Investing in Property

Investing in property? You’ll find it so much quicker and easier utilising a buyers agent based on your own clear financial strategy. Why? Because buyers agent offers you accurate comparison of your options. You won’t need to spend valuable time on prior research, just sit back and compare properties, loans or broker providers.

Investing in Property
Investing in Property...want to maximize the performance of your investment property?

In terms of investing in property you can choose between negative geared property or cash flow geared property. If you need help check out property investments weekly webinars held between Monday and Wednesday nights at 8.00pm Eastern Standard Time or  feel free to contact us.

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Creating your shortlist of properties becomes so much more efficient and accurate when you use our unique investment strategy and exclusive buyers agent. We can help you to better understand your required property investments criteria and create for you an easy-to-digest shortlist of options.

Are you a new or seasoned property investor? Want to maximize the performance of your investment property? When it comes to your finances, it pays to make the right choice. Choose your investment strategy based on your personal goals.

Which of the following should you do before you start investing in property?

  • Sell your home
  • Check your credit score
  • Shop for furniture

Why check your credit score well ahead of the investing in property process? Because if you discover an error, you’ve got plenty of time to go through the official process of correcting it.

When investing in property should you be shopping for a loan? Which status should you seek to give you an upper hand with a seller?

  • Pre-qualification
  • Pre-approval
  • Pre-reviewed

Its important when investing in property to get pre-approved for a loan. Although pre-qualification is free, it’s unofficial and often unreliable. Pre-approval means a lender has looked into your credit and financial situation more closely and will make you look like a serious buyer to the seller.

What is amortization?

  • Process of taking out a second mortgage
  • Process of drowning in debt from a mortgage
  • Process of paying off the mortgage gradually

Amortization is the process of paying off the principal of a loan in incremental payments that gradually chip away at the principal.

Which of the following mortgage terms gives you the maximum tax advantage?

  • 15-year fixed rate
  • 20-year fixed rate
  • 30-year fixed rate

The 30-year term gives you the maximum tax advantage by having the greatest interest deduction.

What percent down payment should you make in order to avoid having to get private mortgage insurance?

  • 20 percent
  • 35 percent
  • 45 percent

Unless you pay at least a 20-percent down payment, you’ll also have to pay private mortgage insurance (PMI). This can sometimes be pretty expensive, so it makes sense to put as much into your down payment as you can.

How much should you expect to pay for a professional home inspection?

  • $50 to $100
  • $200 to $500
  • $800 to $1100

Professional Inspections cost anywhere from $200-$500 but are well worth it. Even with new construction, there can be hidden problems that only a professional inspector may find.

Which of the following types of real estate agent works for an office that does not take listings of any kind and represents only buyers?

  • Exclusive buyer agent
  • Single agency buyer agent
  • Dual agent

An exclusive buyer agent represents only buyers and does not list properties. A single agency buyer agent (SA) works for an office that represents both buyers and sellers but will not represent both in one transaction. A traditional buyer agent might work as a dual agent, representing both buyer and seller in one transaction.

If you sign an agreement with a buyer’s agent, which kind of clause should you make sure the contract includes?

  • Fee escalation clause
  • Release clause
  • Lemon clause

Make sure you have a “release clause” in your buyer’s agency agreement just in case you find out you just don’t like your agent. This will allow you to sever ties without any future problems.

After a seller has told you he has agreed to accept your offer and then backs out, what’s your legal recourse?

  • You can sue and most likely get the house back.
  • You can sue for fraud and damages, but you probably won’t get the house in the end.
  • You have none because a verbal agreement is non-binding.

Unfortunately, there’s not much you can do short of pleading with the seller. Verbal agreements aren’t binding, and you’ll find that you have little legal recourse.

Which of the following isn’t a typical fee you’ll have to pay in closing costs as a buyer?

  • Seller’s agent fee
  • Notary fee
  • Escrow fee

The seller is responsible for paying the seller’s agent, not the buyer. The escrow fee is a typical fee for a neutral third party to hold the funds during negotiations. A notary should be paid to notarize the documents.

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Investing in Property

Why Invest In Property? | How to overcome paralysis of analysis?

Why Invest in Property?

Why invest in property? Because real estate via property investments continues to be reliable and proven to be a constant, remarkable stable investment choice in Australia.

