Do you Want to Become a Property Tycoon?

So do you want to be a property tycoon, with millions of dollars worth of property under your belt? Silly question really, of course you do, we all do. But what are the fundamentals that these property magnates use, to expand their portfolios and wallets?

Now, I'm not expert in investing, my forte is in looking after your properties! I know however, that it takes a lot of commitment to learn real estate.You need to study the ins and outs like you would learn any other trade. So to evaluate the best potential  investment properties, you need to know your trade!

Knowing your trade, you need to know the fundamentals, and those are a lot of questions you need to ask of your potential investment property. To find the 'best of the best' start by asking the following questions: 

Property Investing in the Melbourne Market

I wrote this a couple of years ago, but updated this article to reflect the current times. Investing in Melbourne property always has been and always will be a great idea, here's why.

Melbourne always ranks highly as one of the world’s most livable cities. Combine that with the cafe culture, restaurants, arts and night-life, it's no surprise that there is strong population growth here. Vacancy rates may be up and down (currently close to 3%), but if you purchase the right property, you can pretty much be assured of good rental yields and good growth. 

Here are the important factors to consider when buying a Melbourne house and land package for investment purposes in Victoria.  

LOCATION

Houses are generally rented by couples, families and 'empty nesters' seeking properties close to schools, universities, parks, cafes, restaurants and public transport. Traditionally, new house and land developments are located in areas that have a high rental demand.

It is important to investigate your desired Victoria location and check the:

(Re)Financing: Tips for Property Investors

When you are buying property you need money to finance the investment. Here are some things to consider if you are either refinancing your property or trying to find funds to purchase an investment property.

1 - Shop around.  Don't just go with what you know. If you already have a lender, don't assume that they will give you the best deal. Things change all the time, smaller banks and lenders often have more flexibility compared to the big-box banks.

2 - Lower rates aren't always going to give you the most savings. Make sure you look at the fine print and find out if there are any hidden fees.

3 - Don't wait out the RBA. Rates may or may not drop, if you see an investment property on the horizon, get the financing sorted out pronto. In fact, you should really have that sorted before you start looking.

4 - Get it in writing. Has your broker given you a rate? Get it locked in, in writing.

5 - How good are you at maths? Getting a cut in you interest rate by about 1% can save you about $100 per month.

6 - Going against what I said in number 2 - if you have a lender and are refinancing, be careful when you switch. There will be fees up the wazoo - establishment fees, legal, ongoing, stamp duty…. make sure switching to a new lender adds up the right way.

7 - How's your credit? Just because you think you have good credit doesn't mean it's all good. Make sure you get someone to check your rating to ensure you can get the best deal. The stronger your rating, the better - obviously.

8 - Don't fall for the honeymoon. You can get a low rate at the start, but what happens when it changes? How will that position your loan in the long run - and monthly payments?

9 - If you refinance, don't use the money to pay off debt, unless you are changing your spending habits. You could create the never-ending nightmare.  

10 - Your down payment. The bigger the better.  If you are financing from scratch make sure you have a good 20% chunk in most cases (not all). If you can swing a 25% down payment, then you may qualify for an even better interest rate.

Bonus tips:

Here are some other places you may look for cash. You may or may not be successful with these options and of course, get input from people who know their dollars and cents!

• Home equity lines of credit, 
• Credit cards
• Life insurance policies
• Owner financing
• Peer-to-peer loans
• Maybe you could start a Crowd source campaign - who knows if it's possible?

So what is the most creative way that you've manage to cobble together funds to buy an investment property?

NOTE: I am not an expert in financing, these are thought starters. Make sure you get input from someone more knowledgeable than myself.

Make More Money with a Property Manager

You have bought investment properties to make money. But did you know the key to maximising your profit? 

Hire a good property manager!

A study released late last year - The BDRC Jones Donald Australian Private Property Investor Study  provided some very interesting reading. Something for you to consider for your current or future investment properties.


The bottom line: landlords who use a good property manager, are better informed of the return they are getting from their investments, and are 15 per cent more likely to earn positive rental returns.

Selling a Tenanted Property

You have decided to sell a property, but it currently has tenants, how do you handle this in an appropriate way that you can sell the property, but also do not put too much additional stress on your tenants?

If your tenant has signed a fixed lease you cannot make the tenant leave because you have decided to sell. The tenant can remain until the end of the lease, and the new owner will then become the lessor. Be aware of your state's laws when it comes to selling a property within a two month period of the tenant signing the lease. If they were unaware that this was your intention, then the tenant may have the right to end the lease with 2 weeks notice.

Free Property Investing Data

When you are looking to invest in property, you need to do your research. There are a lot of data points that you need to consider before committing to a property. Often you will have the assistance of a investment advisor, but more often than not, you have to start somewhere and do research yourself, but where do you find the information?

Well here are ample Australian based options for you to look at and a lot of them are free! We are not endorsing their information or services, but providing options for you to look at.

Finding the Silent Sales = Investment Properties at a Bargain Price

One investment strategy is to invest in properties that are in high capital growth suburbs which are found around 5-15 kms from major cities.

The problem with this strategy, is that there are a lot of other investors are doing the same thing. So that means a lot of competition for those prime investment properties - i.e. they are not cheap. Plus, the supply of these prime properties is pretty slim. So how do you get to these primo properties before your competition does?

You have to find the 'silent sales'. These are the properties that aren't advertised for sale. The reasons for not advertising are varied. It may be that:

• the vendor doesn't want the public to know (the vendor may have a high profile) 
• for financial reasons (sell before the bank gets it)
• they don't want to pay real estate fees 
• they may not want to put money into the property to smarten it up for sale
• or maybe they want to avoid the stress.

So how do you find these silent sales if the vendors aren't calling a traditional real estate agent to sell the property?

Apartments - Buy the Car Park Too!

There has been a bit of discussion lately about buying apartments as investments and whether you need to buy a car park to go along with it.

Car parks can be big business. A few months ago the New Zealand Herald wrote a report about car parks in Auckland's inner city selling for as much as NZ $100,000.  The pricing of car parks is a reflection of the demand for living in the inner city, and the number of inner city apartments sold.

Finding a Bargain Investment Property

It's not easy to find the great properties you can make money on. It takes effort to find   that below market diamond, that you can make shine. But it is worth it when you do.  Here's some tips on how to find them:

Numbers, Numbers Numbers

Being an investor you have to buy with your calculator and put your heart to bed. Data is where it is at! You have to do a lot of analysis to make sure you are buying the right property. You need to really study the local median sale price - over time. This will give you an idea of where the suburb is likely to go.  Try and glean as much info as possible about: