To infinity…and beyond!
Hi Guys, it’s Jason Mudford from OBrien Real Estate with another edition of the.
Property News for 2020 where real estate information is on the house. Residential Property Investment has been waning for the last 24 months ever since the Royal Commission. In fact, in 2019 investors recorded the lowest participation rate in 25 years. It was the first home buyers that were incentivised in the market and they accounted for 37% of purchases in the market with investors participation less than 25%.
The RBA last week not only cut the rate but they wound back of the some of the responsible lending criteria and announced $100 billion in quantitative easing. Since the stimulus announced by the RBA, we have seen strong results, particularly at auctions over the weekend with an 80% clearance rate. As a result, there will be renewed activity from investors being lured back into the market in by the potential of bigger capital gains and the low-interest rates.
If you’re considering a purchase here are our Top 5 tips for property investors:
Tip Number 1 – Buy Investment grade property.
Buy with your head, not your heart. Buying a property close to transport, universities and schools will make it more attractive to renters. Look for liveability not luxury, but ensure the home and location has owner-occupier appeal as well.
Tip Number 2 – Know your numbers.
Know your budget, have a thorough understanding of your cash flow and don’t underestimate the ongoing costs. Make sure you budget enough for rates, insurance and general repairs. Negative gearing helps with tax offsets but ensure you balance it with cashflow out.
Tip Number 3 – Play the long game.
Buy for the long term, be realistic about your investment goals, a quick 2 to 3-year flip doesn’t always work. Build what we call sweat equity, be prepared to add value by rolling up your sleeves. Property investing is a participation sport.
Tip Number 4 – Get the right loan structure and insurance.
There are many incentives loan providers will throw at you to win your business which is great and there are many different loan features available to you some you don’t need to pay for. Rent cover insurance is imperative, ensure you are properly protected for rent loss and damages.
Tip Number 5 – Find a good property manager.
Finding the right renter makes all the difference and finding the right property manager will ensure you achieve this. Renting your investment property to a quality renter who pays on time and looks after the property as if it was their own home is vitality important for a successful property investment journey.
That’s all for this week, I’m Jason Mudford and remember the information provided is of a general nature you should always seek independent legal, financial, taxation or other advice in relation to your unique circumstances.