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Why Location Is Crucial When Buying An Investment Property

The first thing most of us look at when selecting an investment property is its location. If the property itself isn’t quite right, you can always renovate, but it’s not as easy to move a house to a better location. That’s why you should consider the location carefully. Here are some of the most important things to look for.

Love thy neighbour

Before you buy, familiarise yourself with the local community. If possible, visit the neighbourhood during both day and night to get a feel for whether it’s a safe place to live. Are there kids playing outside or security bars on the windows? Are there trampolines in the front yards or the remnants of last night’s party? This will help you determine whether the location is suitable for the type of tenants you want. After all, if you’re looking in an area that attracts university students but you would prefer to rent to a quiet couple, then perhaps this location isn’t right for you.

Future plans

The neighbourhood might look suitable now, but things can change. It’s a good idea to investigate any future plans that could affect the value of your property. For example, the local council should be able to tell you if a freeway or large-scale construction is planned. Major works could increase or decrease your property’s value depending on where they’re situated.

Access to infrastructure

To increase your potential rental income, try to buy near desirable infrastructure and facilities. For example, families often pay a premium to live in the catchment area of a quality public school, so it’s worth checking the educational zoning.

Access to shops, public transport and the beach are also attractive features for both tenants and prospective future buyers. And while it’s handy to be near the airport, if you’re located right under the flight path it might impact the amount of rental income you receive.

Bargain pockets

Finding a bargain pocket in a good suburb could increase your capital growth potential. By looking at demographic data, such as that collected during the Census, you may be able to spot trends. Perhaps the neighbourhood has recently been gentrified by young professional couples who are increasing the average income of the area, which is likely to increase the value of the property over time. Bargain pockets may also be found in close proximity to high-growth areas that will benefit your investment in the long term.

Searching for an investment property can be a rewarding experience. By considering the location, not just the address, you can increase your chance of maximising your rental and capital growth potential. If you need help buying your investment property, contact your mortgage broker.

 

Source: Your Loan Hub

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10 Tips For Choosing An Investment Property

So, you’re thinking of buying your first residential investment property? There are a few things to consider before making the move. Here are our top 10 tips for avoiding potential difficulties and ensuring success.

  1. Know your goal

Understanding your financial objectives is key to finding the right investment property. The actual property itself is rarely the end goal when it comes to investing – the financial elements should be your key focus. First, decide what your investment goal is and then create a plan to achieve it within a realistic time frame.

Are you looking for a plan for retirement? An income-generator to fund your children’s education? Or building equity to gain a regular income? Define a plan and review it regularly as your situation and the market changes.

  1. Research, research, research

Understanding which property is going to work best for your situation is key. It needs to be one that will be of high demand from renters and, possibly, owner-occupiers down the track. Be sure to research which types of properties are in demand and rents quickly in particular areas, and those that don’t. Is this an area popular with families who want three- or four-bedroom homes, or with singles looking for studio apartments? Speak with property managers and check ads to find out what renters are currently looking for, and how their needs may change in the future. What developments are planned nearby? Get to know the neighbourhood you’re planning to invest in.

  1. Old or new?

It’s the age-old debate: should you buy a renovator’s delight or something you can rent straight away? It’s great if it can be rented out as is, but potential to renovate should also be considered. The ability to easily and economically add value to a property is a plus, as it could increase rental returns. Don’t immediately write off a property just because it needs a paint job or the kitchen cabinets need replacing, but at the same time avoid overcapitalising if it’s not going to deliver returns. It’s a balancing act, so consider your skill levels, the extent of makeover required, and your access to funds to pay for renovations.

  1. Location, location, location

Location is critical to performance. Some of the things to consider include:

  • How far is the property from the CBD or business areas?
  • Are there schools nearby?
  • How’s the shopping? Can tenants walk to local shops or will they need to drive?
  • What and where are the public transport options?
  • What other amenities are close by? Are there cafes, a medical centre, a pharmacy, a gym?

  1. Do your sums

Always check your finances before deciding to purchase a property. Get pre-approval and make sure you can cover repayments as well as extra upfront costs such as conveyancing, inspections and taxes. There are also ongoing costs to consider including landlord insurance, strata and property management fees, property maintenance, council rates and utilities.

You need to set yourself a realistic picture of a property’s cash flow, rather than vague idea of whether rent will cover expenses, so use a spreadsheet to calculate all foreseeable expenses. If cash flow is negative, can you afford to maintain the property? What happens if it’s vacant for a couple of months? Do your sums carefully and always ensure you factor in a financial buffer to avoid mortgage stress.

  1. Choose the right setup

When it comes to investing, it’s important to understand how to set up the purchase to receive the most benefit. The entity should be tax-effective and protect any existing assets. You can purchase in your name, through your super or through a trust, but always understand how the purchase will affect you and your family. Expert advice can assist in maximising your benefits.

