoming state of mind define you as the agent guides you through the process right until you move in.

3. Listen out for whether it’s a good time in the market to buy

Find out from the agent if now is a good time to get in the market. It often is! Residential property has two main phases; the growth cycle and the stall, or cooling cycle. Like a runner up a mountain, the market needs to occasionally cool down and re-energise for the next long uphill climb. If you’re in a growth cycle, it’s a great time to buy, as prices are moving up right now. If you’re in a cooling cycle, it’s a great time to buy because the market is going to tighten their laces and start on up that slope again at any moment.

Also ask the agent if it’s a good time to sell. There’s a good chance it might be both! If it is one of those uniquely beautiful times in the property market, don’t hesitate, or the moment will pass.

* Data source: Every BBQ and dinner party you've ever been to* Data source: Every BBQ and dinner party you’ve ever been to

4. Check for visual signs of status

If the vendor just happened to have left Perrier out with a few glasses, you know a high status life awaits you. If it’s Champagne, you can deduce that every day will be a celebration of your new found wealth. Remember, if you include the value of the mortgage, you’re sort of about to be a millionaire!


5. Make sure there’s a fresh paint job

What’s the difference between a new house and a newly painted one? Not much! Beauty, as they say, is only skin-deep. If it’s been freshly painted, it’s even better because what’s under the paint – is more paint!

Some negative skeptics say that fresh paint hides damp, cracks and termites but don’t be one of those people. If it looks great with a fresh coat of paint now, you can rest assured that all it will take to keep it in mint condition is another coat of paint.

6. Check the grooming and attractiveness of the agent

Real estate agents are among the most good looking of occupations, so your expectations should be high, particularly for the young junior agent who greets you at the door.

Do be realistic that a senior female agent will have some wrinkles and perhaps signs of aging. This is the 21st century after all! As long as they use enough layers of beauty products and you can tell they would have been a catch when they were younger, give them a pass. But much higher standards should apply to the door girl. When a beautiful 19 year old girl ushers you in the front door, you know something good is going to happen.

Studies show that attractive agents sell for higher prices and are thus more successful (like you), so don’t let an ugly agent try to rope you into an ugly life.


6. Let the agent know you’re a serious big-money player

This is the Australian property market. According to the latest CoreLogic reports, it’s worth $6.2 trillion. You’re playing with the big boys here. Are you the kind of person who says they’re 20c short at the local store when buying a bottle of milk? I would hope not, because if you are, you have no business being in the Australian property market.

This new home is your big step up, so don’t blow it by letting the vendor sense a shred of fear or weakness. You’re a success, aren’t you? Keep face in negotiations by making them an offer they can’t refuse. If you’re prepared to spend $950,000 (the November 2015 median house price in Sydney), then what difference does an extra $100,000 make? It’s not even worth mentioning.

Remember the vendor has welcomed you into their home and even cleaned it up for you. In a strong market, Australian suburbs might be increasing in value by thousands of dollars a week. To start haggling over price would be the height of rudeness. You’re making a major investment, not buying cheap souvenirs on Kuta Beach, you dope!

Remember also that the price you paid for your house is an important status symbol. You don’t want to look like a cheapskate who bought a dud house for a bargain, do you? Don’t even try to lie, because sale prices are on the public record, easily found online these days.

So always do the agent the courtesy of answering honestly when they ask if you want to buy the property. Look them in their beautiful blue eyes and say “I do”.

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8. Share your passion

Likely you aren’t the only one who will call this property home. Be sure to bring your partner and kids along with you to inspect the property as a family. Let your imaginations run wild as you move through the home imagining what your new life will be like.
“This is my room mummy!” “Oh honey, we’ll sit here and watch the kids play on the lawn.” If your little daughter falls in love with the pink bedroom, who are you to destroy her dreams? What price is too high for a parent to pay for their child’s happiness?

Don’t be self conscious about other people at the inspection. Besides, the place is practically yours. Make yourself at home! If you do find your family falling in love with a property, don’t forget to let the agent know, so they don’t accidentally accept a premature offer from some po-faced loner.

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9. If you see loads of other buyers at the inspection, grab it quickly!

Remember, no one does property inspections for fun. Do you think they’re fun? Not even a next door neighbour would be nosy enough to attend an inspection. Obviously if they wanted to see a neighbour’s house they would be invited round for dinner as is customary!

If there are one or two other people flitting between rooms, you might be ok – they might need some time to get their finances in order or just confirm with a partner.

If there’s more than a couple of other people at the inspection though, it’s time to panic. If you like a place, move boldly with a strong offer, maybe slightly above the asking price. If some timewaster is troubling the agent with unimportant questions, feel free to interrupt them and make the offer right then and there. The agent is there to sell, and you’re there to buy, so get straight down to business!

10. And now for the big secret: 66W is your power play!

There’s a secret weapon being wielded all over Sydney and Melbourne right now – the 66W Certificate. Every smart buyer uses it in every hot market, and let’s face it, everywhere in Australia right now it’s a great time to buy.

Our government, in a misguided attempt to coddle indecisive or incompetent buyers, enforces a statutory mandatory cooling off period when buying a home. This law gives the buyers the right to back out even after they’ve made an offer. Although well intentioned, this wastes the time of the vendor and other serious buyers.

You, on the other hand, as a self-assured soon-to-be-wealthy individual don’t need such a chicken-out clause. You know what you want and you’ve seen it.

Be a considerate buyer and waive those statutory rights. First, show the vendor that you’re for real and won’t need a cooling off period. Take the  “66W certificate” straight to the agent and lock in the good life before someone snatches it from you!