Everyone loves property investment advice, right?
You may be wondering:
“How do I find property investment advice that actually works?”
Well today we will make it really easy for you.
Here are vital pieces of advice any investor could use to help them become more successful and profitable in their investments.
1. Focus on your goals and how they look like over the short, medium and long-term.
2. Before you start, make sure you have a pre-approval in place. It could be really disheartening searching at a particular price point and realising you have a much lower budget than you thought.
3. Structure your investments like a business and make calculated choices. Correct structuring will determine who pays the tax and how much tax would be paid.
4. A tip for beginners is to create a savings plan. Have a percentage of your pay go automatically into an online savings account designated for your investments. There was a first home saver initiative run by the Government which was abolished in 2015.
5. Timing the market is important, but timing in your life is even more important. Buying property for many is a very emotional and confronting experience. You shouldn’t buy property if you aren’t in a position to do so.
6. Understand the investment strategy you want to implement.
7. Don’t get into property if you expect instant riches. Historically investing timeframes are from 5+ years, though you can add value to the property in shorter periods of time.
8. There is no single best strategy for everyone. Your strategy should start with your budget and your goals.
9. The strategy you implement will determine the level of risk. Try implementing low risk strategies, particularly if funds are limited.
10. Create a criteria of 2-5 points you must have in the property. This will keep you on track and save you time.
11. Investing before buying your first home gets you into the market. The biggest hurdles first home buyers face are upfront costs and holding costs.
12. If you buy a first home instead of an investment, you could rent out a portion of it to help with the mortgage repayments.
13. There is no such thing as a best property, only ones which meet your requirements and ones which do not.
14. The buying process shouldn’t be pressured. Yes, good properties sell fast, however do your research before committing.
15. Cash flow is crucial when investing over the medium to long-term. Make sure you choose a property that will place limited pressure on your finances. Test the cash flow at different interest rates and vacancy levels and create worst case scenarios.
16. Your portfolio can have numerous strategies from positive cash flow, negative gearing and capital growth development.
17. You don’t have to be limited to your state or region. Capital cities such as Sydney, Brisbane and Melbourne have the largest populations in the country. A growing population needs more accommodation.
18. Media outlets have a tendency to blanket markets a certain way. This does not represent what is actually happening in a specific suburb or street. If they did this properly, a ten second news report would last hours.
19. Buyers with limited money sometimes look towards off the plan projects with long-term settlement timeframes. This enables you to save towards a greater deposit whilst the property is constructed.
20. Taking the time to make the ‘correct’ decision helps you understand what you want and what you do not want, however, time is the deciding factor why property markets rise.
21. If you use a professional buying service, make sure you feel comfortable with the person helping you.
22. Don’t believe everything agents or ‘property investment companies’ tell you. Everyone has a hidden agenda. This makes unbiased advice crucial in deciding the best option.
23. ‘Seminars’ targeted at investors are often a ruse to sell you on some agenda. Be very careful. Maybe ask the question, why does the company need to have a seminar? If you had secret property investment advice to make millions would you give it away for free?
24. Investing in property is not about looks. The prettiest is not always the best. Don’t be conned by a glossy brochure and fancy video.
25. Understand how capital gains tax will affect your end profit when investing in the short-term.
26. The bottom line in successful investment is Location, Potential, Cash Flow and Convenience.
27. Lending criteria is constantly changing, your mortgage broker should be able to guide you through these changes.
28. Buy an investment which has multiple exit strategies. These include renovating, development, rental, subdivision, second dwellings and extensions.
29. When investing, think quality, not quantity. A single well thought out property, does a lot more for you than half a dozen ‘affordable’ ones in regional areas.
30. Markets go through cycles around the country. Some have periods of fast increases, whilst others have prolonged periods of limited growth.
31. Be careful of media hype around certain regional areas, it has been a poor proven method of success.
32. Supply and demand determine whether property markets rise or fall. Areas in high demand often have limited supply or housing for sale in prime locations.
33. Secondary factors affecting prices include, new infrastructure projects, demographic changes and local economic changes.
34. Don’t compare yourself to your friends or co-workers. Run your own race. When you feel the time is right, be bold and brave.
35. Understanding the value of the property helps you invest at the correct price level and makes negotiating a much easier process.
37. Look for something unique in your investment. Maybe it has only one neighbour, a really nice aspect, in a peaceful location or has value adding potential.
38. Walking distance to amenities such as schools, shops, eateries and entertainment is a massive bonus. It not only adds convenience for your tenants, future re-zoning changes often happen in such locations.
39. Having a number of employment industries nearby would make finding a tenant much easier.
40. Understand the running costs of the property. Include council rates, water rates, property management fees, strata rates (if applicable) and repairs.
41. Organise a pest and building inspection on the property, particularly if you plan to buy and hold for a period over 2 years.
42. Once you believe in a certain property, have done adequate research and secured it, don’t second guess yourself. Be confident and look forward to implementing the next stage of your plan.
43. There is never a perfect property. Find ways to turn the negatives into positives. In many cases this is a way to add value to your investment.
44. Having a north or easterly aspect is most prized by buyers.
45. Different sides of a street can vary in price by hundreds of thousands of dollars. Views, noise, traffic, access and slope affect the desirability of the home.
46. Boutique buildings hold their value better than larger buildings due to scarcity.
47. Large buildings have higher strata rates than smaller buildings in the same area.
48. Double brick, masonry, stone or concrete are regarded as some of the more valued construction methods. Brick veneer is very common and acceptable.
49. Courtyards or views are highly valued in strata complexes. Typically only a small portion of occupants in the complex will have them.
50. Parking spaces become scarcer and more expensive closer to the city.
51. Great advice to ask yourself is, “why hasn’t it sold?”. Answering this question will go far in determining whether the property is right for you.
52. Try to not be fooled by auction price guides particularly in Sydney, as agents in many cases are pricing 10-20% under where it will likely finish.
53. Be aware of rental guarantees in certain instances. If a property is good enough it wouldn’t need one.
54. Have a good conveyancer / solicitor review your contract. Paying a few extra hundred dollars to someone who knows what they are doing gives you peace of mind.
55. An exchange occurs when you have paid a 10% deposit and signed the contract. This happens after a 5 day cooling off period, unconditionally with a s66W Certificate or under auction conditions if you are the successful bidder.
56. Settlement periods are negotiable, they are around 42 days from the exchange. Early access can be granted for renovations.
57. Speak to your tax specialist or accountant to claim everything possible including expenses, depreciation, interest repayments and repairs.
58. It would be highly recommended to use a property management professional to find you a tenant and look after the day to day running of the property.
59. A dollar for dollar rental yield is 5.2%. If your investment costs $1,000,000, then you would be achieving $1,000 rental per week.
60. Take care of your tenants and keep them happy. The longer you keep your tenants happy, the longer they will stay.
Contact us if you need property investment advice.