Beware of Fake Property Market News 

Beware of Fake Property Market News 

Ah, the Internet. Don’t you just love it? Overflowing with so, so much information! And plenty of it is dedicated to property. So what is real and what is fake?  The Dilemma  It’s information overload, and all anyone needs to add to it is a computer and a connection. That’s right, you don’t need qualifications or actual knowledge – anyone can write anything about anything and put it up on the internet as ‘research’. Isn’t freedom of speech wonderful?!  Beware though – and this is stating the obvious – much of information is questionable quality. Digest what you read with a grain of salt, or suffer the consequences of monetary heartburn.  If the reader doesn’t have sufficient background knowledge on the topic that they are reading about they won’t have the ability to interpret good information from bad or well-informed opinions from gross generalisations.  Why is it suspect?  With media companies continually making cutbacks to stay afloat in this digital age, journalists are under increasing pressure to reach daily ‘click-count’ quotas through producing higher content volumes; quality becomes a secondary consideration.  Much of what gets published on the internet about property markets is backward-looking, is heavily focused on only a few Australian cities, and can be influenced by vested interests.  There’s a lot of mass-produced generalisations which fill people’s devices these days. In some ways, it’s suppressing people’s intelligence. People consume content, they fail to ask themselves ‘why’ others have a specific point of view, and just adopt the consensus as gospel.  What to look for?  An example was the abundance of property news stories in 2014 and 2015 with every Tom, Dick...
Why you should ignore the property headline ‘noise’ 

Why you should ignore the property headline ‘noise’ 

Guy Williams have spent over 20 years in a remarkable investment journey and has since maintained a 37-strong property portfolio. Aside from good education and correct strategy, he attributes his success to his ability to “ignore the noise”.  WHAT NOISE?  Guy told Smart Property Investment: “I just kept doing it and ignored the noise. I ignored the noise. I had a buy and hold strategy, but while I was doing that last year, people were saying, ‘Are they going to remove negative gearing?’ That’s a little bit of noise.   But over a 20, 30, 40-year time frame, it doesn’t really matter. I’ve seen huge interest rates, I’ve seen low interest rates. You see all these things happen, but over that length of time it doesn’t really matter. I think the noise gets in the way of people doing things.”  WHY?  While it is important to keep yourself up-to-date regarding movements in the property markets, it is equally vital to know which headlines are not worth mulling over, according to Guy.  You read a newspaper, they’re looking for headlines, they’re looking for stories so they want something like, ‘Interest rates are about to shoot up!’ or ‘They’re going to go ballistic in 2017’. So you’re going to think, ‘I’d better not invest. I’ve missed the boat’. Or maybe there’s a price bubble and so property prices are going to crash, so you say, ‘Oh, thankfully I’m not in it’. There’s all this noise and it comes out on a daily, weekly, monthly … It’s mainly just ignoring that,” he said.  WHAT TO DO?  Instead of worrying himself over “doom and gloom” headlines, Guy...
Habits of investors who have grown massive portfolios 

Habits of investors who have grown massive portfolios 

The habits that differentiate these investors with massive portfolios from those who have only succeeded in purchasing and maintaining a couple of investment properties are:  Understand the fundamentals Successful investors, first and foremost, familiarise themselves with the most basic fundamentals of investing in properties. It comes down to your ability to hold the property, which comes down to cash flow.  Asset selection should be an important part of the process for property investors looking to succeed in the business of wealth-creation. You can have one property that takes all your negative cash flow or you can have 10 properties that takes that same amount of negative cash flow—it is one of the fundamentals. That is a leveraging get off smart cash flow management.    Balance cash flow and yield Some of the factors involved in maintaining the portfolio’s cash flow of successful investors are rents and rental yields. Striking a good balance between the two is one of the most important secrets to success in the business of creating wealth through real estate assets.  The bigger investors understand how much negative cash flow they can afford on a month-to-month basis, and they balance that.    They use a ‘strategic point of view’ Since getting finance has become harder, smart investors always make it a point to ‘strategise’ in order to maintain good serviceability and borrowing capacity.  They’ll take on strategies like ‘Where in my portfolio can I add a granny flat that’s going to increase my cash flow and increase my serviceability?’ They’ll look at it from a strategic point of view. They think  differently around things so you can look...
What matters when buying your first home 