  1. Pick the right features

You want to appeal to the highest number of tenants, so look for properties that offer that little something extra, like a second bathroom or a lock-up garage. Also, look at properties that appeal to many segments. For example, a lift may appeal to both retirees and a young family, as both will be looking to avoid stairs. Just make sure the benefits outweigh any extra costs.

  1. Check your emotions at the door

Remember, you won’t be living in this home, so there doesn’t need to be an emotional connection to the home or the area. Your decision should always be about which property will give you the best return, not which one is most suited to your own tastes and lifestyle.

  1. Timing is key

It’s a great idea to keep on top of the market’s movements and its dynamics. While there are investment opportunities available most of the time, some market conditions are more favourable. Do plenty of research and, if you don’t fully understand it, ask for help.

  1. Get expert advice

Your broker can put you in touch with experts when it comes to real estate and investment. This means accountants, real estate agents, lawyers, and valuers. These people are immersed in the industry and will be able to guide you in your decision-making.

 

 

Article source here.

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Renovation jobs you can do yourself – and those you shouldn’t

When it’s time to renovate, everyone wants to save money. It’s fine to be hands-on for some tasks, but there are a few projects that are definitely not DIY friendly. Here’s a guide to what you may want to do yourself and what you should leave to the professionals.

What to do yourself

Painting

A fresh coat of paint can give you a strong return on your renovation dollar. Painting is a job almost anyone can take on themselves, although it can be messier and more time-consuming than you might imagine.

The key to a successful paint finish lies in the preparation. Take the time to clean, sand and tape as necessary. Also, choose the right paint for the job and invest in good-quality equipment. Don’t skimp on brushes and rollers – a professional job looks professional because they use the right tools.

Handy hint: a water-based paint can help make the clean-up more bearable.

Paving

You can lift the appearance of your home’s outdoor areas with new paving. Laying bricks or square pavers is a simple task, although you do need to set aside enough time to complete each step properly.

Paving is a multi-step process, from preparing the pathway and cement through to laying the pavers. Try consulting one of the numerous online paving tutorials, or visit your local hardware store for advice.

Flooring

If your home has wooden flooring, you can bring it to life with a sand and polish. Hardware and equipment-hire stores rent out machines for home use. However, achieving a perfect finish is trickier than it looks. If you’re not confident on the tools, another DIY approach is to lay your own floating floor, or even stick down self-adhesive vinyl floor planks or tiles.

What to leave to the experts

Electrical and plumbing

Undertaking electrical or plumbing works can be illegal and potentially life-threatening if you’re not a qualified tradesperson. If electrical and plumbing works aren’t done by a professional, you’re risking personal harm, and exposing your home and family to the risk of fire or flood damage. Leave this to the experts.

Asbestos removal

Prior to 1987, asbestos was commonly used in Australian home construction. If your home was built or renovated before this date, there’s a strong chance it could contain asbestos.

Even minor home maintenance tasks such as drilling a hole into a wall or installing a light fitting can create a health risk by causing asbestos fibres to become airborne. Always engage a licensed asbestos assessor and remover to handle any asbestos concerns at your property.

Roof repairs

Many a DIY renovator has regretted the decision to try to repair their own roof. Falls from ladders are a common cause of injury. During 2011–12, 1,294 men (78%) and 374 women (22%) were hospitalised in Australia as a result of a fall on or from a ladder, and 62 per cent of these injuries happened in or around the home.

A DIY approach can be friendly on the wallet, but there are some jobs simply not worth tackling – your safety is far more important. If you’re considering home renovations, contact your mortgage broker first to find out how much you can borrow.

 

Article source here.

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Renovation Tips That Can Increase Your Home’s Value

Taking care of basic maintenance tasks before you sell your home is a no-brainer, but a quick and not-too-costly renovation can add a lot of appeal for potential buyers, and may boost the final sale price.

Basics first

Fix those little faults that you no longer notice – leaky taps, rusty gutters, broken window catches. They can make a huge difference to a buyer’s perception of value.

Landscape the garden

A well-kept garden can create a low-maintenance feel before buyers even step inside.

Bring the outside in

Opening living areas to the garden can be as simple as adding big bi-fold doors that create an inviting sense of flexibility.

Take the inside out

The garden is a place to live: a barbecue area, deck, pergola or even a plunge pool all invite buyers to imagine their future lifestyle in your home.

Let the light in

Brightening dark areas boosts a home’s appeal; you can install skylights quite economically, and swap solid doors in dark areas for glass-panelled ones.

Put some colour on it

Fresh paint makes a home look ready to live in. Think carefully about colours, and maybe seek some interior design advice – although neutral colours present some people with a blank canvas, to others those spaces just seem bland.

