7 New Years Resolutions for your Investment Property


With 2019 fast approaching now is the time to be thinking of the goals you’d like to achieve for the management of your investment property, to ensure that your investment will continue to provide a sustainable, consistent and trouble free income for years to come.

An investment property requires advanced planning and follow through. Creating a list of New Year’s resolutions before the start of the new year can ensure that you have confidence, a systemised approach and the right mindset to grow your asset.

Here is a checklist for you to get started when preparing for a successful 2019.

1. Insurance

Landlord insurance is your investment property safety net. You should be asking yourself ‘Do I have the appropriate cover?’ and ‘Am I making the most out of what I pay for?’. There are also different types of cover depending on whether you have an agent or manage the property yourself. Take the time to review what you have. For more on Landlord Insurance see our previous blog ‘Landlord Insurance- Manage Your Risk’.

2. Smoke Alarms

As a landlord you are legally required to have met the obligations for the installation and maintenance of smoke alarms in your property. Many smoke alarm companies will offer unlimited servicing programs to provide peace of mind knowing your tenants and property are protected. Make sure all your bases are covered. New reforms to the tenancies act coming next year will mean you, as the landlord, will be fully responsible to make sure smoke alarms are operational.

3. Mortgage review

Keep your investment tailored to your budget and working in your best interests by regularly reviewing your home loan. If you haven’t reviewed your current interest rate in the last few years, you may be paying too much interest. It’s easy to let the finer details of your mortgage fall by the wayside but by keeping an eye on the market you may just come across a great deal. Sign up to a comparison website or ask a mortgage broker for advice.

4. Rent review

The new reforms to legislation will mean rent increases may only be implemented once in a twelve month period. Schedule your rent review date a few months in advance to coincide with a routine inspection. At Property Quarters we conduct regular rent reviews and keep an eye on market changes to ensure your property is keeping pace. See our blog ‘Rent Reviews- 5 points to Consider’.

5. Property Maintenance

One of the most nagging of New Year’s Resolutions, but just as equally important, is appraising your property for repairs and updating. Unexpected repairs can happen at any time, don’t be caught out unprepared. Create a plan and put aside funds. Most repairs and maintenance are tax deductible, check out our ‘Landlord Resource Centre’ on our website for a quick overview of investment depreciation.

6. It’s not who you know it’s what you know!

Knowledge is power so make it a priority to become as shrewd as possible in property investment. Your carefully planned nest egg is critical to your future. It can make a real difference between struggling to make ends meet and the joy of a secure retirement- so make your investment work to its absolute potential! You can do this by brushing up on your knowledge. Our website ‘www.propertyquarters.com.au’ is packed with free information to get your landlord mindset on the right track.

7. Review of your managing agent

“Choosing a Property Manager is possibly the most important part of owning an investment property. You are relying on a professional to guide you towards financial independence; make sure you are in the right hands.”–George Astudillo.

Your managing agent should be in regular contact with you, efficient with planning, have extensive market and industry knowledge and above all they need to look after your best interests at all times. If you have any doubts about how your property is being looked after it might be time to make a change.

About Us

George Astudillo is the founder of Property Quarters, an agency that values communication and great relationships with its landlords.

George now has more than 30 years in real estate, including 15 years as the owner of a national real estate franchise. He’s also an accredited auctioneer and is the author of “The Landlord Mindset”, a book with his best tips to help landlords look after their investments. His book has been quoted in the SMH, The Huffington Post and The Age.

As the founder of Property Quarters, George takes great care in looking after his landlord’s investments. Having seen it all and worked with may landlords and tenants, he’s a strong mediator and negotiator and knows how to navigate through property legislation.

George is trusted by his landlords to advise on the financial management of their investments. He’s put in place proven processes to ensure each property he looks after is managed effectively to retain its value, quality tenants and rental income.

If you’re looking for a property manager who thinks like a landlord and whose business is built on tested processes, contact us by clicking HERE.

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Copyright © 2016, www.propertyquarters.com.au

7 Ways to Add Value to Your Investment Property


In Sydney’s current rental market the competition for tenants is heating up!

According to the Domain’s latest quarterly rental report, residential rental prices in some parts of Sydney have fallen by almost 10 percent in the last year. This is creating a unique opportunity for quality tenants to shop around. Here’s how to beat the competition and minimise your property’s vacancy time by keeping your investment property at the top of their shopping list.