While there’s some risk in any type of investment decision, here are a few facts…

Property value has increased on average 8% per year historically over the past 100 years. This period includes two World Wars, major conflicts in Vietnam, Afghanistan, Palestine, Iraq, recessions, global crises such as 9/11, SARS, emerging markets crisis, and even latest global financial crisis (GFC).

Why invest in property? Identify growth areas and targeting neighbouring suburbs which grow next. Discover suburbs producing 10-30% sales price growth.There are increasing rental demands and more coming needing people like you.

why invest in property
Why invest in property? Property investments are not just for the wealthy...

Why invest in property? There’s a current backlog of 200,000 residential properties needed, a number increasing by a further 30,000 homes per year.

It means there’s an undersupply of developed land and a shortage of funding for development
companies, there is a serious shortage of housing in Australia, no wonder many experts call it a
housing crisis.

Why invest in property? Through natural population increases and new arrivals to Australia, our population grows by about 400,000 per year. This alone demands an extra 133,000 homes a year, assuming an average of three people per household.

As a result of continuous demand, property prices and rentals rise steadily. Along with strong demand from renters and assistance from the government to assist supply, property investments
are the envy of the developed world.

The only real risk for new home buyers and property investors is in not knowing how to invest in property and trying to go it alone by making costly mistakes simply through a lack of research or knowledge.

Why invest in property? You need to use a proven step-by-step process to support you from initial financial analysis all the way through to selecting investment properties, finance and perhaps the property management.

Property Investments Now has over forty years of collective experience in the Australian property
market and access to the latest past history and future growth property investment information
from independent research companies, we can help you with free investment advice on property
investments.

How to Overcome Paralysis of Analysis?

New home buyers and property investors reading lots of books, attending real estate seminars and
meetings often feel paralysis of analysis.

There’s so much information available you don’t know what to pay attention to and its so overwhelming and contradictory you wonder how anyone ever figures it all out…

Every month, there’s another speaker with another opinion on the killer strategy for this and
that. You’re overwhelmed and you can’t seem to get out and actually do anything, right?

Adding to the problem, every successful investor defends their strategy as the only strategy.

Although they’re trying to be helpful, they often add to confusion experienced by new home buyers and property investors trying to make sense of it all.

What if new investors don’t start making offers in the first 2-3 months? The reality is they almost never get around to doing it at all.

Why invest in property? The fear of doing deals only fades with action, which means actually doing deals so no amount of theory or book-learning ever gives you the confidence you need.

Stop trying to learn everything and start focusing on what you need to do to make your first deals happen:

1) Some idea of what you want your real estate to do for you. Know this, and you’ll have a good idea of the exit strategy AND the type, condition, areas, and price range of properties you
should be looking at.

Want quick cash? You’ll need to wholesale properties. Looking at anything other than family junkers is a waste of time. Eliminate other properties and from your thinking and move on.

2) A working knowledge of how your one exit strategy works. Building on previous example, once you know wholesale deals are sold to cash buyers for 60%-70% of as-is value…

a) You know how to calculate an offer

b) You need to start finding buyers now

3) Two or three strategies for finding the types of properties you want. Whatever your chosen strategy, finding the good deals consume most of your time and energy.

Use 2-3 methods all at once for a few weeks. Discard those which fail and amplify those that work, but always use more than one-way at a time.

4) The ability to evaluate the properties you’re viewing. In the case of junkers, you’ll need to know how to find the after-repaired value and the cost of the repairs.

Don’t worry about figuring out what the property will rent for; it’s not important to your plan. If your plan is to buy and hold, you’ll need to learn how to calculate the return on investment (ROI).

5) You need a professional team and a contract which keeps you out of trouble. Why do you need to know how to do a title search when there are folks who do it for a living?

Sure, it might be good to know later, but it isn’t crucial for you to know right now. And if you have a well-written purchase contract which allows you to get out of a bad deal before it closes and an experienced mentor to help you through your first few deals, how can you lose?

Why invest in property? Because now instead of a million steps to learn, you have only five. Go one better, you’ve absolute most effective strategy for buying and selling property just get out there and do some deals.

Why invest in property? Would the positive cash flow be less than helpful?