A solid footing

New carpets make a home feel new. Again, think carefully about colour. A step further? Look under the carpet – those timber floors will be lovely when sanded and sealed.

Green it

Installing solar panels or a solar hot water system can add value for potential buyers, who will see future energy cost savings.

Bathroom fix

A brand-new bathroom can cost a lot. Instead, think of replacing shower curtains with clear glass screens and installing new taps, a water-saving cistern and even a new toilet seat. Replace small tiles with big ones, and don’t forget to clean/renew the grout.

Add storage

Buyers are looking for places to store their stuff – cupboards in the garage and in neutral spaces such as hallways are always welcome. A butler’s pantry in the kitchen is great, too.

Some simple and affordable renovation moves can make your home more desirable to buyers, potentially adding to the final sale price.

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How to add maximum value with renovations.

Renovating is one of the best ways for property owners to increase the value of their homes. If you’re looking to add value to your home, but don’t want to renovate every room, it can be difficult to decide where to start.

Here are some ideas to help you decide which part of your property to focus on for the best results.


The kitchen

The kitchen is widely regarded as the best place to start when renovating – and while it can be a lot of work, the rewards can be substantial. Despite being one of the most expensive rooms in the house to renovate, there’s no need to break the bank.

An updated kitchen can make a huge impact on potential buyers, by giving your home a ‘ready to move in’ feel. The Housing Industry Association of Australia report that the average cost of a kitchen renovation(PDF) in Australia is $21,862, but the difference a modern kitchen makes when you’re selling can be substantial.

As far as appliances go, you might choose to purchase a single-brand suite to give a cohesive look and feel to the room. However, there’s often no need to go ‘top of the line’ when it comes to elements such as ovens. Adding value is about keeping costs to a minimum while refreshing the room.


The bathroom

Next on the list is the bathroom, a key element in any house – especially if the structure isn’t particularly modern. Similar to kitchens, an updated bathroom can provide a home with a much-needed contemporary boost, and it doesn’t have to cost the earth.

There are a number of cost factors to consider when renovating a bathroom that don’t apply to other rooms in the house, such as plumbing and waterproofing. Moving the location of sinks, toilets and showers can add a lot to the overall cost, and this money probably won’t result in a lot of value being added in the long run. Therefore, a key tip for doing up a bathroom: don’t overcapitalise.

It’s important to consider the home as a whole, and the features you believe will be desirable for your location and target buyers. If you’re hoping to attract a family, for example, consider installing a bath.


The great outdoors

Another area ripe for high-impact renovation is gardens and back yards. Opening up the rear of your home to create an outdoor entertainment area is effectively the same as adding a whole new room.

If your home already has an outdoor entertaining area, it’s worth considering whether there are elements that could be updated. Adding an outdoor kitchen or designated barbecue area can have a positive impact on the value of the property.

And because first impressions count, don’t overlook the front yard.  ‘Curb appeal’ can be the difference between potential buyers driving by or stopping to take a look inside.

There’s more to adding value than giving your property a quick lick of paint and hoping for the best. The right renovation, in the right area of the house has the potential to add tens of thousands to the value of your home – and choosing the right way to invest your time and money could mean a better result when you decide to sell.

 

Source: (Your Loan Hub)

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Factors to consider on whether to renovate or to sell.

Three Factors to help you make the right decision

Every home owner has been there. You look around your home and try to decide: are you better off renovating the home you have or selling and purchasing a new home? While the decision is very individual, these are a few of the most important factors to consider.


Is your current home livable?

Sometimes renovations are about aesthetic appreciation; other times, renovations are what make a home livable. If your family has increased in size, for example, there may be no way to renovate your home and make it workable. If you merely want a nicer, more up-to-date kitchen, however, selling and repurchasing is a different consideration.


How much hassle are you willing to endure?

A renovation, whether you decide to do it yourself or hire professionals, is quite a project. If you’re going DIY, you spend a lot of your free time working on projects around the house. If you’re hiring professionals, you have to work around their schedule and often take time off work to monitor their progress. Selling and purchasing, on the other side, will require looking at new homes, working with a realtor, and may still require some fixing up at the end.


What is the state of the market?

If your current home is nearly paid off and the housing prices in your area have increased, selling may give you additional capital, which can allow you to get a better home and make a profit. If housing prices in your area are falling, however, selling your home may cause you to lose money and may be a bad idea unless you have no other choice.


How much longer do you intend to stay in your home?

If you are a family of four, but your two children are soon going to be going to university, it may make sense to hold off for a few more years, then downsize your home. On the other hand, if your children are already out of the house or you don’t have children, but an elderly relative may need to move in soon, you may need more space very quickly.

No matter what you choose, you should have clear and open dialogue with your family. Discuss what the best option is for everyone. And remember to consider: some renovations may make it easier to sell your home down the road

 

Article source here.

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