A fantastic tenant is the most valuable addition you can have for your property, and here are 7 cost effective ways to beat the competition, and add more value to your investment:

1. First Impressions

If your investment is a house then first impressions start on the street. Improve your street appeal by keeping the front façade clean and free of clutter. Gardens need to be manicured and pavements clean. Fences should be in good order and maintained with a new coat of paint if necessary. In the case of an apartment the entrance will be what new tenants judge first. Doors, screens and light fittings should all be in good working order, clean and without any signs of damage. Be sure to make regular contact with your managing strata agency in order to ensure common areas are maintained to a high standard.

2. Bathrooms Renovations

Small alterations to your bathroom and kitchen can make a huge difference to the style and feel of the property. You don’t have to do major works to successfully update these rooms either. Re-grouting tiles, replacing fixtures such as taps, spouts, towel rails and toilet seats will make an impact. When choosing new fixtures chrome is time proven to look the cleanest and most effective. Modern light fittings with clear white lights will contribute to a cleaner ‘new’ feel as well.

3. Heating and Cooling

If your property has a tendency to be either too hot or too cold during the year, you could run the risk of losing a great tenant and have a constant run of short term renters. Unbearable summer heat or energy consuming heaters can be deal breakers. Consider offering solutions such as split cycle air conditioning, ceiling fans, block out blinds or window insulation. Ceiling insulation can reduce energy consumption by up to 45% and assist with large gaps or drafts. Suitable heating and cooling is a real drawcard that will undoubtedly increase value.

4. Flooring

The choice of flooring can make a big impact on the look and feel of a property. Whether you have carpet, timber or tiles; good quality flooring and in great condition is an absolute must. Carpet does not last forever in fact most have a lifespan of 7-15 years. Don’t wait for your carpet to become shabby before replacing or it might become the seed for your tenant to relocate. Timber flooring will need attention occasionally to look buffed and polished as dull floorboards covered in scratches or marks gives a neglected feel and will take value from the entire room/property.

5. Window Finishes

Clean, spotless windows create a great impression of a neat, tidy and well maintained property. Consider window finishes if there is a need for privacy or shade. The right blinds will control the light, provide privacy, increase insulation and make a visual impact. Ensure each window has the appropriate security in place and consider well fitted flyscreens on some windows.

6. Garden and Outdoor Areas

Every home with an outdoor area can be sculpted into an open air extension of the home. For new lawns the use of buffalo grass is recommended for its weed resistance and slow growing properties. Think attractive and low maintenance as a rule of thumb for outdoor garden areas. Whether it be a large backyard, small courtyard or balcony, a simple design will keep these areas looking neat and tidy for longer making it easy for a tenant to look after. A superb tenant may not always have a green thumb!

7. Security

According to statistics break-ins occur every 3 minutes in Australia. Basic security measures are vital to your household and property. To know more about what security and safety issues are essential, check out the Fair Trading website here.

Using some of the tips above will help you to attract a great tenant, fast, and it will create value for your property. Of course there are many other factors that will influence time on market, such as your asking price, so feel free to read our blog ‘Setting an Asking Price, The First Step in Marketing’.

Send us an email and we will send you a copy of the book “The Landlord Mindset: 7 Keys to Buying and Managing Residential Investment Property”

Rent Reviews- 5 Points to Consider


A rent review is essential to check whether it’s time to increase the rent or leave it alone.

I’m going to stick my neck out here and state that most people hate losing money. You know, you buy a big-ticket item and then a couple of days later find that you could have bought it elsewhere for substantially less money. Ouch.

In real estate investing, there are many ways to lose money and they all hurt. But I’ve noticed there is one way to lose money that investors don’t even notice – Rent Increases. Many owners (and their agents) don’t have a schedule and procedure to review the rent. This means that money is being lost and you don’t even know about it until it’s too late.

For a lease to be eligible for a rent increase it MUST NOT be in a fixed term. Tenants that have signed a 6 month or 12 month lease are exempt from rent increases until the fixed term of the lease expires and becomes a periodic lease (or continuing agreement).

So how do you check if it’s time for a rent review?

There are 5 key points to consider,

1. Timing

Outside of a fixed term lease of less than 2 years, NSW legislation says you can make increases as frequently as you like. It is recommended to conduct a ‘Rent Review’ annually at the same time you are performing a routine inspection. This will keep you in tune to the movements of the rental market and your tenants will be conditioned to small increases over time.

