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So I've bought my first property..

Discussion in 'Real Estate' started by Sk3tChY, 2nd Jun, 2008.

  1. Sk3tChY

    Sk3tChY Well-Known Member

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    Well I'm 21, and have just recently purchased my first property, all thats left now is this 6 week settlement period, then its time for me to move in.

    For those of you who are interested, its a unit situated in Caringbah, which is in the Sutherland shire. The location in my opinion is great, its literally across the road from a coles, a 5 minute stroll from the train station, and minutes away from Cronulla beach, and a massive Miranda westfields. It has 2br, a small study/dining room, as well as a shared lock up garage. I paid $228,000 fro the place, and can probably fetch $275-$300pw in rent once I fix it up a little bit.

    Heres a few more details and some pictures;
    http://www.domain.com.au/Public/PropertyDetails.aspx?adid=2006946152

    Anyway, im a first home buyer, and have never moved out of home, so generally I'm not to sure on where I stand now as far as moving into the property is concerned, and setting things up, so I have a few basic questions;

    1. Electricity - Who do I go to? And am I entitled to get it set up now, or do I have wo wait until the 6 weeks is up? Is the right thing to do, call them now, and organise for them to hook it up the day of settlement, or day after?

    Edit: I had a bit of a look about.. And it looks like I should all the Electicity company and organise to have them hook it up on the day of settlement..?

    2. Am I at all entitled to start moving anything into the property? I'm under the impression that I can't, and that the property is legally still theirs until the settlement date, but just checking.

    3. Are there any general small things you do when moving into a new house? So far I figure I should change all the locks on the doors, and give the entire house a thorough clean, and the carpet a steam clean.

    Cheers, any advice would be great.. My main concern is the Electricity.. :)
     
  2. DaveA

    DaveA Well-Known Member

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    what about insurance???

    this is more important that anything else id imagine...
     
  3. AsxBroker

    AsxBroker Well-Known Member

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    Hi Sketchy,

    Ring up a few electricity providers and find out what deals they will do. I'm with AGL for both electricity and gas. They gave us a few hundred bucks credit for electricity :) We haven't had to pay an electricity bill yet! Though we do have to pay for gas!

    Energy Australia is another electricity provider (not sure if they do gas, I heard they don't bundle it anymore) and have PowerSmart (EnergyAustralia - Introducing PowerSmart Home) which charges you based on the time of day (ie, 10pm to 7am is cheap as, 7am to about 2pm is so so and then 2pm to 8pm is very expensive, 8pm to 10pm is so so for weekday). If you work fulltime 9 to 5, I'd suggest going PowerSmart if you don't have gas.

    We saved about 10% of our power bill by running wash in the off-peak time and then hanging it (instead of using our dryer unless it was raining), admittedly it drove my wife bonkers, as I'd run the wash at 10pm and we would have to hang it before going to bed...Though if you like the green idea of using off-peak electricity etc.

    Cheers,

    Dan
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Electricity isn't actually connected/disconnected like phone lines are.

    You just contact the electricity company some time before settlement and arrange for your account to be set - I think they'll ask you for the date you are moving in. You can do it online for most of them (on the AGL website there's a link on the right called "Move in/out and connect")

    AGL specify:

    ... so you only need to give them 3 business days notice (but you can do it now if you want).

    Only with the permission of the current owners. They are under no obligation to allow you access until settlement - and in most cases they won't want to give you access for legal reasons. It doesn't hurt to ask.

    Step 1: check the contract for any fixtures and fittings that were included in the purchase price and make sure they are all there and operational. If not, they have an obligation to repair them for you.

    Check the property thoroughly to make sure everything is in good order - the property should be presented to you at settlement in the same condition (or better!) than it was when you signed the contract.

    If something didn't work when you signed the contract and it wasn't specified in the contract that it would be fixed by the vendor, then they'll probably refuse to fix it afterwards.

    ... but as previously mentioned - if you don't have building insurance yet (with liability cover), at least get a cover note IMMEDIATELY ... even though you haven't settled yet - you still have a legal interest and liability in the property - if something happens to the property or to someone at the property, you could be in trouble.
     
  5. Sk3tChY

    Sk3tChY Well-Known Member

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    Thanks.. Ok..

    So can I use any electrical company, or do I need to use a specific one..?

    If I can use which ever company I like, could anyone perhaps recommend a few, so I know where to start looking.

    And Sim, how much would building insurance roughly cost? And what exactly does it cover?
     
  6. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    You can use any electricity company. I use AGL like Dan does.

    Some electricity companies:
    Suppliers, Home Electricity & Energy - AGL Energy
    Residential Home Electricity - TRUenergy
    EnergyAustralia - Residential
    Electricity Supply, Natural Gas Supply, LP Gas Supply - Origin Energy Australia


    I'm not sure how much building insurance costs in Sydney - I don't own any property here, so I only pay contents insurance.

