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3 steps to building the property expert team to back your goals
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- Buying
3 steps to building the property expert team to back your goals
Presented by REIV
22 Feb 2023, 9:56am
... more- Guides
- Buying
3 steps to building the property expert team to back your goals
Presented by REIV
22 Feb 2023, 9:56am
Thereโs an old saying: โalone we can do so little, together we can do so much.โ When it comes to property, nothing could be more accurate.
No matter how property savvy you are, enlisting the help of the right agent who knows the neighbourhood better than anyone, with the support of a wide team โ from a practical financial advisor to a knowledgeable conveyancer - may help to achieve a better result for your property goals.
Agents are the key to drivers to net a better property outcome. Picture: Getty
Here are the steps to finding your support group, the secret ingredient to making your property journey a successful one.
1. Find the right agent
Buying or selling property is one of the biggest financial decisions you can ever make, and certainly one of the most stressful. You want to ensure the people around you are not only qualified, but committed to helping you find the perfect outcome. That starts with your first point of call; the agent.
The right agent has more than just a certification, theyโre those who have been trained the right way, and those who never stop learning.
By staying in the know on your neighbourhood, property legislation, and compliance, the right agent can help guide you on your own personal property journey.
Real Estate Institute of Victoriaย CEO, Quentin Kilian, says REIV members have access to unique training and learning opportunities to always stay on top of the latest updates.
Qualified REIV agents are always on top of an ever-changing market. Picture: Getty
โWe offer continuing professional development, which means our real estate professionals are able to go the extra mile for their clients,โ Kilian says.
Use the REIV agent finder tool to find a local area expert. Talk to them and choose one that suits your needs.
2. You can get financial advice specific to your needs
After finding the agent right for you, itโs often time to start thinking about money.
Sound financial advice may help us achieve our goals faster, whether it be taxes, budgeting or superannuation, so why should property be any different?
A financial planner who specialises in property can help you budget and save for your down payment, negotiate a better mortgage rate and, most importantly, help you create a comprehensive plan that includes your long-term property goals.
Paul Feeney, founder ofย Otivoย says a great financial advisor understands their clientโs goals and objectives.
A financial planner can help you plan long-term property goals. Picture: Getty
โThey will take the time to get to know their client so they can make recommendations in line with what their client wants to achieve,โ he says.
3. You can avoid legal mistakes and extra costs
Whether youโre buying or selling, once youโve navigated to the transaction, means then steering through a difficult regulatory process.
A conveyancer can steer you through these and alert you to potential pitfalls, says NSW solicitor Elizabeth Johnstone.
โA contract for the sale of land can be very lengthy and complicated โ mistakes in the transaction can be costly and sometimes impossible to sort out later,โ she warns.
โConveyancers are working with contracts every day. They will explain the rights and obligations required and can help tailor the contractual arrangements to a clientโs specific needs.โ
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The Real Estate Institute of Victoria (REIV) is the stateโs peak real estate body since 1936. The REIV understands the significance of property in your life, which is why they focus on developing and supporting real estate professionals who make a choice to go the extra mile for their clients.
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How to create a five-year investment plan (and why you need one)
- Guides
- Buying
How to create a five-year investment plan (and why you need one)
Presented by HSBC
27 Jan 2023, 1:11pm
... more- Guides
- Buying
How to create a five-year investment plan (and why you need one)
Presented by HSBC
27 Jan 2023, 1:11pm
When it comes to performance, preparation is key. The same goes for your property investment goals.
Creating a property investment plan comes down to a few simple things: where you are now, where you want to be and what you need to bridge the gap.
It gives you a clear idea of your investment strategy and breaks it down into simple, actionable steps to achieve it.
It's not a set-and-forget document โ it should be an evolving roadmap tailored to your unique situation.
Short-term changes โ such as changing jobs, starting (or expanding) your family, or renovating your house โ can impact your financial position. To ensure these don't derail your long-term goals, setting a five-year property investment plan is a great way to make sure you're on track.
Where are you now?
If you're thinking of building a property portfolio, there are several important steps to consider.
The first step is to carefully assess your financial position. Consider how you will fund the deposit and secure a loan.