If your tenants are on a fixed term, a good time would be 70 days before the fixed term ends. If your tenant is worth keeping, offering a new lease term may be a good idea.

2.Size

Smaller increases are preferable over larger jumps. A high sudden increase will feel like a shock and may spur the tenant to consider moving or apply to the tribunal for a review.

3. Rental Market- Comparable Rentals

To conduct the review, we simply look at how many similar properties are currently available and what is the asking rental, and what similar have properties recently been leased for. Knowing what’s happening in the area is critical, you don’t want to lose the tenant for a few dollars and then find the property is vacant for weeks.

Keep in mind that tenants generally look for value when choosing a rental property. Increasing the rent based solely on the level of your expenses is not a good strategy.

4. Condition of the Premises

In performing a rent review it’s also important to see how the property has changed. Is it still looking like it did when the tenant moved in or is it starting to look a little tired? When looking at comparable properties make sure the level of finish and condition is similar.

5. Correct Notice

NSW Legislation states that we must give the tenant 60 days’ notice plus 4 days for delivery by post unless you have authority from the tenant to use email to deliver notices.

The notice must include the amount the new rent will be, the day the new rent amount will take affect and be signed by either the landlord or agent.

Managing investment properties require thorough schedules, take a look at our previous blogs ‘Failing to Plan is Planning to Fail’ or ‘Budgeting and Expenses’.

If you would like help with conducting a rent review or would like to know what your property could rent for in today’s current market, call George from Property Quarters on 0412 330 588. You will be provided with a free and no obligation, detailed report on the rental market in your area and where your property fits in. Alternatively you can leave a message here and one of us will be in touch with you.

About Us

George Astudillo is the founder of Property Quarters, an agency that values communication and great relationships with its landlords.

George now has more than 30 years in real estate, including 15 years as the owner of a national real estate franchise. He’s also an accredited auctioneer and is the author of “The Landlord Mindset”, a book with his best tips to help landlords look after their investments. His book has been quoted in the SMH, The Huffington Post and The Age.

As the founder of Property Quarters, George takes great care in looking after his landlord’s investments. Having seen it all and worked with may landlords and tenants, he’s a strong mediator and negotiator and knows how to navigate through property legislation.

George is trusted by his landlords to advise on the financial management of their investments. He’s put in place proven processes to ensure each property he looks after is managed effectively to retain its value, quality tenants and rental income.

If you’re looking for a property manager who thinks like a landlord and whose business is built on tested processes, contact us by clicking HERE.

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Copyright © 2016, www.propertyquarters.com.au

Location Profiles in the Eastern Suburbs


Looking to invest, buy or rent in the Eastern Suburbs and would like to know a little more about what each area represents?

At Property Quarters we have compiled location summaries across the Eastern Suburbs. Our ‘Location Profiles’ page features ready statistics for you to view when considering where to invest, buy or rent.

We have done the research for you with a little help from the Australian Bureau of Statistics to provide current/past demographics and dwelling overviews. By including past and current census information you can compare statistics to analyse target growth areas. Our easy to comprehend information profiles will also make identifying suburbs that match your criteria and purposes simple, with just a few clicks.

Create a portfolio by either saving or printing our convenient PDF. Download links are at the bottom of each page.

At Property Quarters we love hearing your feedback, please feel encouraged to send us suggestions on how you think we could improve or add to our profiles by clicking here.

Click here to visit our Location Profiles page.

For more information on rental trends in the Eastern Suburbs see our blog ‘June 2018 Sydney Rental Trends’.

About Us

George Astudillo is the founder of Property Quarters, an agency that values communication and great relationships with its landlords.

George now has more than 30 years in real estate, including 15 years as the owner of a national real estate franchise. He’s also an accredited auctioneer and is the author of “The Landlord Mindset”, a book with his best tips to help landlords look after their investments. His book has been quoted in the SMH, The Huffington Post and The Age.

As the founder of Property Quarters, George takes great care in looking after his landlord’s investments. Having seen it all and worked with may landlords and tenants, he’s a strong mediator and negotiator and knows how to navigate through property legislation.

George is trusted by his landlords to advise on the financial management of their investments. He’s put in place proven processes to ensure each property he looks after is managed effectively to retain its value, quality tenants and rental income.

If you’re looking for a property manager who thinks like a landlord and whose business is built on tested processes, contact us by clicking HERE.

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Copyright © 2016, www.propertyquarters.com.au

June 2018 Sydney Rental Trends


If you want to live amongst Sydney’s most prestigious suburbs all signs are pointing East.

The Eastern Suburbs of Sydney have long been known for an increasing rental demand but what kind of rental prices are they fetching?

Bellevue Hill has taken the lead for highest median rent price for houses at $2048 p/w, with Point Piper taking number one spot for highest median rent price for units at $998 p/w.

According to Domain Groups latest Rental Report it seems Sydney’s Eastern Suburbs have graduated to become the most costly region in the country.

Overall, when you combine houses and apartments, the highest ranking Sydney suburbs for median rental prices, according to the latest Domain Group Data for June 2018, are;

  1. Darling Point – $2,625
  2. Watsons Bay – $2,500
  3. Tamarama – $2,200
  4. Bellevue Hill – $2,024
  5. Vaucluse – $1,875
  6. Kurraba Point – $1,800
  7. Rose Bay – $1,768
  8. Dover Heights – $1,700
  9. Double Bay – $1,690
  10. Clontarf – $1,650

When it comes to popularity as opposed to price and prestige, Sydney CBD was the most searched for suburb followed by Surry Hills, Paddington, Newtown and Darlinghurst. It seems convenience and ease of transport is highly desired by Sydney renters. Mosman is the suburb most frequently searched by those looking to purchase.

About Us

George Astudillo is the founder of Property Quarters, an agency that values communication and great relationships with its landlords.

George now has more than 30 years in real estate, including 15 years as the owner of a national real estate franchise. He’s also an accredited auctioneer and is the author of “The Landlord Mindset”, a book with his best tips to help landlords look after their investments. His book has been quoted in the SMH, The Huffington Post and The Age.

As the founder of Property Quarters, George takes great care in looking after his landlord’s investments. Having seen it all and worked with may landlords and tenants, he’s a strong mediator and negotiator and knows how to navigate through property legislation.

George is trusted by his landlords to advise on the financial management of their investments. He’s put in place proven processes to ensure each property he looks after is managed effectively to retain its value, quality tenants and rental income.

If you’re looking for a property manager who thinks like a landlord and whose business is built on tested processes, contact us by clicking HERE.

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Copyright © 2016, www.propertyquarters.com.au

Setting an Asking Price- The First Step in Marketing


Mortgage Calculations Image

Where do you start when marketing your investment property?

The answer is- setting a rental price.

In our previous blog we discussed ‘Marketing Your Rental Property- The 5 Essentials’ now we will start at the beginning. It is important to get your initial asking price right as the wrong thinking and strategy could lead to lengthy vacancies subsequently affecting your bottom line.

Market value is the price a tenant is prepared to pay a landlord under normal conditions at a given time. What that means is that, from a field of possible properties to choose from, the tenant will decide which one represents, to them, the most appropriate home and the best value.

There are many factors that can influence the rental price, but the two main ones are supply (how many properties are available) and demand (how many tenants are available) at this particular moment.

If there are more tenants looking to rent than there are properties, they will compete with each other, pushing prices up. On the other hand, if there are more properties available than there are tenants, the landlords compete, pushing prices down.

The relationship between supply and demand for rental properties can be estimated by knowing the vacancy rate. The vacancy rate indicates the percentage of investment properties that are currently vacant. Each area has a different vacancy rate, and each area has a different method of interpreting the vacancy rate.

For example, Sydney vacancy generally hovers around one to three per cent. The lower the vacancy rate, the tighter the market and the stronger the rental prices. At vacancy rates below one per cent, tenants become desperate and start offering more than the asking price to secure a property.

In other areas, a vacancy rate of eight to ten per cent might be considered normal. Check out the vacancy rates in your area, as this is the first indicator of how strong the rental market is at the moment.

Keep in mind that, like buying, renting has seasons as well. Generally, the closer to Christmas, the fewer tenants will be looking. This starts to become noticeable in November, but December is traditionally very quiet. On the other hand, beachside properties are more desirable in summer and become quiet in winter.

 

Research

Once again, it’s time to research. There’s a number of resources that be very helpful in giving you an idea of current prices. Companies such as Australian Property Monitors and CoreLogic RP Data can provide information on properties that have been leased in your area.

It’s also helpful to know which properties you will be competing with. While tenants start their search sorting properties by price and location, it’s quality and cleanliness that will determine value leading to their ultimate choice.

Look on domain.com.au or realestate.com.au for a list of what is available. However, to get a real feel for comparable properties, you need to take the time to inspect them.

