Property Investment Tips
With falling property price and interest rate cuts recently, this could be a good opportunity for investors to get in the market. Below are some tips:
WELL PREPARED DOCUMENTS
Bank accessors are now extremely thorough when it comes to finance to ensure your documents support your lending capacity. Luxe shopping at Collins St or too many Uber Eats transactions will increase your accounted living expenses.
BROADEN YOUR MARKET RESEARCH
Investors sometimes need to get out of their comfort zone and try not to limit their portfolio in the local market. Good investment opportunities reward people who are willing to broaden their research.
You should have a good look at what is driving the current market and what would change in the future such as over-supply, high vacancy rates and falling property prices.
KNOWING YOUR TENANTS
It’s important to assess the area where you want to buy. Tenants with families will usually look into the good school zone areas, where as young professional couples will look at public transport, commute timing, infrastructure etc.…
DETERMINE YOUR INVESTMENT STRATEGIES
You need to weigh up your investment strategies: High rental yield or good capital gains? Properties with high rental return usually have lower capital gains and vice versa.
Investors with multiple investment properties would usually diversify their investment portfolio to ease their cash flow. They might get positive cash flow investing in an inner-city apartment and negative cash flow investing in a house in the right school zone which however would give them a better return when it’s time to sell.
BE FINANCIALLY PREPARED
Reverse bank’s interest rate cuts could put hundreds of dollars to investor’s pocket, ease their cash flow and increase their borrowing power. However, you should be financially prepared for risks such as interest rate increase, long term vacancy or change in your employment condition.