    You can generally get quotes online - look at a variety of insurance companies.

    Here's one calculator: NRMA Insurance - Home Insurance

    You will probably want Building + Contents if you are moving in yourself.
     
  7. Sk3tChY

    Sk3tChY Well-Known Member

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    Well as ignorant as this may seem... I don't really know if I'll need insurance...

    The area I'm moving into is quite good, I'll be making sure to have proper security locks on all doors and windows and will have my own surveillance system running 24/7..

    Not to mention the only things I'll probably ever have worth stealing in my place would be the computer and television, both of which I would imagine being hard to steal without someone noticing, so contents insurance probably isn't necessary for me.

    Building insurance though, possibly.. I know strata covers a lot of the external building damage and the likes, so what types of scenarios would insurance save my bacon? If the place were to burn down to the ground?

    ps: Thanks, I'll look into some of the electrical companies and try find the cheapest for me.. I wont be using gas at all, so its just electricity I'm after, is there any stand-out cheaper company from the rest?
     
  8. AsxBroker

    AsxBroker Well-Known Member

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    Hi Sketchy,

    Strata usually covers the cost of the building, you can double check the last strata report to see how much the building is insured for.

    Contents insurance doesn't just cover for theft, it also covers for accidental damage and fire damage.

    You'd be surprised how insanely affordable it is, your actually more insane not to have it! For a few hundred a year, can you afford not to have insurance?

    Cheers,

    Dan
     
  9. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Check your loan contract - you may well find that building insurance is mandatory.

    I'm not familiar with strata laws in NSW - so check with the strata corporation - they may have full building insurance that covers you - but check the details of the insurance contract to make sure it is reasonable or if you need to provide your own supplementary insurance as well.

    Don't forget - at the end of the day, if the building burns to the ground or something else happens so that it becomes unlivable (and unrentable), you will still need to make payments on the loan! So make sure you are covered.

    And don't imagine that things are difficult to steal - you'd be surprised what people are able to get away with. Contents insurance is not mandatory - but you need to consider the cost if A) you get robbed (don't assume it can't happen!), or B) the building burns down and you lose everything (don't assume it can't happen!), or C) your unit gets flooded because of faulty plumbing (check your insurance contract to see if this is covered). These are just some examples - many other things can happen to your contents too.

    Don't forget that your car insurance may not cover certain items that you carry with you in the car when driving - whereas your contents insurance may do so.

    You also want to make sure you have some form of third party liability cover for your unit - if someone enters your property and gets injured, then you may be held liable. This is a standard part of most insurance contracts. You may have some coverage for this as part of a body corp insurance contract - but check how much it is and whether it covers inside your unit or just common areas. You may want to take out extra coverage for liability cover - at least $10million
     
  10. Sk3tChY

    Sk3tChY Well-Known Member

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    Thx sim... I'll definately have a closer look at the contract...

    I'll see where I stand insurance wise then. :)

    Thx for all the help.. :)
     
  11. Young Gun

    Young Gun Guest

    and don't forget income protection
     
  12. Sk3tChY

    Sk3tChY Well-Known Member

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    income protection? :confused:
     
  13. Billv

    Billv Getting there

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    Sk3tChY

    Congratulations on your purchase, it's in a good spot.
    Have you been looking long and which lender are you using?

    Cheers
     
  14. Jacque

    Jacque Team InvestEd

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    Hi Sk3 and Well done!

    At 21 you're ahead of most other people your age already, building up wealth now instead of frittering away cash on non-depreciating assets. Congrats! :)

    I can't really add anything much to what others have here re:insurance and electricity, as it's been pretty much covered. However, keep in mind that the building insurance that the BC holds will not cover you for damage by tenants or loss of rent, should they do a runner on you. It will also not cover the contents of your unit (furniture etc) and carpets, and Sim is right, in that you will need to take out separate PL insurance if anything happens to anyone (tenants or visitors) within your unit or your carparking space/garage.
    I would suggest taking out landlords insurance, once you have a tenant in place and talking to several insurance firms to get a few quotes. I use AON in Sydney for IP's and NRMA for my own home and contents. So far, so good, but I'd advise shopping around. Best of luck with it all!
     
  15. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I use CGU for my building and landlords insurance on my IPs (arranged through an insurance broker) and NRMA for my contents insurance in Sydney.
     
  16. Sk3tChY

    Sk3tChY Well-Known Member

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    Yeah, I've had my eye primarily on Parramatta, and Sutherland Shire area.. Originally I was planning on buying in Parramatta, as I think its a much better investment oppurtunity, but then things in life happen, and so I had to opt for the Sutherland Shire area.

