Top 10 Property Investment Tips

Top 10 Property Investment Tips

Buy, Don’t Sell

When I left Sydney in 2005 for the Sunshine Coast Qld my mum have me one bit of advice. She said. Whatever you do, don’t sell your Sydney property. So we didn’t we hung onto it. At the time the Sydney market was not doping too much. At his time we really want to be doing a few more things in our new home town on the Sunshine Coast, so after a while we sold that property for around $440,000. My mum was right. If we had kept it, it would now be worth around $1,000,000.

When you talk to any savvy property investors that’s truly wealthy, most say the same thing. Once you’ve secured an investment property don’t sell. Instead look long term and use the equity you gain through capital growth as a deposit to buy another. During the global financial crisis the real estate market on the Sunshine Coast look a real hit and for around 3 years the market did nothing. People panicked and sold for losses. But once that was over, the market started to move again and everyone who held onto their properties are finally benefiting from that. So buy, don’t sell.

Buy blue-chip

You can’t go too wrong buying anywhere on the Sunshine Coast. Over the next few years the Sunshine Coast Qld has some very exciting major things happening. Just like the stock market you are better off long term buying in blue chipo areas . It’s worth paying market value for a better property in a top suburb than it is to get a lower price for a property no-one else really wants, very cheap properties also attract very cheap tenants. . There are always better performing suburbs that retain their value from decade to decade. When you do your research you’ll find though that the entire sunshine coast is a fairly stable and consistent area to invest in.

You can consider buying near  the train line, buying near the beach or buying near large infrastructure like hospitals, shopping centres and the airport.

It’s time in the market, not timing the market that counts

It’s impossible to time the market, because by the time we notice the market has turned and is going up. We would have already seen the bottom. So if you are keen to buy now, just do it and get on with it. Even if you buy now and the market goes down for a little longer, over time it will correct and you’ll benefit from the capital growth. Keep in mind real estate is long turn. Don’t try to be a millionaire overnight, time and capital growth is the biggest, easiest way to build wealth in real estate. It’s a bit like “set & forget”. The real secret to wealth is compounding your investments. Aim for consistency.

Go against the grain

So many people have an opinion. It’s amazing how many people have opinions on property investing that have never even done it. If you want to invest in property just get started. I mentioned above it’s not about timing the market. If the market is falling and people are selling, it’s probably a great time for you to buy. In fact right now is the perfect time to buy on the Sunshine Coast because the market has slightly slowed. Less is on the market, they are on the market for longer & I am sure if you look around you’ll be able to secure a property for a price you’re happy with.  Consider doing the opposite to what everyone else is doing. Buy when everyone sells; sell when they buy. Don’t listen to negative people telling you you’re doing it wrong.

Don’t fear the gear

Recently we had the federal election where if Labour got elected negative gearing may have been at risk. Lucky that didn’t happen. If you have a high income negative gearing an investment property is a fabulous way to reduce your tax and build wealth at the same time. I’m a real estate agent not an accountant so don’t listen to me get advice from your accountant. You can also read more about negative earing in te ATO site here

Be passionate about your investments

Get excited. Investing in property is fun & rewarding. Believe in your investments. It will feed your drive and keep you focused over the coming years with what’s possible. When you can look at making small improvements to the property because all this will help with adding to the value, finding and keeping better quality tenants and being able to increase your rent. Consider new paint, new carpet, improvement to the gardens or adding a shed or carport.

Be driven

Drive enables you to take risks that very few others would make and get you to where you want to be faster. Constantly focus on the results of your investments. Create a spreadsheet and estimate compounding capital growth over the next 5 or 10 years. Then based on that estimate when you may have created enough equity to make your next purchase. Capital growth is something that can sneak up on you with real estate. Possibly the first year you may experience leittle growth but that may dramatically chat up to you the following few years.

I know people who have bought their first investment and to their surprise within less than two years have been in a position to buy their second.

Keep refinancing

Just this week I save around $7,000 in interest PA through refinancing. But here’s the thing. I didn’t even change banks. I asked them if they could do any better, it seemed they were prepared to make some very small adjustments, so we pushed them. It’s amazing when they find out they may lose  a client with lots of loans, what they can do. About an hour ago I got an email from my bank confirming the new rates have not been activated.

You really need to see what your current interest is, what else is available from other banks, then speak to your bank again and talk to the loan discharge department, this will get them moving. Even if they make an immediate adjustment now, it will allow you to do a big more shopping around.

Stick to your strategy

Work out what works for you. Once you develop a strategy, stick to it. You need to stick to it long term. Its time and compounding capital gains where the big money is. Over the last few years the Sydney and Melbourne markets have been falling but last month they grew. Plus over the next few months there are some big positive changes happening with lending that will give buyers access to more money & the word is interest rates will slightly fall. People that held real estate through this tough time will start to benefit.

Don’t retire on property rents

Many people think you’ve got to pay property off as quickly as possible, and retire on rental income. But it’s usually the capital growth that makes real wealth. If you’ve generated $200k in equity, through capital growth,  you can use that as a funding to buy another investment, then repeat until you have a portfolio of properties all benefiting from long term capital gains.

BONUS TIP

Always consult the professional experts in their field to assist and guide you with advice.

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