Why Invest in Property?

Why Buy Investment Property?

Before you buy investment property, you could ask yourself a few simple, yet powerful questions.

 

The content is general in nature and it’s important for investors which may be contemplating buying investment property to note further investigation is required in order to identify specific properties for investment potential…

According to Australian Bureau of Statistics (ABS), 97% of people aged 60 or more are in some way reliant on a government pension. In case you don’t know how much a pension is worth, imagine trying to survive on $15k pa (if single) or $24k pa (for a couple).

(a) Debt free family home still doesn’t produce income for utilities, food, transport, hobbies, and holidays

(b) Superannuation will be nowhere near enough to replace the income required to live life on your terms

(c) A “rule of thumb” formula for calculating the size which your investment portfolio (net of all liabilities) needs to be is to multiply the required income stream you want by 20.

For example: Required income (debt free) x 20 = Investment portfolio value (net of liabilities) $80,000 pa x 20 = $1,600,000

(Above figure excludes the value of your family home and does not factor inflation)…

buying investment property
Buying investment property with a focus on successful investment properties in highly sought-after locations

First question, “am I buying investment property or (PPR) principal place of residence? Next, “why would I buy investment property”? The answer to both questions is where to buy and what area(s) you know or feel comfortable?

Buying investment property or principal place of residence in context to if you are going to live there?

Generally speaking, any in market it is important to understand capital growth cycles, (structural change which is occurring) your target market (demographics, right style of property for right location) and population growth.

Key is understanding how the contract does not get in the way of closing deal because the contract must protect the interests of you as the developer and ensure settlement takes place smoothly. Of course, you want the maximum financial return, right?

Investment property has many different purposes, you are wanting to maximise your wealth via property investment so you need to factor your capital, borrowing capacity, lending institutions combined with macro and micro indicators.

Buying investment property involves due diligence with a clear strategy to focus on, which can give you real confidence you are investing based on correct research criterias and more than just a gut feel.

Buying investment property the infrastructure investment: The government and private enterprise spend billions of dollars each year on roads, transport, hospitals, mining, resources etc…

Look at what they are spending funds on and what impact the infrastructure has long term in those areas.

Buying investment property the populatIon growth: The Australian national population growth rate was 1.7% or 394,000 new residents in Dec 2012. Take note of where those people are moving too. Is it a capital cities, regional cities or regional areas? We also look at interstate migration, which is generally associated with employment opportunities or lifestyle choices.

Buying investment property the economy and employment factors: What is the diversity of industry? Consider what business/industry is in the area you are investing in.

Does area have a cross section of industries that can support current and future employment or is it reliant on one main industry?

Buying investment property the supply and demand relationships: Is there an oversupply or undersupply of residential housing? If there is an undersupply you are likely to see increased rental income and improved cash flow for an investor.

In this scenario you will also see a lowering of the vacancy rate. Undersupply could also put pressure on property prices. With an oversupply the opposite normally occurs for an investor. Rents decrease, vacancy rates increase and property price can decline.

Amenities: The better the amenities are the more attractive an area become for people wanting to rent. Look for good employment, schools, shopping centres, medical facilities, sporting facilities and café lifestyle.

Transport is a very important consideration: Look for a combination of good public transport and does it service the area well especially in the exact areas you are looking to invest in?

Buying investment property and rental yields: Rent yields are determined by the supply and demand of property. When investing it’s finding the balance between your rental income and cash flow.

If there is an oversupply of rental properties your rental income will reduce. This affects affordability and holding costs for investors.

Value: Look at the price of the property relative to similar properties in the same area. This will give you an idea of the real value of the property. Also consider the likely resale value by looking at the properties that are currently being sold in the area.

Design: Take a good look at the design of the house. Is it practical? Will people want to live in it? Does is have good natural light? What aspect does it face? What is the internal size of the property as this could affect future resale?

Projected Capital Growth: When you look at the macro and micro indicators to help you decide where to invest you give yourself a strong opportunity to see long-term growth with your property.

You can clearly see the crucial relationships of due diligence and number crunching in conjunction to all the above and using these macro and micro indicators which can really help you answer the big and important question, where do I buy?

If you want to know more about  buying investment property please click here to contact us.

Buying Investment Property