Viewing by month: June 2013

The inside scoop on how to devise the perfect property investment strategy

The latest housing finance figures from the Australian Bureau of Statistics show that the value of investment home loans rose by a seasonally adjusted 1.1 per cent to $81.4 billion in April 2013 – suggesting that investor confidence may be rebounding in the property market. And with interest rates currently at 53-year lows, an increasing number of investors may be seriously considering their next property purchase. For investors looking to do so, it will be important to have a smart and effective investment strategy. To this end, I’ve decided to share the following article by Empire CEO Chris Gray, which appeared in the May 2013 edition of CENTURY 21 Wentworth’s Property Investor. 

Top ten tips for investing in residential property

Whether for my own portfolio or for clients, I have been searching for, negotiating on and renovating investment properties for almost two decades. Over this period, I have identified a number of rules that I follow to ensure that I get the best returns from any investment. 

Whether you are looking to purchase an investment property or add to your portfolio, these tips can help you to make an informed decision: 

1.CHOOSE PROPERTY THAT WILL GROW IN VALUE 

Well located properties close to the CBD, beaches, schools, public transport and leisure facilities are more likely to grow in value in a good market and to hold their value in a down market.

2. CHOOSE PROPERTY THAT'S ATTRACTIVE TO TENANTS 

The property should be clean, have good-sized bedrooms, off-street parking and good positioning away from noise and main roads. You will attract tenants by selecting a property that suits the needs of the majority of residents in the area, and a tenanted property means a reliable income stream.

3. BUY BLUE CHIP 

Cheap properties are cheap for a reason - there is little demand and plenty of supply. Generally, it's worth paying market value for a good property in a top suburb rather than paying less for a property that nobody really wants.

4. CREATE INSTANT EQUITY WITH RENOVATIONS 

Quick, low-cost renovations such as a paint job, recarpeting, tidying the garden, painting the fence, installing new curtains or blinds, and replacing kitchen cupboard doors, can have a significant impact on the value of your home. For every dollar you spend on renovating, you should aim to get at least one to two dollars back in the value of your property.

5. REFINANCE YOUR PROPERTY TO CREATE A BUFFER 

When your property grows in value, refinance to create an emergency 'buffer' zone. This will ensure that you can continue to make mortgage repayments even if you lose your job. Don't find yourself in a forced-sale position as you won't get the best price and it may trigger capital gains taxes as well as other expenses.

6. RE-SIGN YOUR TENANTS 

Hire a professional property manager to ensure that you get reliable tenants who pay a good market rent. Consider tying your existing tenant down to a new twelve-month agreement. This will help to guarantee your rental income.

7. GET AN INDEPENDENT VALUATION BEFORE YOU BUY 

Many buyers get emotionally involved when buying property and often pay more than the property is worth. By investing a few hundred dollars in an independent valuation, you can almost guarantee that you will never overpay.

8. YOU DON'T HAVE TO SELL TO PROFIT 

Many investors believe that they need to sell in order to realise capital growth that they've gained in a property, but this process incurs selling costs, taxes and often re-buying costs. Refinancing, on the other hand, allows you to access the profits, while still keeping the appreciating asset. It works similar to a reverse mortgage.

9. IT'S ALL ABOUT TIME IN THE MARKET 

Many people try to wait until the market is at a low before buying. Long-term investors know that timing the market is for speculators, not investors. If you can afford to buy and hold on to your asset, now is always the right time to buy.

Most importantly: 

10. BUILD A TEAM OF PROFESSIONAL ADVISORS 

You've got to spend money to make money, so rather than trying to find the cheapest advisors, choose the ones that give you the best advice. Spending a bit more money upfront can make a difference of tens of thousands of dollars in the long-term. To start with, every investor needs a good accountant, mortgage broker, financial advisor, valuer, building inspector and buyers' agent.

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert and clear advice. Additionally, if you would like to speak to a mortgage professional about suitable loan packages, please contact CENTURY 21 Home Loans.


0 comments | Posted by Charles Tarbey on 21/06/2013 at 12:00 AM | Categories:

Rising consumer sentiment a positive sign for the housing market

 

CENTURY 21 believes that the recent upward shift in housing market sentiment, as seen in RP Data-Nine Rewards’ Consumer Housing Market Sentiment Survey, is a positive sign for the national housing market.

 

The May 2013 survey showed that 80 per cent of respondents believe that now is a good time to buy a home and 41 per cent expected dwelling values to rise over the next six months. Both measures represent a considerable improvement in the views of consumers from the October 2012 survey.