What matters when buying your first home 

First home buyers have significantly reprioritised what matters most when searching for their ideal home, according to the Westpac’s Home Ownership Report.  The research, commissioned by Westpac surveyed over 1,000 Australian home owners and first home buyers, and features trend data from the past two years.  The latest report demonstrates that first home buyers are less focused on buying a home in an area that is trendy or close to work, with both significantly decreasing in the ranking of “essential features” by 83 percent and 48 percent respectively.  A quiet neighbourhood, access to public transport, and safety are features that have also become less important during the decision-making process, with each decreasing by 37 percent, 21 percent and 9 percent respectively.  Andy Wright, Head of Home Ownership for Westpac Group, said in the face of housing affordability challenges and rising household costs, the research suggests first home buyers are becoming increasingly flexible and willing to shift their priorities in order to achieve their ultimate goal.  “These attitudinal shifts among first-home buyers towards home ownership suggest we may see more looking to buy in areas that they hadn’t considered, with many previously thought ‘essential’ features now just ‘nice-to-have’,” Wright said.  “In fact, the market saw home loans to first home buyers recently rise to a four year high, which suggests we may be already seeing the positive results of these shifts, combined with government incentives in New South Wales and Victoria.”  First home buyers are turning their attention to the inside of a home instead, as modern bathrooms and kitchens become more essential, increasing in priority by 25% and 10% respectively.  Nearly...
Things you don’t need to make a property investment

Things you don’t need to make a property investment

There is no shortage of commentary within the market on what property investors need to start their investment property portfolio. However, what are the things you don’t need to get started now?    First up, a credit card  Don’t believe the hype, credit cards don’t help your credit rating. In fact they are more than likely going to inhibit your ability to borrow rather than help.  Always focus on getting your mortgage approval before you attain or up your limit on your credit card to maximise your borrowing capacity.  ‘So, if you have a $5,000 limit, for example, this will reduce your borrowing capacity when being assessed by the banks. Therefore, where possible, reduce your credit card limits or cancel unused credit cards.’    You don’t need experience  Let’s look at the facts, every investor started somewhere. Just because you haven’t bought a property before doesn’t mean that should stop you from starting now. The only way to get the experience is by doing it.  It can be a daunting step, however, surrounding yourself early with industry experts including in investment property focused mortgage broker, accountant and buyer’s agent can help you build up the knowledge and confidence to buy the correct property the first time around.    Be an expert  You don’t need to know everything. Use your team for what they are good for. Years of experience and expertise. This can fast track your outcomes rather than making a lifelong mistake when buying your first property.  Build a team of industry experts including in investment property focused mortgage broker, accountant and buyer’s agent to ensure that your first purchase...
Why property investors must pay attention to ‘mini CBDs’ 

Why property investors must pay attention to ‘mini CBDs’ 

Contrary to the belief that the best areas to purchase properties in are capital cities and central business districts, many investors are now looking into smaller CBDs as the next hotspot for property investment.   Sydney and Melbourne are considered gateways of Australia’s expanding population, but migrants are not the biggest factor to consider when scouting for a location.   Here The Demographics Group’s Bernard Salt, offers some opinion on smaller CBD’s. Although migrants are “fuel into the greater furnace”, there is a more important question to be addressed: “How will this area look like with five million people? How about with eight million and so on?”   He explained: “At five million, you’ve got Sydney CBD and the inner suburbs … There’s been growth around Chatswood at a business hub, around Ryde and Epping … [and] Parramatta.”   “By 2050 there will be hubs, I think, particularly around Parramatta … and Blacktown [and] Badgerys Creek … Genuine satellite cities. “ “Sydney at eight million people cannot continue to have people living on the edge, getting on the train in the morning, and commuting into the city centre. What will happen is that the city centre jobs will start to be replicated in stronger, suburban, regional centres,” the social commentator added.  Bernard gets into details about how people create “mini CBDs” within a metropolitan area, and what this could mean for property investors all over the country:    How will you compare Sydney to other capital cities in the world?  Bernard: Los Angeles doesn’t really have a single CBD the way [that] Sydney does. There’s something in the CBD, but there’s also at Anaheim, also in Orange County, also at Irvine, also in the San Fernando Valley.  When you get to cities that...