Why a Fall in House Prices Would Hurt Australian Property Investors

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There has been endless speculation that the Australian housing market is heading for a ‘correction’ and if you don’t own a property you may relish this thought. But if prices came down 10% or even 20%, would that really make it easier for you to buy a property? The average house in Sydney is now worth a million dollars. But if that price fell to $800,000 would you be able to raise a deposit of $80,000 plus about $40,000 in purchase costs and would the bank approve a loan of $720,000 to you? If there was a house price drop of 10 to 20%, how would it impact the real estate market? There would be more houses and apartments for…

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How to Weather the Property Cycles and Build Real Wealth

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That’s what I say when someone buys a property cash cow with future development potential. They are literally putting over $1m into their future. But there’s a catch. The money comes in over time, not in one lump sum and only if they hold it for long enough! That doesn’t excite some people. They think a million-to-one shot of winning it all immediately via an actual lotto ticket is sexier than a guaranteed return over time. Smart investors see that a guaranteed return over time is the one to get excited about. Timing versus time in Timing the market is just as important as time in the market. You need to buy and hold property to see a substantial return….

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Why are granny flats making a comeback

Why are granny flats making a comeback?

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More and more home owners are building granny flats in their backyards, but it’s unlikely the new dwelling is for a grandmother. The housing crisis means a two-bedroom granny flat can boost your yield by 2-3%. That means more cash flow. More cash flow means more choice, freedom and if you need it…borrowing capacity. Alternatively, home owners who don’t want full-time tenants are listing their granny flats on Air BnB and hosting overseas visitors. Granny flats are a shrewd investment, but how easy is it to construct one and what is the cost? Also, does every state allow granny flats to be rented like a normal apartment? State governments around Australia have made it easier for home owners to build…

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What Can Go Wrong in a Real Estate Sale

What Can Go Wrong in a Real Estate Sale?

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If you are about to buy or sell a property then it pays to be across common problems that crop up during the sale of real estate. Have you noticed houses on real estate sites that one day are under contract but then suddenly the ‘under contract’ text is removed and they reappear for sale? Of course the neighbours will ask: What’s wrong with that property? And even other real estate agents might become suspicious, but properties go back on the market all the time, and there is usually an innocent explanation. Buyer cannot get finance approve One of the most common reasons property sales fall over is because the buyer cannot get their finance approved. According to official statistics,…

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Landlord Insurance Coverage

What Should Landlord Insurance Cover?

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So you’ve found a red hot investment property that ticks all the boxes, cash flow, growth potential and you can add value, but now it is vital that you find the right landlord insurance. Landlords insurance is a policy you take out in addition to building and contents insurance. Its prime purpose is to protect the property owner from financial loss connected to renting out a property. When you take out landlord insurance you are essentially insuring against (1) possible damage to the house and assets; and (2) any hurt that the property may inadvertently cause the tenants. How much protection does your property and your tenants need? Which policy should you choose? When buying landlords insurance do remember that…

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Property Development Game

How to Get Into the Property Development Game… Safely!

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Subdivision is often regarded as the holy grail of real estate – a way of doubling or even tripling your money in a short-time, but subdivision can be complicated and time consuming. However if you do your research and get organised, it is a great way of creating a profit. Start off small – subdivide a suburban block Many people think that to get into development, you need to purchase a large tract of land and divide it into multiple allotments – almost like creating a new housing estate! But most people enter property development by buying a large suburban block with a single house then they subdivide the land and just sell the land. This is the easiest and…

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SPX Tries to Break Above 2360 Resistance Zone

SPX Tries to Break Above 2360 Resistance Zone

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The Markets Last night we saw the S&P 500 try to break its resistance zone at 2,360. If we look at a 15-minute timeframe chart we can see the S&P 500 did move up earlier in the day to 2,366, but then it moved back down, below the resistance zone. The S&P 500 is the best overall gauge of the US stock market. On that 15-minute chart you can still see an ascending wedge pattern, which is bearish. You can also see an ascending wedge pattern on the daily chart. It is a reversal pattern and it indicates that if there was a break below the ascending wedge’s lower trend line, you could expect a move to the downside. I…

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How to Buy Property with Just $20K

How to Buy Property with Just $20K

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It is too easy to think of Australia’s property market as a runaway train; the driver has lost charge of this fugitive beast. House prices keep rising and if you don’t yet have a foothold in the market, you’ll be forever locked out – but hang on, we’ve heard this all before. It is still possible to buy a property in a capital city with a deposit of $20,000 and the current boom in Sydney and Melbourne is likely to slow soon while other cities begin to play catch-up. That is if history is anything to go by. There are a number of ways to get into the market with just $20k. Instead of looking to buy a “home”, seriously…

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The Secrets to Maintaining your Investment Property

The Secrets to Maintaining your Investment Property

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To keep your body in shape you need to exercise regularly and eat well, to keep your house in shape you need to attend to the property regularly. If you neglect your health, illness may be the consequence. If you neglect to maintain a residential property, you may be very disappointed when it comes time to sell that property or you may experience long vacancies. Of course it is easier to keep on top of maintenance as a home owner, but property investors, you must ensure your house or unit is in good repair. It never pays to leave it all until a tenant moves out or delay repairs. Attending to repairs ASAP is a responsibility of you the Landlord. Check…

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How to build a property portfolio

How to build a property portfolio, in light of the APRA changes

By | Property Investment | 2 Comments

There is good news and bad news for property investors in Australia. The Australian Prudential Regulation Authority announced at the end of March that it would be restricting interest-only loans. The government regulator has told all banks that from now on, interest-only loans must be restricted to 30 percent of new residential mortgage loans. Interest-only loans account for nearly 40 percent of new residential mortgage loans by banks, which is high by international standards. The Australian Prudential Regulation Authority is restricting these loans as house prices continue to grow at record levels in Sydney and Melbourne. Banks are also seeing high and growing household debt while interest rates are at historic lows. This is worrying because wage growth is limited….

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