 

“It is not surprising that housing market sentiment has increased when one considers the lending environment and steady house price growth that we saw over the first quarter of this year,” said Chairman and Owner of Century 21 Australasia, Charles Tarbey.

 

“Capital city dwelling values rose 2.9 per cent in the year to May 2013, auction clearance rates are currently robust in Sydney and Melbourne, and interest rates are at 53-year lows.

 

“These factors, in combination, have likely had a positive impact on consumer sentiment and should further encourage new buyer activity and inquiry over the coming months.”

 

The RP Data-Nine Rewards’ statistics preceded housing finance figures from the Australian Bureau of Statistics, which showed that the number of home loan approvals increased by a seasonally-adjusted 0.8 per cent in April, with the number of new home loans approved rising 3.5 per cent to a three-and-a-half year high.

 

“While it appears that many people are still preferring to pay down debt rather than take on additional loans, the recently reported increases in housing finance – particularly for investors and new homes – strengthens the view that consumer confidence may be returning to the property market,” concluded Charles Tarbey.

 

For more information about the residential property market in your areas of interest, please feel free to stop by your local CENTURY 21 Real Estate office for expert and clear advice. Additionally, if you would like to speak to a mortgage professional about suitable loan packages, please contact CENTURY 21 Home Loans.


0 comments | Posted by Charles Tarbey on 20/06/2013 at 12:00 AM | Categories:

New home sales up over April

Recently released figures from the Housing Industry Association (HIA) suggest that the trend of recovery in new home sales seen since late 2012 has continued into 2013. 

The latest HIA New Home Sales report shows that seasonally adjusted sales for new homes increased by 3.9 per cent in April 2013. This took monthly sales back to a level not seen in over a year. The headline result was driven by a 6.7 per cent increase in detached house sales, which was experienced across all states surveyed except for Queensland. In contrast, multi-unit sales fell by 9.4 per cent. 

HIA senior economist, Shane Garrett, said that recent developments in new home sales are an encouraging sign for the market.  

“In particular, the important detached house segment of the market continues to climb out of recent record lows, and this improvement has largely been broad-based across the states,” explained Mr Garrett.

“While multi-unit sales have softened over recent months, the gains made over the course of 2012 have not been eroded. A broader look at the situation shows that the volume of sales in the three months to April this year [was] still 51.7 [per cent] higher than the trough experienced a year earlier. 

“We do, however, need to be considering the longer term prospects of a recovery in residential construction beyond 2013,” concluded Mr Garrett. 

In the month of April 2013 detached house sales increased by 9.1 per cent in Victoria, 9.0 per cent in Western Australia, 8.1 per cent in New South Wales, and 2.7 per cent in South Australia. Detached house sales fell by 1.8 per cent in Queensland.

 


1 comments | Posted by Charles Tarbey on 12/06/2013 at 12:00 AM | Categories:

Rate hold may boost property market

CENTURY 21 believes that the decision by the Reserve Bank of Australia (RBA) to hold interest rates at 2.75 per cent will encourage many people to purchase or refinance property as rates remain at historic lows. 

“CENTURY 21 believes that the RBA’s decision to keep interest rates on hold is prudent in light of current domestic economic conditions,” said Chairman and Owner of CENTURY 21 Australasia, Charles Tarbey.

“With interest rates set to remain at historic lows for the time being, Australia’s lending environment should encourage many people to buy or refinance property over the coming months.

“However, whether there will be further rate cuts in 2013 is difficult to predict due to the recent momentum in U.S equities markets and a period of relative stability in Europe.”

As part of its decision, the Reserve Bank reasoned that it was appropriate to leave the cash rate unchanged as current financial conditions would contribute to a strengthening of growth over time, consistent with achieving the inflation target. 

The Reserve Bank’s decision follows the recent release of RP Data-Rismark’s Hedonic Home Value Index results, which showed that median home values In Australia’s capital cities fell 1.2 per cent in May. 

“Despite declines in house prices in May, Australia’s residential property market has undergone some relatively positive developments in 2013, with capital city dwelling values rising 1.1 per cent over the first five months of the year and auction clearance rates moving above 70 per cent in many areas across the nation,” concluded Charles Tarbey. 

CENTURY 21 encourages prospective buyers that are looking to purchase real estate to ensure they have obtained the appropriate professional property and finance advice before doing so.  


0 comments | Posted by Charles Tarbey on 11/06/2013 at 12:00 AM | Categories: