Tips for starting your property portfolio 

Tips for starting your property portfolio 

Starting your own property portfolio may seem daunting, although with a few sage tips you can avoid unnecessary pitfalls and ensure success!  Be clear on your goals  Be clear on what you are trying to achieve from property investing. Be specific about the financial outcomes you looking to achieve from property investing, and in what time frame you want to achieve this in. Property is just a vehicle to get you to the financial position to give you the lifestyle you desire – ask yourself, “is it passive income, or a net equity position, or is it a combination, and when do you want to achieve this by?”  Be educated  We’re playing with large sums of money, and most often buying a property will be the biggest financial decision you will make in your lifetime. It still baffles me that some people spend more time researching a weekend getaway than they do buying a property. There are some great online platforms including Smart Property Investment, Australian-specific property investing books, podcasts, online forums, networking events, and free seminars.  It’s in the strategy  It’s important to understand what financial outcomes you are trying to achieve from investing in property because this will dictate the strategy you adopt, and how passive or active you need to be. It’s also important to assess your risk appetite dependent upon your situation. Some well-known strategies are buy and hold, renovation, flipping, development, and joint-venture to name a few. It might be a combination of these, however always be clear on what outcomes you are trying to achieve.  Build your team  Once you’ve created what you believe is...
Who you need when investing

Who you need when investing

Purchasing a property can often be a daunting and painstaking experience, particularly if it’s someone’s first investment property. Here is a guide to five key personnel that experienced investors often work with.  Mortgage broker  Brokers liaise with both borrowers and lenders, researching products on the market and assisting clientele with the application and loan settlement process. As many banks tighten lending standards based on risk assessment, investors often work with brokers to secure property funding through alternative lenders.  Buyer’s agent  A buyer’s agent works on a client’s behalf to search, evaluate and negotiate the purchase of a property. Many interstate or time-poor investors employ an agent to do the groundwork in finding a property and often have access to resources otherwise unattainable for investors.  Accountant  An investment accountant maintains a client’s investments while providing financial advice and monitoring their finances. Many investors work with accountants to determine what they can afford to purchase and how quickly they can expand their portfolio.  Solicitor  A solicitor in this space is a representative of, or negotiator for, clients regarding contractual agreements and transactions. Investors often work with solicitors for property settlement, ensuring the accuracy of contracts as well as ensuring relevant documentation has been received.  Real estate agent  Real estate agents are instrumental to investors looking to rent out their properties and will advertise the property, schedule viewings, liaise with potential tenants and arrange paperwork in preparation for rental agreements within a short time...
How to pay your mortgage off sooner 

How to pay your mortgage off sooner 

Paying off a mortgage as quickly as possible reaps many benefits. By leveraging some simple savings strategies you can reduce the term of the loan and the interest you’ll pay. Reduce overspending We all do it. Unplanned purchases and impulse buying can seriously affect your financial health. Just by simply preparing a budget shows how much can be saved with a little planning. Pay lump sums off your mortgage Instead of pocketing your tax return or work bonus, consider putting it directly against your mortgage. Every dollar over the repayment amount bites into your principal, which reduces the interest payable. Don’t be complacent about direct debits and insurances Every year, do a health check of your insurances, including car, home and health, and promptly cancel subscriptions, like a long forgotten gym membership. Don’t forget to check your current loan/mortgage rate. Banks are very competitive these days. Sell it rather than dump it With online selling now the norm, there’s no excuse for throwing out an old couch or TV. Take some photos, put it up for sale on online garage sale sites like Gumtree or eBay, and make a little bit of extra cash to throw onto your loan. Stamp out your debt Debt kills your financial momentum. While you may be paying 5 per cent interest on your home loan, you could be forking out up to 20 per cent on your credit card or car loan. Forget extra repayments on your low-interest mortgage until you’ve stamped out your high-interest...
How to buy property right 

How to buy property right 

Buying property has definitely got its upsides and its downsides. The skill lies in navigating these in your favour in order to make your property investing most profitable.  The most common words of wisdom heard from those that do well with their investments are; buy with your head, not your heart; and the profit is in the purchase.  This is where most investors and especially those new to property investing, go wrong. Most tend to treat buying an investment property just like buying their home, which translates to an emotional buy. This is where most go about it the wrong way too.  Commonly, we tend to look at agents’ windows, websites and the big property portals for suitable properties to find an investment. Yet, there are other ways to go about it if you want to buy with the added value of either having fast capital gain, scope for improvement, sub-division or even development potential.  Ultimately, when we want to buy any other product at the best price, we look at ways to buy from those that need to sell, how we can get it at a reduced price; buy it at wholesale or direct from the producer. Come to property, most investors look only at the retail end, which in most cases means that they are paying a premium price to begin with.  ‘The biggest profit is made at the point of purchase’, I have been told too many times from successful investors to ignore.  Just like a personal trainer at the gym, or a life coach for your career development, a property investment mentor are available to help you...
5 tips for investing 

5 tips for investing 

Many investors fail to get past their initial wish-list. Whether it be fear, timing, limited support or outright procrastination, lots of resolutions remain just that; a wish-list item which never eventuates. Here are some tips. Planning isn’t always easy, and it’s not all that simple either. Lots of thought needs to go into the why, the how and the when; and that’s before investors even get to the what.  A resolution needs to be clear, meaningful, results-driven and achievable if investors are  to have any chance at meeting their goals.  Here are some initial steps for those who are serious about property investing.   FINANCE Financial discipline is critical to the success of real estate investing. Get clarity on your borrowing power, ideal loan structuring and leveraged amount (i.e. the LVR – loan-to-value ratio). The funds you have on hand will help determine how much and when you can borrow. Without this critical step, there is little point planning anything else in the journey yet. Speak to a knowledgeable finance adviser with a proven track record for investment lending because loan setup is critical at the start.   MOTIVATION Ask yourself what your motivation to invest in property is based on. Quantify what it is you wish to achieve through property… is it a better financial future with less reliance on super/pension? Is it a specific passive income per annum? Could it be attaining your first home? Or is it about building wealth? Taking the focus off the number of properties or the value of your portfolio is imperative if an investor is serious about an outcome, not just a goal. The real question...
How to find properties with strong growth potential

How to find properties with strong growth potential

If your goal is to create lasting wealth it is essential to have assets with capital growth potential in your investment portfolio.  You need to buy with a goal of creating capital growth. Focusing on cash flow and a positive cash return is a short-term play. Without growth, you’re not going to be able to create lasting wealth for the long-term. You need to focus on the drivers of capital price appreciation.  Location – This is the main driver of capital growth. There are many things you can change about a property, including its layout, condition, colour scheme, even the number of bedrooms it offers. The one thing that you can never change is your property’s location. A quality location is important. It ensures long-term demand from a rental perspective, and ensures you have a robust buying market if you decide to sell.  Infrastructure – Infrastructure is a major consideration. Infrastructure means any kind of infrastructure – whether it be transport, industry or commerce – that will benefit local residents. This could be anything from a new train line or expanded freeway, to commercial construction that adds employment opportunities to the region.  Condition – When deciding which property to invest in, you can buy a brand new property or an established property. You may decide to renovate to add value and build equity, or you could buy a new property to access the depreciation and tax benefits. Either strategy can offer price appreciation potential.   Balance – Try and strike a balance between yield and capital growth. Make your wealth creation strategy as passive as possible. This leans towards buying new properties that are low maintenance...