Finally, keep in mind that your expenses have no bearing on what a tenant will be willing to pay. This is a trap many investors set for themselves – needing a certain rental to cover their costs. Eventually, they either get lucky, which is rare, or lose months of rent.

Pricing strategy

Once you have a feel for price, an effective strategy is to start at slightly higher than the market rate and be ready to move down quickly if necessary. Being slightly above the market gives you the opportunity to get a premium rent if it’s out there, but be ready to listen to the market and act quickly if it’s not.

Renting a property is different to selling your home. When selling, it pays to wait for the best price you can negotiate, even if that may take a little while. After all, you only get one chance. With renting, every week the property is empty is costing you money in lost income.

Chasing a few extra dollars in weekly rent makes no sense if you are losing thirty times that every week in lost rent. The longer the property is vacant, the less money you will make. Sometimes, accepting a lower rent, particularly to secure great tenants, is the wise move.

 

Want to know what you property could rent for in today’s current market? Obligation and cost free, call George from Property Quarters on 0412 330 588 for a detailed report on the rental market in your area and where your property fits in. Alternatively you can leave a message here and someone will be in touch with you.

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Landlord Insurance- Manage Your Risk


Proof of Identity checklist image

Landlord insurance is your investment property safety net and should be considered a ‘must have’.

It will protect you, your family and your property from potential financial difficulties, thereby lowering your investment risk.

Nobody knows what’s around the corner. Situations change and good tenants can also change under specific circumstances. You don’t want the events in your tenants’ lives to consequently have an adverse impact on yours.

Looking for the appropriate insurance cover can be confusing and time-consuming. Take your time deciding as above all you don’t want to find out you are not covered when you need it most.

The following is a guide to the different types of cover and what they entail.

Building insurance covers:

  • Replacement cost of the building;
  • Demolition and removal of debris;
  • Locks and keys; and
  • New structures to comply with all statutory requirements.

If you own an apartment, building insurance is paid through your quarterly fees. Wallpaper and paint may not be included though and should therefor be included in your contents cover.  Other items that can be added separately are things such as air-conditioning, lighting and flooring.

Contents insurance covers:

  • Carpet and other flooring
  • Light fittings
  • Window finishes
  • Manchester and linen (if supplied)
  • Any furniture itemised in the tenancy agreement
  • Kitchenware cabinets and appliances
  • Bathroom vanity, cabinetry and shower screens
  • Tap ware
  • Tiling, paint and wallpaper
  • Household goods such as gardening equipment
  • Washing machines and dryers
  • Potted plants
  • Portable pools, spas and equipment

In an apartment, make sure you know which items are not covered by the strata building insurance as you may want to include them in your own insurance. In the event of fire elsewhere in the  building, your unit may be affected by smoke and water damage consequently needing new paint and carpet, or at the very least cleaning as a result.

Events

There is a wide variety of events that can be covered, including:

  • Accidental loss or damage
  • Malicious damage
  • Theft
  • Fire or explosion
  • Lightning
  • Earthquake
  • Riot or civil commotion
  • Water damage – leaks, rain, floods and tsunamis
  • Oil heater leakage
  • Accidental glass breakage
  • Storm or rainwater
  • Electric motor burn out
  • Impact from aircraft, trains, automobiles, space debris, satellites, falling trees or branches, TV antennae, satellite dishes or radio masts

Keep your property safe from unnecessary damage by reading our previous blog: Winter is Coming- A Rental Property Checklist.

Check policy exclusions carefully. For example, some policies do not cover:

  • Accidental damage caused by the tenants
  • Theft by the tenant
  • Damage by the tenant’s pets
  • Tsunamis or other actions by the sea or rivers

Loss of rent

This covers you for loss of rent in the event that the property is not habitable and cannot be leased due to any of the events listed above.

It also covers any rent default by the tenant. However, there are usually conditions attached to a rent default claim, so check the conditions carefully.

When choosing a good tenant there are a few things to consider in order to maximise your financial return. See our blog: 3 Keys to Choosing the Right Tenant.

Public liability

This relates to your legal liability as the owner. It is in regards to an event at your investment property which results in death or injury to other people or damage to other people’s property in or at your investment property.

Consider a minimum public liability cover of no less than twenty million dollars.

No matter what your appetite for risk is, having the right Landlord Insurance goes a long way to creating peace of mind.
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Copyright © 2016, www.propertyquarters.com.au

3 Keys to Choosing the Right Tenant


Approved Tenants

The right tenant is the corner stone of a successful investment property. This is where the rubber meets the road. The tenant can either make or break both your financial position and your spirit. Many property owners have already experienced the pain and frustration of a nightmare tenant which can potentially be 12 months of well.. hell.

The following are the three crucial qualities we need to identify and look for in a tenant to become the perfect match for your property,

1. Reliability – will they pay the rent on time?
Successful applicants will need to prove financial stability and a regular income. Without this your steady income stream is at serious risk. Once this has been established, avoid the burden of costs associated with rental arrears by ensuring your tenant has a long history of disciplined payments. After all you may be relying on this income to pay bills of your own, such as a mortgage.

2.Responsibility – will they look after the property?
A responsible tenant that will treat your property like their own are worth their weight in gold. Respect and diligence goes a long way, this means taking great care in the cleanliness and presentation of your property as well as reporting any maintenance concerns with effective communication. Remember: A clean tenant that takes care of their home and surroundings will be attracted to apply for a property that is in tiptop shape to begin with.

For more information on presenting your property to attract the right tenants see our previous blog “7 Easy Ways to present Your Property to Attract Great Tenants”

3.Co-operation – will they be co-operative in the event of an emergency?
An easy-going effective relationship between landlord/agent and tenant is essential. Emergencies will happen from time to time and prompt access to the property to carry out repairs or clean ups can save further damage and/or costs. A good tenant needs to be willing to communicate and be co-operative to find and implement a solution if necessary.

Having the right tenant will not only give you a good financial return but will also give you the peace of mind you are looking for. Take your time in choosing a quality tenant and don’t be afraid to go with your instincts on occasion, it is better for your property to remain empty for another week then to be occupied with a bad tenant that will be difficult to remove.

When you find ‘the one’ look after them and they will in turn look after your investment.

See our previous blog for the featured Landlord Checklist, a guide to a maintaining a happy tenant in “How to Keep a Great Tenant”.

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Copyright © 2016, www.propertyquarters.com.au

Ways To Get Into The Property Market


Huffington Post Australia (ways)

There are alternatives but you need to be aware of the pitfalls.

(From the article and interview featured in The Huffington Post Australia)

With so many people literally locked out of the hot Sydney property market, it’s only natural to look for alternative ways to get a piece of the action. Perhaps you could co-invest with a sibling or close friend?

You could look at ‘rent-vesting’, buying a car space or consider property trusts.

One solution by Fintech company BRICKX is a way to invest in a property for less than $100. It works by dividing individual properties into 10,000 ‘Bricks’, which are effectively units, in a Trust.

BRICKX publicly launched in September 2016 and operates as a retail managed investment scheme for people who could otherwise not afford to get into the property market. It works by offering fractions of a property, known as Bricks, rather than purchasing entire houses or apartments.

BRICKX recently put a Bondi Beach apartment on the market, giving investors the opportunity to access the lucrative Bondi property market for just $96.

Real estate expert and author George Astudillo told The Huffington Post Australia there are other ways to get into the property market, but you need to be aware of the pitfalls too.

“If we look at investing with friends or siblings, it’s usually one of those ‘It was a great idea at the time’ moments. Very few property partnerships work well, and there are several reasons why,” Astudillo said.

Co-investing with a sibling or friend

Risk tolerance: How people relate to risks varies from person to person. An investor with low tolerance to risk will need to be cautious and utilise a strategy based on security, while an investor with a higher tolerance to risk will be more aggressive with their choice of strategies. Finding someone that is compatible with your investment comfort zone is quite difficult and this difference in attitude will lead to friction. Be aware of your comfort zone, take a look at our blog “What is Your Risk Tolerance?”

Workload: Many partnerships become undone when one party does all the hard work. When it comes to investing in property there will always be decisions to be made. If one partner is always relied upon to make decisions, this can lead to resentments.

Affordability: All partners need to be able to afford not only the purchase of the property but also its ongoing maintenance and repairs. When renovating, can all parties afford the level of quality that will attract the appropriate tenant and rental?

“You also need to consider exit timing. Selling an investment property is all or nothing. If one partner needs to sell, there needs to be a plan for the other partners to buy that share or decide whether the property need to be sold,” Astudillo said.

Property Trusts

Property trusts are an easy way to buy into the property market indirectly. These are either known as Australian Real Estate Investment Trusts (A-REIT) which are listed on the Australian Securities Exchange or Unlisted Property Trusts.