โStart with quantifying how much of a deposit youโll need and where your deposit will come from,โย says HSBC Australiaโs Head of Secured Lending, Rory McCotter.
โDo you have savings to contribute, or can you utilise equity in an existing property?โ
If youโre planning to utilise equity, how leveraged is your existing portfolio? Picture: Getty
โMake sure your finances are in order,โ Rory adds.
โAre your bills up to date? Do you have any outstanding credit card debit? Have you spoken to your accountant to understand any tax considerations or are there any big life expenses, such as a wedding or a holiday, expected in the coming months that could impact your ability to service the loan?โ
To figure out how much money you can access, speak to your bank to determine your borrowing capacity and options.
Once youโre clear on how much you can play with, consider what your repayments could be, taking into consideration potential interest rate rises or other unforeseen costs.
Buying an investment property is one thing, holding onto it is another.
You'll need to consider how much income your investment will generate and whether it be positively or negatively geared.
If itโs negatively geared, can you afford to cover the shortfall? What about when you factor in rates, insurance, potential vacancy periods, repairs or other maintenance costs?
โPurchasing a property also involves other costs such as stamp duty, legal fees and inspection costs โ which can add up quickly โ so make sure you factor these into your budget,โ Rory says.
Crunch the numbers and make sure they add up in your favour. Picture: Getty
Itโs better to underestimate the rental yield and overestimate the potential out-of-pocket expenses so that youโre not falling short if โ and when โ unexpected costs arise, Rory suggests.
Where do you want to be in five yearsโ time?
Life happens โ your plan needs to reflect this. Looking at your future financial and lifestyle goals will help to clarify your decisions, Rory says.
For example, if your goal is to double your portfolio over five years but you have just changed jobs or are planning to soon, how will this impact your ability to get an investment loan approved? Does your investment timeline reflect this?
Look at your long-term financial goals, research the market and work out what home loan options you have so youโre in the best position to make an offer when the opportunity presents itself.
How are you going to get there?
Understanding your wealth-building strategy will help you make the right property decisions.
Do you want to buy a property that will have strong capital growth but lower rental yield, or do you want something that might give you a higher return on investment but not increase much in value?ย
While there is no right or wrong number when it comes to the amount of investment properties to hold in your portfolio, what is important is to find โ and buy โ the right properties based on your strategy.
Picking the right property is all about your strategy. Picture: Getty
If your investment strategy is to flip houses, the type of property youโre looking for will likely be different from someone whoโs wanting to use their investment property to generate rental income.
Doing your due diligence means youโre more likely to end up buying a property that executes on your plan.
You don't have to go on the property investment journey alone. There's a wealth of advice available and experts ready to lend you a hand.
A really important step is to speak to a bank to understand the different loan options available.
Before purchasing an investment property think through the features you might enjoy as part of your mortgage. You could save money by taking advantage of features such as an offset account, flexible repayments, the ability to redraw funds or the ability to split your loan between variable and fixed portions.
Whether youโre buying, investing or refinancing let HSBC help you find the right loan.
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5 Things First-time Investors Should Know - realestate.com.au
- Guides
- Investing
5 things first-time investors should know
Presented by Terri Scheer
20 May 2022, 10:57am
Buying property for the first time can be difficult to navigate and investing for the first time is a whole other beast.
According to realestate.com.au's Property Seeker 2020 report, investors are now starting younger and most don't have the high incomes or vast property profiles we've come to associate with typical the words 'property investor'. Rather, it's younger and less experienced buyers that are using this strategy as a first step into the property market.
If you're just starting out in the real estate game, consider our tips to help you navigate the path to investing.
1. Buy properties of substance
Buyer's agent and Director of Advantage Property, Frank Valentic, has devised a checklist of 15 criteria that help them narrow down quality investment properties. These include location, floor plan, aspect, street appeal, parking, security, proximity to public transport, lifestyle amenities and so on.
Your first investment property may not be the most glamorous home in the most glamorous area, but it could be a perfect investment! Picture: Unsplash
"It's something we've worked on over 20 years based on what tenants want, and what buyers will want in the future when you sell it," Valentic says.
