Regardless of whether you have one, three, five or more investment properties, now is the time to evaluate what you want from your portfolio for the financial year ahead.
Many people simply tick the property investment box once purchased and hand the responsibility over to a property manager – this isn’t enough. You need to manage your property as a small business and review it on a regular basis particularly leading into a new financial year.
Where to retire is a big question for the baby boomer generation but if you’re in a financially sound position you don’t necessarily have to choose just one location.
Many of my retiring clients in this situation are choosing to ‘have their cake and eat it too’. They want the ongoing holiday lifestyle but don’t want to give up their friends or family roots.
Many sell the large family home which gives them the funds necessary to buy a ‘base’ in their current city and another property in their ‘sea change/tree change’ destination and they then interchange between the two.
With variable interest rates sitting at near all time lows, fixed rates even lower, rents steadily rising, vacancy rates consistently below 2% across the board and in many parts of the inner ring below 1%, the immediate impact of the GFC in the rear view mirror, employment strong and a pretty predictable election result coming up in a few months it’s any wonder that the Sydney market is well and truly on the move. Investors with their ears and eyes open are aware of this market shift over the past six months and are on the property hunt.
We often have people contact us for our thoughts on the latest "hot spots", sometimes just before they jump in with both feet.
First off let me say that there's nothing unusual about wanting to make a profit or achieve above market average growth.
What we have found is that most people want to know exactly where the next property ‘hot spot’ is going to be. You know, where prices are expected to jump suddenly giving buyer’s almost ‘instant’ growth shortly after they purchase.
Our advice is don't get caught up in the hot spot myth.
I don’t believe a successful real estate portfolio is about how many properties you have, it’s about their quality. That is of course if you want to build up a nest egg that will provide you with a reliable return on investment well into the future.
It doesn’t matter if the market is going up, down or sideways you can make money by renovating the right types of properties the right way. As with any successful strategy it starts with a plan. I always begin a renovation project with the end in mind to ensure I make a profit.
A couple of key points to any renovation plan are:
Every year I like to ask myself a couple of questions about each of my investment properties and with the end of the financial year fast approaching now is the perfect time. My questions include:
I am often asked how to do or how to find ‘no money down’ property deals. The following is generally my response. Q. Have you been to a property seminar recently? The answer is usually YES. More often than not if you go to a property seminar you will hear there are many ways to do no money down property deals particularly on the glossy, get rich quick seminar brochures, apparently it’s easy! I disagree.
In a wise move the NSW Government is tightening up the stamp duty exemptions - after all the savings are essentially passed on to vendors though increased sale prices rather than helping out the buyer. Come December 31 and exemptions and subsidies for first home buyers on existing homes under $600,000 come to an end.
In a strong and/or rising real estate market pretty much anything sells even properties that are not well located, well designed, or built to a high standard. However in a flat or declining market only quality A and B grade property is highly desirable. It’s important to keep this in mind when you’re looking to buy. My advice to my clients is that it’s always better to pay fair money to secure a well located, quality home or investment property rather than buying a property that, well...simply just isn't.
