Property Investing in The 21st Century

Property Prices

When you’re investing in property, it’s very important to know whether its price is going to go up or down in the foreseeable future. This much is clear. Yet, what if you’re no real estate expert? What if you’re simply an investor wanting to put money in something that has a very high chance of going up in value? You know that real estate tends to go up in value, but the question of, “By how much” depends on the individual neighbourhood, and on the individual property.

How do you ascertain how likely an individual piece of property is going to go up in value? Do you visit the neighbourhood and rely on your own, inexpert subjective opinion? What if the property you’re buying is in another country?

Property Gurus Inform You of Property Values

When trying to get a sense of a property’s value, don’t ask the owner; don’t ask your lender; instead, ask a property investment specialist such as an estate agent that deals with properties in that neighbourhood. Better yet, ask several agents working in that same neighbourhood.

This is not hyperbole: real estate agents have been known to determine the fates of entire neighbourhoods. The real estate agents, not lenders, or property owners, are the ones telling home buyers what to believe about homes and neighbourhoods. They are the ones to whom the writers of newspaper “real estate” sections turn, when researching new articles.

In short, if most of the real estate agents working in the same neighbourhood agree that the value of a given property in that neighbourhood is likely to go up, it will almost certainly go up. If they say that neighbourhood or property is doomed, don’t expect a good return on your investment.

Get A Property Investment Mentor

And, talk to other property investors who are having success. Someone who’s a property investment success such as Jamie McIntyre could provide you with a wealth of information and mentoring.

Invest In Waterfront Property

If you’re investing in property, you’re probably on the lookout for the next hot area so that you can buy now for cheap and flip it for a big profit later. You already know that the best type of property to buy is one that will bring you a profit and if you want to make big profits, you should seriously consider buying waterfront property.

Why are waterfront property investments sizzling hot?

For the most part, no more water front property is being made. Unless there are new man-made lakes going in somewhere, there are a limited number of waterfront homes and land parcels available so it stands to reason that the property investment will be a good one, eventually. You might need to bide your time a little but those scenarios tend to be the most profitable because the costs are low now which may even mean you can buy multiple pieces or buy a large piece of land that can be severed later on.

People love waterfront cottages or vacation homes and developers are regularly buying large areas up and making communities out of them. As areas outside of major cities get populated for vacationers, new area pricing starts to climb. If you can buy a piece of lakefront property in an underdeveloped area that’s not too far from a HOT area, you could be laughing all the way to the bank in a few years. Maybe it’s time you seriously thought to invest in a waterfront property.

Great Investment Property

Once you start investing in property it can become addictive. It can make you a lot of money and leave you feeling very secure about your financial future. It is almost like opening a bag of potato chips and trying to eat just one. Or, like playing the game Monopoly which can be addictive as you watch your portfolio and the pile of money in your possession both increase.

You might start off with one piece of property and once it’s either paid off, flipped, or generating income for you, you might get ready to purchase another. Some property investors buy up property in one area and others diversify and buy rental properties, vacation properties, commercial properties and purchase land as well.

How do you find great properties to invest in?

Here is some help:

1. Subscribe to mailing lists. There are a lot of them out there and you can subscribe to blogs or to information about specific areas and specific types of property or about learning about investing in general. Subscribe to this blog here.

2.Google alerts. If you have a Google account, you can create an alert that will send you an email based on particular phrases turning up in search engine results so you can, in effect, scope the search engine for new property listings.

3.Find a guru. Find property investment gurus / mentors so that you can follow their advice. Some may have blogs or mailing lists that you can subscribe to.

Vacation Property Investing

If you’re thinking about investing in property in another country, that could be a very wise decision. Investing in a hot vacation property could be a really smart move with very favourable results.

Profit Margins in Overseas Properties

If you’re thinking about investing in a hot tourist area and you have great timing, you could get in for cheap but with a high ROI. Some areas are still really reasonably priced for buyers while being really profitable from a tourism perspective and many successful investors are finding themselves with a properties that make three or four times the mortgage payment in profits each and every month. This can enable you to pay the property off quickly. You might decide to flip it for a profit in the near future or keep it and have it pay for itself and pay you dividends on a monthly basis. There are a lot of property management firms around that will manage the day to day management of the property locally for you so it can become quite lucrative passive income for you.

There’s a second great reason for investment in property overseas and that’s self-indulgence! Who wouldn’t want a nice place to holiday on a regular basis? If the vacation property is doing really well and is in a hot spot you can book it for yourself and your family for a week or two a year and get use out of it yourself!

