Tag Archives: property investment

Finding Hidden Profits In Houses vs Apartments

Are You Wanting Ridiculous Results From Your Assets In Context To Houses Or Apartments Which Is A Better Investment?

The short answer, it all depends on growth and performance with strategy for location and/or specific area.

Perhaps you don’t really know a lot about buying a home or investing in property. Are you always a little fearful of being tied to a mortgage?

Please note you must always do extensive research to ensure each property is either or a combination of the following elements:

  • Cash flow positive
  • High profit margins
  • High cash on cash ROI
  • High rental yield

And for this reason, houses and apartments are great investments…

houses vs apartments investment
Houses or apartments are golden investment opportunities…

There are specific streets, locations within cities and suburbs where houses outperforms.

It’s the same answer for apartments, it’s whether this type of asset outstrips performance of houses?

Why?

Because performance of any property type means it’s growth is determined by factors, location, growth rates and strongest demand.

What causes one to perform better than the other?

Is it the infrastructure in place which supports demographic mix and population growth rates?

Growth causes demand for specific style of property, right?

The demographics in every suburb or city identifies  whether there’s stronger demand for houses…

Or stronger demand for Apartments.

Step 1,  identify hidden opportunity in context to demand and how different property assets are performing.

median growth rates
Trend lines and data for median growth rates…

Data from Real Estate Institute of Australia shows the difference in price growth in houses and apartments from 1997 to 2009.

Can you see how the graph trends over a 13 year period with growth rates between houses and apartments are almost the same.

The median apartment price increased from $153,200 to $373,300
or 143.93%.

And over the same period houses grew from $183,100 to $458,100,
or 150.24%.

As you can see similar growth for both property types, how do you know what type of property you would invest in?

Property and suburb, one of the most influential drivers for demand
is demographics of specific area.

Demand causes one property type to grow faster than another.

See chart below from Australian Bureau of Statistics…

australian household size
Do trend lines, data, median growth rates support Australian household size…

See the number of people per dwelling in 1911 shows 4.5 people.

By 2011 on average the figure is less than 2.5 people per household.

2014 even more people are choosing to live in smaller sized dwellings
with fewer people per household.

An interesting growth expectation for 2026 (forecast by Australian Bureau of Statistics)….

The data suggests demand for new property by couples without children and single person dwellers.

Population growth requires almost double the number of dwellings today to accommodate the same amount of people.

In 2001, 1.8 million people lived on their own. According to ABS, this figure is expected to increase by between 57% and 105% by 2026.

*RPData, many new apartment developments are also being built in strategic locations, where a large proportion of market aspires to live.

The kicker for savvy property investors, can you see if marketplace can afford to buy a detached home?

Can you see good examples of these factors in your area?

Can you identify where apartment prices in the suburb are more affordable than a house?

Over a 12 months trend line have apartment values increased by 10% or more compared to growth of houses?

rpdata
Check out migration stats from rpdata…

If you analyze the data from month to month basis, does the annual value growth for apartments outperform that of houses?

The key here is consistently…

If you do research you’ll see individual capital city markets perform differently.

The growth cycles and trends for apartments has most likely in your area outperformed houses over the last 12 months.

What’s the differential between median house prices and apartment prices?

If analysed, you’ll see deeper insights into performance of the market.

capital city median apartment prices
Capital city median apartment prices

Capital city differential between median apartment and house prices

median apartment and house prices
Check out the median apartment and house prices…

Understanding data in context to population growth statistics, demographic shifts and property value trends.

It is crucial for the type of strategy and what type of property
to purchase, right?

Houses or apartments?

Do you need to know what’s the demographic demand for houses or apartments in any specific area, suburb or region?

You make a decision based on sound research.

Looking only at demographics is an important, you also want to understand affordability factor and returns on investment (ROI).

Which type of property is best?

As well as population growth and infrastructure investment planned?

Do all these trends work with variables to influence your investment property performance and houses vs apartments investments?

houses vs apartments investment
Are You Wanting Ridiculous Results From Your Assets In Context To Houses Or Apartments Which Is A Better Investment?

Houses vs Apartments

Property Investing – How To Avoid Devastating Costly Mistakes

Does property investing revolve around buying property or selling  property?

Sometimes a problem can feel too great to overcome which threaten to hold-up or kill a deal. As property investors, $10,000 as a property investment maybe a small mistake in context to total costs involved in buying or selling property with a price-tag of $500K plus.

There’s a way to avoid losing money in your property investing transactions and key is to educate yourself first.

Real estate is by no means risk-free property investing, because so many people ignore basics which ends up being a problem.

Want to avoid the most costly and devastating pitfalls property investors would want to avoid at all costs:

Only fools rush in: A buy-at-all-costs mindset is one of the biggest mistakes a property investor can make.

Not only does it allow emotion to have a free rein, a buyer could be counting the costs for years to come by paying too much.

Property investment should be a calculated decision that combines extensive research, quality advice and a proven product in a popular area where demand exceeds supply.

Not being informed because information is power:  2008 Australian Securities and Investment Corporation report about investors found that only 7% of investors surveyed could correctly state the official interest rate. And that’s only the beginning.

Half of the investors surveyed use media (internet, magazines, newspapers, TV and radio) to identify opportunities. Just 36% of investors follow this up by consulting a professional.

At its simplest, property investment is purely about numbers, not about a cool address for holidays. Yet correct advice is paramount to ensuring numbers work now and long term.

Going it alone: Leading the top three recommendations made by experienced investors in the ASIC report was the advice to deal with reputable, well-known companies (18%).

An equivalent percentage of investors recommended that you do lots of research, and 17% warned that you check what you are investing in.

Interestingly, only 47% of investors had a long-term financial goal or plan, and almost half had only one type of investment. Most felt they were not serious property investors and were saving for their future and/or retirement.

Be guided by experience and a proven formula for results and you can be the winner.

Delaying your decision: There’s no such thing as a good or bad time to buy an investment property, and especially when you’re young.

It should be clear once you have studied the fundamentals and conducted due diligence that it’s only a matter of the figures adding up for you, with a contingency fund factored into the equation.

Not relying o capital growth, the results can be immediate as the average Australian can save between $8000 and $10,0000 on tax every year.

Buying in the wrong areas: The holiday home syndrome is perhaps the most common lapse in judgement.

It’s easy to get carried away with the good life when you’re far from the 9 to 5 lifestyle, but a quick analysis of the usually volatile rise and falls of the local market can soon turn your notion of paradise into a sobering reality.

The Gold Coast property market is a prime example…

Riding high in 2008, the collapse of the global economy has resulted in apartment prices falling up to 40%, with the market only now emerging cautiously from the pain. Look for consistency in price growth, growth prospects and demand.

Likewise, cashing in on a boom area is also likely to end in less-than-favourable results. Unless the reason for the boom, such as a mining project, is deemed to be generational, any short-term gains are sure to be followed by long-term market stagnation.

Borrowing too much only a small fraction of property investors can afford to spend more than $500,000 on an investment, which is why it is recommended to start small.

A recommended option is buying a new house between $300,000 and $450,000 in an area where demand outstrips supply.

What’s the risk of being lumbered with other people’s problems in established homes?

Off-the-plan come with the bonus of stamp duty savings, depreciation benefits and the peace of mind of builder’s warranties.

The biggest bonus is these properties can be positively geared from a loan perspective, allowing the investor a strategy of requiring little or no ongoing payments.

Again, consult a financial adviser and set up a brighter future. Just remember, from little things, big things grow.

No strategic plan: The ASIC report found 65% of investors aged 18-24, 48% of those aged 25-34 and 45% of young couples were unlikely to have a financial plan or long-term goal.

It found the most common triggers to make an investment decision were divorce, inheritance, redundancy and retirement.

Being pro-active can only enhance your long-term prospects.

Creating certainty by meeting a financial planner and putting in place an achievable plan can bring structure to your life.

Being prepared for a pension-free future means you start focusing on the joys of living instead of what you’re missing out on.

Get rich quick: Property is a proven method of providing a sustainable future. But like any investment, the higher the return offered, the higher the risk.

Property is a long-term investment strategy that should be employed for at least 10 years. Anything shorter and it’s unlikely to work as well as it should. The proof is in the pudding.

Since 1900 there has only been 13 years of negative growth in Australian property. This includes the Great Depression, World War I and II, the 1990s “recession we had to have”, and the Global Financial Crisis.

If You’re a New or Savvy Property Investor In Need Of Fresh Ideas and Proven Strategies…This Is For You!

Everyone talks about investing, where to invest, where not to invest, the Warren Buffet secrets to invest, etc. Not everyone talks about under-investing and that can hold you and your investing back even more than bad or risky investments.

Let me be the one to shine light on this phenomenon. Why wouldn’t you get guidance from a proactive property investor who has walked in your footsteps?

The short answer is talk to a property mentor with industry specific skills and experience.

You want to always make sure you get at least 95% probability or greater results because you get more focused and get better results.

Start with a property mentor who helps you handle advanced areas of your investing and your profits breakthrough to the next level at a speed you never thought possible…

Property Investing

Property Finance – What’s Stopping YOU?

Is Property Finance a Problem for You?

Property investment is all about the numbers stacking up. Property financing an investment property is not always straightforward. The reality is lack of money should never stop you because a good property deal finds finance…

When it comes to real estate investing there sure is a lot to learn.  Real estate is not only about the market or strategy…it’s more about the deal, which means property finance.

Each and every property you are going to see must be the very best deal in context to your investment goals and profit margins, which means you have to do your homework. Due diligence makes your life easier, mitigates risks and property investments profitable…

How to effectively finance your property investments…

Getting the most effective finance for your investment properties is absolutely critical to building wealth through property. As a property investor,  you can spend a lot of hours researching the many different finance options available through many different lenders.

The result can provide you with the knowledge on how to structure your investments and lending criteria which enables continued growth of your property investments portfolio.

Understanding each lenders assessment criteria is extremely valuable in selecting the right lender each time you make a purchase.

It may surprise you just how different each lender assesses the scenario you present them. If it is outside their preferred lending guidelines, they may not be able to assist you with finance.

So you understand how to source property finance for yourself, right? If not you’ll want to make a big effort to educate yourself on the options available to know various strategies so an educated decision on the right finance solution can be made.

Do you need an assessment?

If you would like a review of your current finance setup or require finance for future purchases, we can provide you with an honest assessment on what you have in place now and make recommendations based on your objectives.

Property finance is the foundation which every property investor does and should know.

property finance
Property finance includes using effective property strategies for profits…

Property financing must be set-up right because it makes every deal possible with or without a deposit (unless a major industry change happens).

Do you understand the most effective multidisciplinary nature of property investment and property development including:

  • Property investment analysis
  • Property portfolio analysis
  • Property finance and taxation
  • Feasibility studies
  • Property strategies for profits

Do you know how to develop the analytical and decision making skills necessary for property investment and property development as a property investor?

1. What is your single biggest obstacle which is stopping you from profiting from property investments?

  • Lack of finance
  • Not enough time
  • Lack of education to raise finance from private investors (your network)
  • Lack of education
  • Unable to find deals in your area

2. What one additional skill would enable you to make more money from property investing?

  • Raising finance from the people you know (your network)
  • Knowledge so you can use one deposit to buy multiple properties
  • Knowledge to maximise your return on investment
  • Knowledge so you can invest in property renovations
  • Sourcing below market value deals

3. What property goals have you set yourself for 2014?

  • Buying your first investment property
  • Buying 5 investment properties in a year
  • Buying 10 investment properties in a year
  • Sacking your boss and being a full time property investor

4. How can we better help you learn skills you need to make money from property investment?

  • More online trainings
  • More books or reports
  • More CD sets
  • More events

Loan Analysis

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Property selection criteria…have you ever found yourself working harder and harder only to go backwards?

The principles for selecting investments properties include:

  • Property must be in an area of existing or potential high mid-to-long term capital growth
  • Property must be in an area of high population growth and high employment
  • Property must be close to schools, shops and transport etc
  • Property should be new or renovated to allow maximum depreciation and therefore biggest taxation savings
  • Property must be high quality in terms of design, materials and construction
  • Property requires minimal maintenance
  • Property must be in an area, which has a sound long term rental history

Check list with must ask questions for every property investor – how to of find an area to invest in and understanding specifics of individual property:

  1. What is the cashflow of the property?
  2. What is the vacancy rate of the area?
  3. What improvements are being planned for the area?
  4. What is the population growth?
  5. What is the competition?
  6. Is the property tenant friendly?
  7. What structural condition is the property in?
  8. Does property have furniture?
  9. Is there a body corporate?
  10. Is there a rental guarantee?
  11. What is the current property management arrangement?.
  12. Is there a leaseback?
  13. In the case of a new or off the plan property, who are the developers? This particularly in relation to companies like the ones you’re looking at
  14. Is there a dual purpose if this is a niche market ( purpose built ) property?
  15. What is the land availability in the area?
  16. What is the proximity of the area to a large city?
  17. What is the age of the property?
  18. Is the property at market value or under market value?
  19. Is the town you are considering based on just one industry?
  20. 20. Are you being commercial in your approach?

Want a clear and concise approach to creating profits, cash flow and equity through property investment?

Want a detailed roadmap with a step-by-step guide to property finance, buying property with no money down, instant equity and much more?

Want property investment financing solutions and strategies that work?

Property Finance