Let’s Talk Property
What is the market like?
The Market is still very strong and the stock is very low, all of which means those who are choosing this moment to sell their home are often being rewarded with record prices.
At the higher end of the market young buyers from Sydney and Melbourne who envision moving into our communities in a few years’ time are taking equity from their homes, often in buoyant inner-city locations, and investing in Bangalow, Possum Creek, Byron Bay, Mullumbimby and Brunswick Heads and renting their properties until they are eventually ready to move north.
People are optimistic and excited about being part of our passionate and relaxed communities. The internet inquiry remains strong and open for inspection numbers are also healthy. There has never been a better time to sell than right now.
Common sense tips for property investment:
1) Buy a property that you could live in yourself – if you couldn’t live in it tenants will feel the same way.
2) A sense of community and a strong cultural life – are vital in attracting people to a town. Invest in areas with a strong cultural life.
3) Land. In years to come backyards will become increasingly valuable – people will be happier to live in smaller spaces – so small studios built in backyards to rent out will be more and more common. When investing, look for a property with space ‘down the backyard’.
4) Always use ‘the real rental’ figure not the summer rental figure when calculating repayments on an investment property.
5) Look at the capital gain as the icing on the cake when you’re buying an investment property.
6) Always focus on paying off debt. Set up your investment loans to pay fortnightly and at more than the required minimum mortgage amount.
7) There are good real estate agents and ordinary real estate agents. There are also good accountants and ordinary accountants. Ask around and find a good property accountant before you invest. Ask him or her if they are into property themselves?
8) Lenders will suggest you borrow money interest only finance on investment properties. I suggest you borrow money on the basis of principal and interest. Why? Because P & I mean that no matter what you are reducing debt every fortnight even if the market flattens out.
9) Visit as many open for inspections as possible before you buy an investment property and spend lots of time in the sold galleries in the real estate websites.
10) Finally, and most importantly, follow your gut. Investing in property is as much about common sense and gut feeling as it is about data and research. Also, ask good agents why a property is a good investment and collect investment historical case studies from different communities as these are invaluable in helping you know what community to park your hard-earned money in.
Principal -First National Byron Bay