“Before investing you need to know how each trust is managed as this is more like buying shares than property. You can also consider buying shares in a listed real estate company,” Astudillo said.

Rentvesting

When you can’t afford to buy a property you would be comfortable to live in, you buy a property as an investment.

“This way, you can then rent a property that is comfortable and rent out your investment, becoming both a landlord and a tenant,” Astudillo said.

“Rentvesting is probably the best of both worlds. It allows you to get into the property market without the inconveniences of living in a property that makes you unhappy.”

View the full article on the Huffington Post Australia HERE

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Copyright © 2016, www.propertyquarters.com.au

 

Mortgage Brokers – What do they offer the property investor?


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In today’s post I’m interviewing Theo Angelopoulos from ‘The Loans Analyst’ on mortgages, rates and offers from a property investor’s point of view.

Hi Theo, lets dive straight in, I have 8 key questions for you:

Q1. What are your thoughts on the current interest rate situation?

It’s the most competitive interest rate market ever; record low rates with potentially another rate cut by year end. To find the low rates you need to look outside the big 4 or negotiate with your bank for a better deal.

Q2. Is it a good time to ‘fix’ the interest rate?

Fixed rates are so low you may consider locking in a portion, but be careful when locking in rates as you do lose some flexibility. As an investor in a decreasing rate environment you should remain agile just in case you need to change lenders, either to fund the purchase of another investment property or get a better interest rate on your loans.

Q3. What are some of the indicators that rates are about to change?

The key indicators to track would be the inflation figures. If inflation remains low, another rate cut may be on the cards. Also keep an eye on property values, if there is a sudden surge in property values expect the RBA to slow it down by increasing rates, but I can’t see that happening anytime soon.

Q4. What is the most important thing to know about mortgages?

All banks are not created equal. Every bank has different credit policies, interest rates and appetite for investor loans. Last year we saw APRA impose tighter lending standards in order to slow down the growth in property investing. However, over the past couple of months, banks with a low exposure to property investors have changed their lending policies offering better incentives to increase their market share. This is why you need to shop around and review your property loans every 2 to 3 years. Rates and conditions change, what was good when you first took out your mortgage may not be the best for you now.

Q5. What are the main lending policies for investors to be aware of?

Recent changes to lending policies have made it more difficult for investors to grow their property portfolios. The main change has been around borrowing capacity. Investors with 2 to 3 properties are finding it difficult to buy the next property. The difference in borrowing capacity between lenders can be measured in the $100,000’s. Seeking the advice from a loan structuring expert is paramount. Investors are also paying higher interest rates for their loans compared to owner occupiers. And, if you are paying interest only, you may also notice a slightly higher interest rate.

Q6. Explain re-financing and who should consider it?

Refinancing is simply swapping your current property loan to another lender. Apart from increasing the size of the loan to buy another property, you would want to refinance to get a better deal. There are very competitive home loan deals at present and you could potentially save thousands of dollars by refinancing. If it’s been more than 2 years since you reviewed your home loan, you could be paying more than you should. Although there have been many interest rate cuts, not all of the banks have passed them on to their customers.

Q7. Can you share some special offers in the market at the moment?

If you’re a property investor looking to borrow no more than 80% of the value of the property and prepared to make principle and interest loan repayments, I have a couple of lenders offering extremely low rates looking for investors wanting to pay down their debt.

If you are an owner occupier with a home loan less than 80%, you are a PAYG employee (i.e. working for someone else) and have been with your employer for 12 months or more, then I know of one bank that is offering the lowest variable rate home loan I have ever seen.  It also comes with 100% offset account, no application fees or annual fee for the life of the loan. It’s very popular and I’m not sure how long it will last.

Q8. What makes you different?

My smile and that I love helping people to buy property and create wealth through property investing.

About Theo

Theo is founder of “The Loans Analyst”. A premium mortgage broking business that has been helping clients to buy property and get a great deal on their home loan for over 10 years. Theo is  passionate about property and a property investor himself. Theo is a member of Property Investment Professionals of Australia (PIPA) and full member of the Mortgage and Finance Association of Australia (MFAA). His office is located in the heart of the Sydney CBD and always happy to help aspiring property investors get into the market. Theo’s qualifications include Bachelor of Commerce degree, Advanced Diploma of Financial Planning and Diploma of Mortgage Broking.

For more information or to contact Theo, visit his website HERE.

 

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