Constant speculation and bank loan restrictions are echoing throughout the property market, so real estate buyers need to be savvier than ever before if they intend to make a good property purchase in 2016.
Purchasing a property is often the most significant – and only – investment many people make.
Regardless of APRA’s restrictions on investment loans, there are still affordable options for those who want to take the plunge. However, property buyers and investors need to make informed decisions to get the most out of their money.
Here are 5 proven tips that will help you make a good property purchase in 2016:
- Do your homework and research
Doing proper research is critical when seeking to invest in a property.
The Australian market is huge; there are many cities in which you could find a property to invest in, so don’t restrict your options to the hot cities of Sydney and Melbourne.
Investors who are willing to explore options beyond the borders of their home state are the ones who have higher chances of making a successful investment. If you’re open to investing beyond the limits of your city and state, you’ll need to do extensive research. Gather information from the varied online property websites and get insight on average prices, rents, value and demographics, to name a few.
- Get rid of your fears around financing
Property and lending scenarios have changed in recent months; and considering that buying a property is one of the biggest transactions you can make, you need to find the best loan. Some services offer you rate comparisons to help you. An experienced mortgage broker will make things easier for you, doing all the market research and presenting you with the best financing options. Eliminate your fears and challenge yourself to ask any questions you might have as well as shop around for the best options available.
- Use your creativity
In competitive markets, wise investors are constantly finding new ways to differentiate themselves from their competitors. Young people and people making their first investment are opting for what is called “rentvesting,” which implies renting while purchasing a property. Doing so, people can live in a more expensive area where renting costs are lower than owner-occupier mortgage costs. Then, simultaneously, they invest in a more reasonable area and pay their loan with their tenants rental payments. Think about it, you could live in your preferred location while your money is working for you.
Another option to avoid affordability restrictions is co-ownership. Of course, you need to thoroughly evaluate which trusted person (a family member or a close friend) could be your business partner, and you need to draft a clear agreement with that person to avoid any future misunderstandings.
- Set your strategy
Property investments are long-term investments that will add to your financial status and retirement plans. It is advisable to perform a yearly review of property investment portfolios as part of your long-term strategy.
- Get professional assessment
ASIC does not recognise property investing as financial products, so there is no legal framework to protect investors from fraudulent operators which could prioritise their own interests and profits instead of the clients’. The way to prevent falling into the hands of such corrupt operators is to get advice from qualified, established, and reputable property investing professionals.
If you have questions about investing or real estate, contact us to speak to a qualified real estate agent. We’d be happy to offer advice.
You can also check out our blog for more helpful tips and information.