Tag Archives: investment property

The Right Ripple Effect on Property Prices?

“What is The Ripple Effect and How To Predict Property Prices…” 

Investing without fear, will the right ripple effect on property prices your purchase?  What if you ride ripple effects to maximise your property profits?

Yes, ripple effect applies at any stage of the property cycle.

Researchers call it the ‘ripple out’ effectproperty booms usually start in the inner city or prime areas and radiate outwards…

Prices rises in suburbs close to CBD, then spread out to middle-ring suburbs and later to outlying areas.

property prices
Most property investors rely on hope and a prayer…

The ripple effect is when demand for property outstrips supply.

We see property prices rising in a given area (often sharply)…

Generally buyers set a budget and they’re restricted.

This budget restriction results in some buyers being forced out of their original target suburb as prices rise.

Usually buyers want to stay close to their original target suburb so they move to the next suburb they can afford as a compromise.

Trend continues, pushes up prices in adjacent suburb…

This forces buyers that originally targeted adjacent suburb as their primary suburb to move on again.

It means targeting the subsequent adjacent suburb which is based on affordability.

Some factors and stats point to ripple effect as the most powerful driver of all in determining why suburbs increase in value…

This ripple trend continues out to the regional cities as more buyers investigate or weigh-up price discrepancies across towns and cities.

And begins to make lifestyle choices…

Most people underestimate the significance of the ripple effect.

So many aspire to live in a suburb of their choice and they can’t be accommodated.

They end up having to go elsewhere and this usually means moving further out.’

As a savvy property investor it may be possible to take advantage of this demand and trend within the ripple effect.

Just be aware  the ripple effect also works in both ways.

When buyers, for example give up on ‘higher priced suburbs and switch to buying quality in the inner city.

The best way to identify outperforming suburbs and the next best suburbs that haven’t yet surged is to analyse price data.

And target suburbs likely to benefit in near future as a result of the right ripple effect.

For example…

What if you identified a suburb that hasn’t yet shown any significant price movement?

And yet the adjacent suburb has already shown strong growth?

Would it be worth checking out further?

It could be a pointer to increasing capital growth, right?

Property buyers target suburbs which in the past year have shown under-performance in context to five-year growth averages.

If these suburbs are located beside others with higher growth rates in the past year, they almost always experience a catch-up effect.

Always check council’s website for what’s happening in the zones.

For example…

Check planning permits applications submitted and if freeway is not about to slice through an area before you invest.

You should also check whether shopping centres and schools are earmarked for closure.

That could affect the supply and demand plus demographics of the area, which would skew all the price data.

What fuels the ripple effect is any low or medium-income household has to move, either to outer suburbs or switch to a different type of accommodation…

Are ripple effect suburbs an excellent opportunity for property investors?

Property Prices

Why You Want Investment Advantages?

What Are Your Investment Advantages?

As an investor, you want investment advantages because how do you manage your own investment portfolio and take advantage of unique tax benefits?

Property investment success, in all it’s shapes and sizes, whatever it means to you…is all about preparation, focus, determination and action with mitigated risk taking…

Being focused in property requires a solid business plan. You need to be prepared and organised to know where you’re going. This is why you’re setting your goals clearly in writing, right?

This is where preparation meets motivation…once you put your pen to paper and start visualising and framing the end results in mind, it has far more graphic impact and motivation in achieving your goals.

Thinking about what you want to do and why you want to do it, is the first step in understanding your motivation to do you want to do…are you wanting to buy-and-hold or flip houses? If you prefer quick flips, ask yourself why?

investment advantages
Time to invest…that’s why you want clearly defined investment advantages

You want to know what property type and market to invest in, as well as the price range as this sets the frame work or structure in a firm business model:

1. Preparation and thoroughness means doing your due diligence, which means you’re not making any emotional decisions or taking on commitments unless you know and understand the results of the research you have done.

Next step is speaking to three real estate agents to get a sense of the market and whether property you’re interested is a good deal and stacks up in terms of research you’ve done via property research institutions…

You want a well structured, defined, yet flexible investment strategy. Why? Because if you too get rigid in your way of thinking, you could miss the target, even though all of the peripheral indices and factors tell you to rethink the road they’re going down…so you want to be flexible and open minded.

Prudence means protecting your investments via risk management, and this strategy includes using the experience of a street smart and successful real estate agent, property inspector, lawyer and tax accountant as part of your team.

Many investors try to go it alone don’t know how to handle the market ahead of them and fall into a series of unexpected problems. The right team supporting you can save you time, money and your peace of mind.

Determination means more than staying motivated in tough times because you want to know and understand the bigger picture in mind. You see, the reason why a lot of people make emotional decisions when it comes to real estate is because they’re not serious in treating investments as a business.

More often than not, they’re inexperienced investors or just naïve in seeing real estate in a very simplistic short-term perspective, so they’re not clear about the end results and time frames.

They’re often affected by all of the negativity and fear mongering out there. If you look at the bigger picture, you’re not going to make short-term, impulsive decisions.

You want to use your investment advantages because you understand and apply the fundamentals, which means you’re not reinventing the wheel that many successful investors already use to make millions of dollars in real estate, right?

Investment Advantages

What Does It Mean to Get Preapproval for a Mortgage Loan?

How to finance your property investments?

Preapproval  and the reality is for most residential real estate investments you can borrow to buy an investment property...

People interested in buying a house can often approach a lender, which check their credit history and verify their income, and can provide assurances they would be able to get a loan up to a certain amount.

This pre-approval can then help a buyer find a home, which is within their loan amount range.

Buyers can ask for a letter of preapproval from the lender, and when house hunting or shopping for a home get a possible advantage over others because they can show the seller they are more likely to be able to buy the house.

What Does It Mean to Get Preapproval for a Mortgage Loan?
What Does It Mean to Get Preapproval for a Mortgage Loan?

Often real estate agents prefer to work with a buyer which has a pre-approval as it demonstrates they are well-qualified to receive financing and are serious about buying a home.

A pre-approval is based on documentation the borrower supplies at the time of application, and any actual eligibility to receive the pre approved loan depends on terms and conditions of the pre approval and ability to secure the loan before the pre approval expires

Why get preapproval for a loan? Because you’ll be in a better position to negotiate, and understand the whole process involved before pulling the trigger.

Before starting the preapproval process, get familiar with your credit and how credit works. Review your credit reports to be sure there are no errors.

Mistakes can hold up the process and prevent you from getting the loan you deserve. Mistakes can also be fixed, but the process can take a while.

Choose a Lender: Shop around for a good lender. Check with banks, credit unions, and online lenders to see what they offer. They all cater to different borrowers, so figure out which one is the best fit for you.

A local credit union is often a good starting point, yet credit unions do not always offer the best rates.

Find out what each lender’s interest rate and fee structure would be. If you’d like to have the option of paying off the loan early (who wouldn’t?) then investigate prepayment penalties.

Finally, make sure it’ll be convenient and affordable to pay the way you want to pay — by paper check, bill pay, or electronic transfer.

Get Prepared: When you get preapproved, your choice of lender needs relevant information from you. Get information ahead of time so your application can get through the underwriting process.

Lenders want to know about your finances. You’ll need to document how much you earn (you need income to repay the loan), and it may help to show you have other assets available to you (such as cash in bank accounts).

Your lender may ask for the following items, and more:

  • Pay stubs
  • Bas statements (PAYG) instalments
  • Tax returns
  • Bank account statements
  • Other account statements

You may not need to provide copies of these documents in order to get pre-approval, and you would at least find out where they are and get familiar with them because it’s important that anything you say on an application is accurate.

You may also have to provide information about the thing you’re buying. If it’s a house, is it a family residence, or is it a n apartment, townhouse or unit in a building with 50 units?

The more detail you…the better because your lender’s offer may change depending on what you want to buy.

Apply for the Loan: Once you’ve picked a lender and prepared yourself, it’s time to apply. There’s only one way to find out how much you can get so go ahead and fill out an application to wait for an answer.

An offer may come quickly, or it may take a while. Lenders do a quick once-over when you get preapproved, so you should have an answer within one day.

Be aware some lenders claim to preapprove you without really looking at your finances. If they don’t run your credit or ask about your income, it’s not a good sign.

You want a preapproval that actually means something, and lenders can only make a realistic offer if they know something about you. If you get a fake or not a genuine preapproval, you may later find out you can’t really borrow as much as you hoped.