Before investing in overseas property, especially as a vacation rental you’ll want to learn about:

-how the local economy is doing

-how healthy the tourism for that area is

-how much the going rate for rentals is

-what resources are available locally for you

-what do the local laws entail regarding overseas investors in terms of taxes, etc?

At times you can buy a great property that doesn’t even need much renovating to make it ready to become an income generating machine. Do your due diligence before taking the plunge! The good news is that there are a lot of resources that can help you make wise financial decisions that could be extremely lucrative for you.

Creating Wealth With Your Home

In our last post, we looked at how you could release equity in your home or Investment Property, and put that equity to good use, especially in regards to purchasing more investment real estate. Today, we will look at how much equity you might want to use to build your portfolio. This advice is just my own personal opinion, and when you go to use your own equity, then please consult your own financial adviser.

The last ten years or even longer, saw great surges in the average property price in Australia and New Zealand. While it has slowed down for now, the average growth of around 8% still applies. You might not get it this year or even next, yet it will all even out in the long term, and that is what we want. In saying this, it is important not to over extend your equity, or you may find yourself in the position of negative equity.

You must only use enough of your line of credit as to get in to the deal, and that means use as little as you possibly can. If you only have a couple of properties, this usually poses no issue and you can purchase another property with a 10% deposit. If you have quite a real estate portfolio though, you will probable be forced to pay a 20% deposit to secure more property.

When you start to build a investment property portfolio, it pays to use a service that help you find the best deal, such as a Mortgage Broker who specializes in multiple properties. These Brokers are usually free to use, as they will get their fee from the lending institution instead for bringing them new business.

At the end of the day, you have to be able to service the debt, so you must do your calculations as thorough as you can from the moment you begin to look at a new deal. Do not leverage yourself more than you can afford, and you should do just nicely.

Using your home equity is a fantastic way in which to create wealth, and it needs to be given the respect that is deserves. Use your line of credit wisely, and before long you will have amassed several investment properties, and from the there the sky is the limit.

Are You Ready For Real Estate?

It’s a question that you have to ask yourself right now, as the time has come to start adding to your investment property portfolio. The local (Australian) Real Estate Market has copped a hiding lately, and that is great news if you are a smart investor.

Look at it this way, many suburbs have experienced growth of between 15-25% for many years now, and all we are seeing is prices falling back in line with long moving averages to where they should be right now. It’s not so much as properties are going down in value, yet rather their growth is flat while the moving average catches up.

Interest rates are coming down, and coming down quickly. Rents are continuing to go up still. What this means is that there are a lot of great quality properties coming on the market right now where if you do your homework, you could have a neutrally geared property. Your rents received could cover your interest only mortgage repayments, or at least come very close.

Saying this, you still have to find the right properties, and in the right areas. Not all investment property is created equal, and having  financial knowledge and foresight is very important. Much of the  Real Estate on the market right now, is not a suitable investment, especially those in the mortgage belts and in rural areas.

This is a great time to become financially educated and learn as much about Property Investing as you can. The 21st Century Academy Homestudy was the one that taught me what to do, and what not to do. The buying opportunities right now offer massive potential to build real wealth in the future.

How Do You Go About Purchasing A Foreclosed Property?

In today’s post we will have a look at a strategy that many people are interested in as it allows them to purchase an investment property at a price that may be well under the properties true value.

A foreclosed property is usually one where the owner has been unable to keep up with the repayments for whatever reason, and after a certain point the lending institution takes legal action and takes possession of the real estate in question. The bank or lender can then put the property on the market to recover any costs still outstanding from the original mortgage.

It is important to remember that if you do want to buy Real Estate that has been foreclosed, then it is advisable to let you property team know your intentions. Your solicitor will be able to run their eye over the finer details, and ensure the property is free from any other creditors or encumbrances.

Finding foreclosed properties that are for sale can be a difficult undertaking in Australia, as they are not blatantly advertised as they are in the US for example. This is where it really helps to have some excellent contacts in the Property Investment world.  Having contacts at a Real Estate Agency is a massive bonus here, as they can get access to properties that are being sold. Having contacts in Banking circles is another way to get some quality information to help you on your way.

When a property does come on the market due to foreclosure, the Bank or lending institution is usually only interested in getting anything owed, plus some administration costs. Usually, they are very strict on the minimum price and will not budge below their reserve. If the property is worth it though, there is no point trying to get it at a further discount as you would have already got instant equity in the property if the deal was already undervalued.