    I'd been skimming over proprties in the area for quite a while, and really knew what I wanted;

    - 2 bedroom
    - Decent size
    - Good Layout
    - Old style (in need of renovations)
    - LUG
    - Balcony
    - Internal Laundry
    - Near Public Transport
    - Near Shops
    - Near Schools

    However for my budget I figured it would be pretty damn hard to find a place that fit the criteria, a place like that in the area can easily go for $300k+.

    When I saw this place, it fit a lot of the criteria, more then any other place, and was actually quite large for its price (65sqm + garage which is 17sqm i think). Basically the only thing it didn't have was a balcony, and internal laundry. The internal laundry is no issue, I can easily fit a washing machine in the bathroom or study/dining room when I renovate. So basically its only downfall in my eyes was no Balcony, but for the price, this place was a bargain, once I fix it up a little bit I could possibly get as high as $300pw in rent, which seems quite impressive to me for a $228k property.

    For my lender, basically I just opted to use Mortgage Choice, several other people here recommended using and independant broker, but at the end of the day I think if your going to be using one of the bigger lenders then you probably won't see much of a difference.

    I went with ING in the end, it fit my criteria.. I was basically just after something with a <9% interest rate, that I could set to I/O and have the ability to redraw at anytime without cost, no fee's would be a bonus. With the loan I got, I basically got everything I wanted, there was no setup or ongoing fee's either.

    The person from mortgage choice has connections in ING, and so basically everything was approved for me in a couple of days. :)

    Jacque: Thanks.. :) You gave me a lot of useful advice a while ago when I was planning on buying a property.. And I'll definately be looking a little more into insurance once I move in, I didn't really know of all the possible dangers of not having it could be.

    When I rent the place out I'll definately get landlords insurance, I've heard so much stuff about people getting screwed over without it.

    As for the home and contents insurance.. Depending on the strata agreement I may get home, as for contents tho, I'll probably wait until I actually have some contents worth stealing, I'll basically only have a TV and Computer worth stealing for a while, which is prob going to be well under $5000 worth of stuff.

    My last query tho, what is the type of insurance that covers you for people getting hurt on your property?
     
  17. GavinC

    GavinC Active Member

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    I second this, your most important asset is not your new home, it's you. I would suggest talking to a financial planner about an appropriate level of cover, but you can check out the options online if you want.

    One thing to remember - super funds generally offer 2 years cover really cheap, and you can get the balance independently (ie with a 2 year waiting period) - the premiums don't cost so much for this (I pay about $30 a month, it costs more if your older, but you are a little younger than I am). You may already have some cover under your super fund and not even know it.

    FYI a typical income protection policy will pay you 75% of your wage if you get sick or injured and can no longer work. Sure beats a pension, especially if you are on more than average earnings, or anticipate that you will be. Some will even pay super for you while you are receiving the benefit, so that once it cuts out at 65 your super has built as well.
     
  18. Sk3tChY

    Sk3tChY Well-Known Member

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    Hmm Gavin I think I'm a little lost..

    By income protection you mean I should still have some form of income shouldI not work for any reason..? I don't really think that would be necessity for me, I have over 5 weeks leave or something saved up for my current position, and they need to give me something like 4 weeks notice should they be letting me off.

    As for being sick or unable to work and what not... I can't really see a reason why I would ever be unable to work for any longer then the amount of leave I've accrued..

    I work in I.T. so generally it would take a major injury or sickness to prevent me from working.

    At the same time, I can understand that income protection would be very important, I guess its just a risk I'm willing to take. Should worst ever come to worst I can rent the property out and rent should basically cover the majority of the interest repayments, so I always have something to fall back on.
     
  19. GavinC

    GavinC Active Member

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    I don't mean to carry on too much, but if you ask yourself these questions you may appreciate why this insurance is so important. I don't expect to make a claim on my own, but if I did it is reassuring that it is there and I wouldn't have to rely on my family or sell my assets.

    Regarding insurance to cover public liablity - this should form part of your building insurance I believe.

    And congratulations on your purchase!
     
  20. NatMarie73

    NatMarie73 Member

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    With young males having the highest rate of car crashes and getting bashed on a night out, I think this insurance would be paramount for you. If you are involved in a car accident and in hospital/recovery for a few months (or worst case scenario left a paraplegic) you could be ruined financially. If I were you I would also get Total and Permanent Disability insurance. Check your current super plan, you will find that most offer income protection and TPD insurance at very reasonable rates.

    And in regards to home and contents, I remember when I had a unit that the strata building insurance did not cover internal fixtures and fittings such as floors, carpet, kitchen cabinets, bathroom fittings etc. It is easier than you think for something to happen eg a fire on the stove or burst water pipes in the unit above that would not be covered under the building insurance.

    Insurance is really not very expensive, and well worth the peace of mind that you are covered financially if anything happens.