"For example, if it doesn't have parking, if it doesn't have outdoor space, if it's an apartment without its own laundry facilities โ these are typically red flags for buyers and tenants."
Furthermore, don't get seduced by looks when it comes to investing in property.
"Avoid buying flashy new apartments that are high supply but low demand and will have limited capital growth prospects," Valentic adds. "It's better to buy the worst property in the best street, than the flashiest property in the worst street."
However, Valentic also warns against buying the cheapest property on the market.
"Avoid buying the cheapest property as it will be the cheapest low value property when you try and sell it," he adds.
2. Think big, start small
First-time investors should take baby steps into the market and avoid splashing out on their first investment.
"A successful property portfolio isn't built in a year," Valentic notes. "Think big but start small."
Start with a quality, low-risk manageable property. Picture: realestate.com.au/buy
"When building your portfolio, start slowly. Buy something smaller to start with. Eventually, you'll want to buy more houses that have land because land appreciates more than apartments, but we might not get there with the first property.
"It's important to get people into the market but make sure they don't overcapitalise."
Look for something under $750,000, Melbourne-based Valentic says. Your cap may be slightly higher in Sydney, where prices are higher, or lower in other Australian cities, where median prices are lower.
3. Keep it simple โ minimise risk
For that first property, Valentic advises keeping it simple in terms of what and where you buy. For instance, he recommends buying within your state for that first investment.
"Minimise your risks for that first property," Valentic shares. "I think buying interstate for your first property can be a higher risk strategy because you often don't know those markets as well. Buy what you know, where you know, where you can drive past, see it and touch it โ making it easier for yourself and build confidence. You could buy out of state for next properties when you're ready to diversify."
4. Consider a buyer's agent
If you want to invest but are feeling out of your depth, you could always enlist the help of a buyer's agent to help you find an ideal property to meet your investing goals.
Buyer's agents not only provide a wealth of knowledge on the market, they can tailor your property search (and purchase) to your investment strategy, plus participate in auctions for you to help you bag your chosen place.
If you want to invest but don't know how, a buyer's agent could be a bright idea. Picture: Unsplash
"Anyone can do their own tax return butย you use an accountant if you want better professional advice, if you want to make some savings in tax, structure your investments properly and so on. That's a good example of why you'd also use a buyer's agent. Anyone can buy property themselves but can they do it the best way, and buy the best property for the best price?" Valentic asks.
5. Don't forget insurance
The realestate.com.au Property Seeker 2020 report found 82% of landlords had insurance. There are, however, a small number who don't want it or haven't gotten around to getting it.
When you buy your first investment property, you'll watch your rising number of invoices and think 'hmm, what can I cut?' Top tip: it shouldn't be landlord insurance!
The costs of not having landlord insurance could add up. Insurance with leading landlord insurance specialists Terri Scheer can provide cover for tenant damage to the property, damage to the contents caused by storm, fire, flood or a range of other events, and any loss of rental income if the tenant defaults or can't pay for other reasons.
Insurance is issued by AAI Limited ABN 48 005 297 807 AFSL 230859 trading asย Vero Insurance.
Terri Scheer Insurance Pty Ltd ABN 76 070 874 798 AFSL 218585 acts under authority given to it by Vero Insurance. Before buying this insurance read the PDS and consider whether it is right for you. Go to terrischeer.com.au for a copy. TMD also available. The information is intended to be of a general nature only. Terri Scheer does not accept any legal responsibility for any loss incurred as a result of reliance upon it โ please make your own enquiries. This article has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it. The Target Market Determination is also available.
Australiaโs first landlord insurance policy to suit the specific risks landlords face was created by Terri Scheer in 1990. Our goal is to help our customers realise their capital and financial growth objectives by protecting their investment property and rental income stream from common tenancy related risks. Before our specialist policies, Australian landlords were exposed to considerable financial risks caused by tenants, including loss of rental income or damage to fittings, fixtures and furnishings. Very often, the bond isnโt enough to cover these costs. Our products cover landlords for these risks, as well as damage to your building, protecting both your property and your income.
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