Purchasing foreclosed property is somewhat of a specialized subject, and today I have only touched on it a little. There are plenty of excellent resources available on the subject if it is something that you are interested in, including on the free DVD from The 21st Century Academy.

Investing In Australian Residential Property

Today we are going to look at Investing in residential property in Australia, and how that it is one of the most lucrative methods to generate long term wealth. Just have a look at the BRW Top 200 Rich List and you will see just how many of those people built their massive fortunes using residential property.

Residential Property is such a great investment as it a realistic to most of Australia’s population. It is possible for nearly everyone with a full time job and a deposit to get an entry in to this wonderful investment vehicle. You might not be able to purchase your dream property due to not being able to get a great deal of finance, however you will be able to purchase something that will still make capital growth.

Historically, residential property in Australia has appreciated at between 7-12% on average for over 100 years now. Throughout the same time, many media institutions and experts have openly suggested that there is no way property prices can go up any more as it is just not sustainable. History also suggests that all these opinions and reports have been incorrect so far.

Right now in just about every paper that you read, there is doom and gloom over the falling price of residential real estate within Australia. It is true that property prices have been coming down, a couple of percent. A couple of percent is not a big deal, and now offers the smart investor a fantastic opportunity to purchase property that they might not have been able to secure this time last year.

The property markets are changing, however buying real estate in areas that have fantastic infrastructure and a growing populace is still a very smart business decision. It is supply and demand in its most simple form. There are more and more people relocating to the major cities everyday, and these people need somewhere to live.

In my own view, I really think that this and the upcoming economic downturn is an excellent opportunity to add to your property portfolio.

Where Are The Best Places To Purchase Property

Today we will look at what areas you could look at when you are considering purchasing an investment property. As smart property investors, we want to look at areas that will not only appreciate over time, but also remain strong in times of economic downturn or if there is ever an over supply of property.

We will concentrate on the Australian property market, which is where the majority of the readers are based. Historically, over the last 150 years, the majority of property prices have risen at an average of around 8% per year. Some have done much better, and some have done much worse. Still, at the end of the day, if you have owned property in Australia at all and held it for even a few years, then you would have made some considerable returns,

So what are the best areas and suburbs to purchase property? This changes all the time, however there are some great guidelines that I can give you that will put you in the top 1% of successful residential property investors.

• Purchase within 12km’s of a state capital city
• Try to purchase a house or villa as opposed to a unit
• If you must buy a unit or flat, ensure there are not more than 20 in the complex
• Do not purchase on a main road, although one o two streets back is great
• Choose suburbs that border the more affluent suburbs
• Choose a location near (not too near) schools, parks and shops
• look for areas that are undergoing gentrification

The guidelines that I have put above are some simple, yet excellent real estate tips that will without  doubt give you a great head start when you enter the property market. Many peolple ry to overcomplicate property investing, or are more interested in nice new houses out in the mortgage belt. A boring small house in the inner suburbs will always outperform those in e outer suburbs, 25km away from the CBD. It is the land that is appreciating in value, and it matters little the dwelling erected on it.

Property Investing For Beginners Part 2

In the last post, we looked at a couple of thing a beginner in the property market should be aware of before they purchase their first investment property. Today, we will look at investment finance, and some of the things you should be aware of.

Investment Property Finance

It is a good idea before you go out in to the property market, that you have actually organised finance, or at the least, see how much finance you can access. This will of course determine what and where you will be investing, to a large degree.

If you are using equity from your own home, or another investment property, then you may want to lend with someone other than the Bank who holds the first mortgage. This makes it a lot easier to get finance, and when you have several investment properties, your lender may make things very difficult for you if you try to obtain more finance.

It pays to look at as many products from lenders as possible and to compare them so you end up with the package that is best suited to your own needs. If you use the services of a reputable mortgage broker, then they will work with you to find the best deal. On the same note, be wary of mortgage brokers who are quite keen to push you only one or two financial options, as the commissions that they receive from these institutions may be their driving force. Ask to see the mortgage brokers fee disclosure schedule, so you can see exactly what they will earn from the lender you end up going with.

Once you have found a good mortgage broker, it would be wise to stick with them, as a good firm will help you grow your property portfolio over the years.

Once you have finance arranged, this will add a lot of weight when you do go to put an offer in. A vendor who wants to sell will quite often take a lot lower price, if they see that you are a genuine property buyer, and not a time waster.

That concludes today’s post. Next time we will continue the series, and look at further tips on property investing for beginners.