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Learn From The Habits Of Successful Property Investors

Learn From The Habits Of Successful Property Investors


The fact that property is an unpredictable market to invest in is nothing new. How then do property investors take calculated risks that yield success? Is it all just a guessing game? While there are formulae to calculate a possible outcome at any given moment, property investment projections are far more complicated than that. There are so many elements to factor in when weighing the implications of an investment that there usually isn’t a single, universally correct answer. We’ve compiled a few distinct behaviours exhibited by successful property investors to guide you in the right direction.

1. Honesty Is The Best Policy With Tenants

As a property investor, you’ll probably need to attract tenants and maintain a healthy business relationship with them. How do you do this? Property investment isn’t a highly regulated industry, but you could opt to always be honest instead of taking advantage of this. It will help you develop a positive reputation, marketing you as a trustworthy landlord to future tenants.

2. Always Find The Best Possible Loan Deal

When sourcing a property loan, it’s imperative that you make comparisons first. Don’t just jump in on the first deal you’re offered. There’s always someone willing to offer a better deal. Loan amount and interest aren’t the only important factors – check for benefits and added extras as well.

3. Pay Attention To Who’s In The Area

Before you decide on an area to invest in, do a little research on the businesses that the area attracts. Large fast food and supermarket franchises only set up shop where they believe they’ll have a steady stream of local customers. What does this mean for you? A revolving door of potential tenants, that’s what.

4. Plan Ahead – Use Your Head And Not Your Heart

The most important habit of successful property investors is planning in advance and in detail. With an investment as huge as property, you can’t afford to act on a hunch. You need to punch in the numbers, allocate funds and make provisions should the market move in an unanticipated direction. This helps mitigate your risk effectively, protecting your pocket in the long run.

If you’re keen on learning how to apply these habits or anything else related to making a property investment, contact Aussie Property Guru to chat to an expert today.

Property Market Outlook 2015

Property Market Outlook 2015

It’s this time of year when all the reviews for the year just passed and the year to come make their annual appearances. I won’t dwell on 2014 as we now all know what has happened, but instead lets’ have a look at what 2015 may bring us as global political and economic factors can play an important role in the performance of asset prices in the future. A recent CoreLogic-RP Data report has addressed many of these issues but details far too much historical data and focusses only on domestic issues.

The recent fall in commodity prices, but particularly in the oil price and the prospect of significantly lower oil prices for the near to medium term may have a major impact on global growth over 2015. This could provide a major boost for commodity-importers like India, China (to a lesser extent), the Philippines, Thailand and Indonesia. They are the countries going into next year that are going to continue to do well and are going to have a tailwind of a tax cuts and falling inflation. The losers are Russia, Brazil, Chile, Peru, Nigeria, and the Middle East. If we look at this scenario developing, it should continue to bring further investment in Australian property as this trend has already developed over the last few years and it is mainly from the countries that are likely to experience this positive impact to their domestic economies.

From an Australian viewpoint, pivotal to the property market performance will be the direction of interest rates. There is growing debate that the next rates movement may be down rather than up. A further reduction in the cash rate will bring mortgage rates even lower than their current record low settings. Theoretically, lower rates should provide a boost to housing market conditions, however, if this stimulus does transpire, it is likely to be balanced by pervasively low consumer confidence and softer labour markets.

For the RBA, ongoing delay in the non-mining investment recovery will potentially cause some concerns. Whilst residential approvals declined early this quarter, the fall is not yet concerning from a central bank perspective. The level of approvals remains elevated, and continues to suggest solid increases in housing supply. I think the balance of risks for monetary policy lies with the non-residential sector. The longer the economy’s growth rotation remains elusive the closer the RBA will be towards being pushed into an easing bias.

Additionally, the impact of the recent APRA announcement around investment lending may act to restrict the availability of finance to investors. The banking sector will be under scrutiny to keep growth in investor loans at slower than 10% pace of growth which is likely to have some downwards pressure on investor related housing demand. I do not foresee this as a negative as it will help to keep a better overall balance in demand, if indeed we see anything actually come to pass.

Sydney and Melbourne have been the standouts for capital gains over the current growth phase, however the level of growth compared with last year is now lower as some heat leaves these markets. Just three of Australia’s capital cities are expected to experience higher capital growth in 2015 than they have this year.
CoreLogic RP Data head of research Tim Lawless forecast that only Brisbane, Adelaide and Hobart would improve, with Brisbane the standout.

“We are expecting the annual rate of capital gain to finish the year around 7.0 per cent, compared with 5.1 per cent over the 2013 calendar year,” Mr Lawless said.
“With the rate of capital gain holding relatively firm over the second half of 2014, fewer affordability pressures and better rental yields than Sydney or Melbourne, we are expecting growth in Brisbane dwelling values to outperform the capital city average.”

Overall I am expecting another solid year of housing market conditions and further capital gains, albeit at a more sustainable rate that what we have seen over 2014.

I would like to wish everyone a very Happy and Prosperous New Year!

As always, I hope you find this interesting reading and that it helps you make better informed decisions.

