The top 10 Property Investment Commandments
Did you know that investing in property can be one of the most effective tools for building wealth and achieving your lifestyle goals? inSynergy is a property investment advisory specialising in empowering investors with the knowledge, tools and strategy to make safer, more profitable decisions.
Property investment advisor Richard Sheppard teaches you the best strategies for success in the property market.
Stop procrastinating and prioritise yourself Most people very much underestimate their capacity for investment and are usually missing out on $100,000 plus of capital growth pa. Those who enter the property market are often surprised at how simple it is if they seek out experienced advisors to guide them.
Seek education Becoming financially educated is crucial if you want to maximise opportunities with property investment. A reputable and personalised property investment workshop with an industry professional can teach you a lot in 4-6 hours.
Take advantage of your lazy equity
A failure to take advantage of existing property equity is a big loss in opportunity. You usually only need about 25% equity in a current home (or approx. $70,000 savings) to get started safely in property investment. Each $70,000 of cash or spare equity could allow you to invest in a $500,000 property and if it grows by 5 – 10%, that equates to $25,000 to $50,000 pa growth you could be making.
Seek better property valuations Valuations between lenders commonly vary by 5% to 20%. Therefore, your investment prospects can radically be affected. Use a good investment finance broker to manage the valuation process and you may be able to source $50,000 - $100,000 in additional value.
Take out sufficient income protection insurance Property investment presents risks – suppose you lose your income and have to sell a property prematurely. Income protection insurance provides a safety net.
Keep a cash buffer Having cash flow in reserve can help investors through downtimes in the property cycle or if unexpected expenses arise. Rather than using your full borrowing capacity to purchase a property, keep a buffer.
Seek out credible research Good research is the key to identifying growth markets around the country. Just because the Sydney market is starting to slow doesn’t mean the opportunity is lost as while Sydney slows, other markets start to grow.
Avoid the land tax curse Land tax is state based, and most states have a land tax threshold. The simple way to avoid it is to buy your next investment property in a different state.
Get an interest-only loan When selecting a property investment loan, opt for interest only with an offset account rather than a principal and interest loan. The first scenario enables you to free up cash for other investments and minimises costs if interest rates rise.
Avoid the risks of buying ‘long term’ off-the-plan Invest in complete or short term off the plan property. Long term off-the-plan property is generally a property that takes longer than six months to build. The problem with this is you cannot gain formal finance approval until close to the completion and settlement of the property. This means there is no guarantee your finance will be approved and if you cannot settle, you can lose far more than the 10% deposit.
inSynergy’s one-on-one property investment strategy and planning workshops, ongoing advice and support will teach you how to safely build a high-performance property portfolio to help fund your children’s education, your future retirement and much more.
Book in over the summer holidays to get a jump start on your financial and lifestyle goals for the New Year.
Invest in your future and visit inSynergy.net.au for more information, or to arrange a time to chat.