The increased rise of real estate prices make property investment attractive when you’re looking for a safe way to earn money outside of your day job. The only problem is, there is so much information out there, investment property advice overload!
Investor’s are considered by most to be wise because they’re thinking about tomorrow. They have a need to build security for themselves or people around them. They also have one big insecurity, it’s around making the wrong move which results in a poor return on their money. Hence why they reach out to different types of property advisors for advice.
We will give you some hot tips on who to hire to add value to your investment property journey.
Some real estate advisors have over-the-top complex strategies that are supposed to improve your chances of making money. They deliberately make it hard for normal people to understand.
The problem with these guys is they can advise you on property that is loaded on price, have unsustainable levels of cash flow or long-term leases. Advisors also have bad habits of selling products and insurances that are not necessary.
The Truth About Property Investment
Property investment advice is a broad topic that can cover many different areas. But let’s take a step back and look at it simply- it works like any free market, it balances on supply and demand. More buyers- prices go up. Less buyers- prices go down.
If you want a better return on your money buy a better house in a better area, not a dime a dozen property. When you sell, you will find many buyers will compete for your property. Sounds simple enough, doesn’t it? It really is.
There are some rules investors should follow when buying an investment property, things like:
- buy property in a thriving city
- buy around natural amenities like a beach or park land
- be close to major infrastructure and the CBD
- buy the type of property that has a history of growth
History has proven, even if you overpay for a good property today, in a couple of decades the money you spent will seam minuscule.
The Complex Stuff Of Investing
When you’re ready to buy and you’re in need of help, choose an advisor that’s qualified to comment on a State’s economic outlook. Having this high level overview will give you long-term benefits to having a property that looks after itself through life’s ups and downs.
It’s wise to target a state that shows economic stability. Stability around jobs, investment from government and the business sector. A flow-on effect of a strong local economy is consistent population growth. A state that has population growth is a state that needs to house its population.
Time You Run
Maximising your return on investment has a lot to do with choosing the right time to enter and leave the property market. Hold off until the real estate market has completed it’s boom and bust cycle, there is no hurry to buy property, it’s more about timing your run right. Buying when the market is flat or starting to rise is a perfect time to make money out of investing.
Holding real estate when property prices are declining can be a painful experience especially if you need to sell.
When Not To Buy Property
In Australia, government’s change frequently. Each one brings a verbal promise of a better outlook, yet their political bickering potentially destabilises the whole economy. Take for instance the 2019 election, one major party is considering abolishing negative gearing in the attempt to make house prices fairer for all Australians.
This type of change in policy could have major implications on property prices around Australia. The truth is, no one knows what effect these very high risk policies will have on our economy.
So, when a storm is approaching a diligent sailor will batten down the hatches. Likewise, a property buyer should hold off until after an election year is over.
In 2008 there was a global economic crisis that was set off by loose bank lending practices in America. This disrupted the world’s economies spreading fear of economic ruin. In Australia, the flow on effect made property prices decline approximately 10% to 15%.
These types of downward GDP declines typically come after a war, a stock market crash, poor economic management of a major economy or a major natural disaster.
Who You Need To Hire When Buying Property?
Mortgage brokers are a great place to start. A broker will help get a written home loan pre approval in place, this will lay out the foundations of your investment property journey. In addition, mortgage brokers are masters of filling out paperwork to get a loan across the line with the bank.
Mortgage brokers have access to hundreds of home loan products from different banks around Australia. If you’re having difficulty with financing with the major four banks, a broker could be the best way to improve your chances of getting an investment loan approved.
A great person on your side is a buyer’s agent. They are experienced real estate agents that have worked with hundreds of investors, learning the street smarts of residential property. They understand where and why to buy and what makes a rental property attractive to tenants and future real estate buyers.
Another advantage is the potential to save a lot of money. Real estate agents are professional negotiators that can swindle tens of thousands from the unsuspecting buyers. A buyer’s advocate has the experience to bring balance to a negotiating table.
Building and pest inspectors might seem like an unnecessary expense when you are buying, but to avoid large financial loss they offer great peace of mind to the property buyer. They can estimate the fixtures and fittings that need immediate repair and also long term maintenance plans as well.
A building inspectors report can also act as a great negotiating tool if damages are discovered.
Once you have purchased, property managers can be great advisors on attracting good quality tenants that will look after your investment. This can save you money on renovations in the long run and keep your property’s cash flow healthy.
- Use advisors that understand a local economy.
- Don’t use advisors that sell products, investment schemes and make property investing difficult.
- Buyers agents offer great street smarts when buying property.
- Crunch the numbers twice.
- Use a mortgage broker and get a written pre-approval.
- Don’t get emotionally attached to any property.
- Leverage tax perks that exist for investors.
- There is no hurry to buy property, surf property cycles for best results.
When it comes to advice the best people on your side are people that practice what they preach. Investing in property isn’t complex, but there are some simple rules one must follow to succeed. During the process, experienced hands can create a better return on your investment.
If you’re an investor looking at buying an investment property, Wise Real Estate Advice specialises in taking the time to make sure we help you purchase the right property for your needs.
For a free consultation on how we can help, leave your details on our contact form.