Best Regards,

Dr Andrew Unterweger MB BS, CFP®, Dip FP, Dip FNS, MFAA, AFA, SPAA, REA

RATES FORECAST TO FALL TO 2PC

By Smart Property Investor Staff Reporter

Friday, 06 February 2015

Two prominent economists have praised the Reserve Bank of Australia’s decision to reduce the cash rate and have predicted at least one more cut to come.

Domain Group senior economist Andrew Wilson said the Reserve Bank had made the right decision to reduce the cash rate from 2.5 per cent to 2.25 per cent.

Dr Wilson also said that another cut is likely, given that the economy received minimal stimulus from the succession of rate cuts between October 2011 and August 2013.

 

“We haven’t had much action from cutting from 4.75 per cent to 2.5 per cent, so I’m not sure what a 0.25 per cent improvement is going to do,” he told Smart Property Investment's sister publication Real Estate Business.

“Certainly the Reserve Bank had to act – it’s really the only tool in the box that we’ve got left.”

read more...

Pricing gaps across product types and capital cities are widening

by Cameron Kusher

30 January 2015

The cost of Sydney housing relative to other capital cities is widening and the cost of buying a house as opposed to a unit is increasing as a record number of units commence construction.

The cost of Sydney housing relative to other capital cities is widening and the cost of buying a house as opposed to a unit is increasing as a record number of units commence construction.

According to median selling prices over the three months to December 2014 published in the CoreLogic RP Data Home Value Index report, the gap between capital city house and unit prices has never been greater. As at December 2014, the capital city median house price was almost 20% higher than the capital city median house price. In dollar value terms, median house prices are $100,000 greater than unit prices. read more...

 

John McGrath ignites Sydney's "hot forever" inner ring debate

by Jonathan Chancellor

1 FEBRUARY 2015

John McGrath has always been passionate about the property prospects of Sydney’s inner ring suburbs. But last week he went a little further, saying suburbs close to the city are becoming so desirable that they will be “hot forever”

But last week he went a little further saying suburbs close to the city are becoming so desirable that they will be "hot forever".

The high profile agent stopped short of declaring inner city property prices were immune from price falls.

But the chief executive of McGrath Estate Agents told Fairfax Media these areas would always be attractive to buyers.

"There is just no end of demand from overseas and local buyers who want to live in those precincts," McGrath said.

read more..

 

 

 

 

Sydney property bubble to pop when rates rise, says HSBC

Wednesday, 11 Feb 2015   |

James Mitchell

0

·

·        A fresh round of cheap credit is further inflating Sydney’s investor-driven property prices.

In a research note released yesterday, HSBC economists Paul Bloxham and Daniel Smith predict strong national housing price growth to continue at seven to eight per cent, driven by record-low mortgage rates.

“We see Sydney prices rising by 9 to 10 per cent in 2015 and expect that, when rates do eventually rise, there is now a high risk that Sydney will see price falls,” the economists said.

“Although we do not see a national housing bubble, we believe that growth in Sydney housing prices is currently running at an unsustainable pace and that any further growth is likely to be met by housing price declines in future years, when interest rates do begin to rise,” they said.

A signal of the growing risk of overinflation in the Sydney market is the high level of investor demand, according to HSBC.

Read more…

https://www.mortgagebusiness.com.au/breaking-news/8152-sydney-property-bubble-to-pop-when-rates-rise-says-hsbc

 

 

 

 

 

JESSIE RICHARDSON | 10 FEBRUARY 2015

Melbourne growth to stand out in 2016: HSBC's Paul Bloxham

Melbourne will see the highest price growth of any capital city next year, HSBC has forecast.

In the latest HSBC Australia Downunder Digest report, HSBC Australia chief economist Paul Bloxham forecasts 4% to 8% price growth in Melbourne for 2016, after 7% to 8% growth in 2015.

Bloxham expects that in 2015, Melbourne and Sydney will "continue to outpace the rest of the nation", noting that from its mid-2012 trough, Melbourne's housing prices have increased by 20%. Read more

http://www.propertyobserver.com.au/finding/residential-investment/40049-melbourne-growth-to-stand-out-in-2016-paul-bloxham.html

 

Commonwealth Bank posts 8pc half-year profit rise to $4.5b

By business reporter Michael Janda

Updated 11 Feb 2015, 5:49am

 

PHOTO: The Commonwealth Bank has posted its half-year results. (ABC News: Nic MacBean, file photo)

The Commonwealth Bank has reported an 8 per cent rise in half-year profit to $4.54 billion.

The bank's preferred cash measure of net profit, which adjusts for some accounting items, also rose 8 per cent to $4.62 billion.

CBA said its improved profit came on the back of a 5 per cent increase in revenue, despite subdued conditions in the lending market.

It also said it had lowered its cost to income ratio by 70 basis points to 42.2 per cent, as productivity initiatives continued to contain business expenses.

Read more…

 

http://www.abc.net.au/news/2015-02-11/cba-half-year-profit-result/6084926

 

 

 

 

 

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