If you’re investing in property, it’s important to do so the right way. And while investing in a unit or apartment can be a good financial move, there are some serious traps to watch out for.

Age

Older apartment and unit blocks, particularly the kind that were put up in large numbers in the 1960s and 1970s, can be a good entry point for first-time investors. But make sure to get a thorough building inspection, as these types of units can suffer from potentially expensive structural problems.

Size

Again, if you are a first-time investor, you might consider buying something quite small to begin with. Do your research on the capital growth potential of a studio or a small one-bedroom, as this may be proportionally smaller than that on, say, a two-bedroom apartment.

Block Size

Are you buying a unit in a block of 10 or a tower of 500? Remember that value is based on scarcity, so—especially if you are buying off the plan—buying in a smaller block will make you less prone to a sudden glut in the market, as well as allow you to offer a more unique option to potential tenants.

Which Floor?

When it comes to apartment blocks, property experts differ on whether a top floor, ground floor, or mid-level apartment is the better option. Ground-floor units can offer greater accessibility for those who need it, but may be less secure than those higher up. On the other hand, it’s hard to beat a top-floor apartment with a great view. The best choice will depend on a range of factors such as the size of the building, its location, whether it has a lift, and so forth. Weigh up these factors carefully.

Property Investing

For specialist property investment advice, contact Rass Global Investments.

Those investing in property will want different things from their investments. For some, property investing provides extra earnings on the side, while for others it’s their main source of income. What you get out of investing will depend on how you approach your investments and how much of your own time and money you are able to put towards them.

Property Investor

You have a full-time income, and probably already own or have a mortgage on your own home. Investing is a way for you to leverage a portion of your income to create a return for yourself through rents, to build an asset base for your retirement years, and possibly to take advantage of property depreciation rules to decrease your tax burden.

Property-leasing Business Owner

You own multiple properties and most of your income is rental income. A substantial part of your day-to-day work consists of management tasks related to your portfolio of properties.

Property-trading Business Owner

You buy properties in order to sell them for a profit in the short term – sometimes referred to as ‘flipping houses’. You are constantly on the lookout to buy properties that will yield significant growth as fast as possible, either because of fluctuations in the market as a whole or because of the changing character of particular suburbs. You may also look for properties where there is potential to add value, such as by renovating a dated bathroom or kitchen, in order to sell the property for a profit.

One-off Investor

You aren’t engaged in an ongoing property-trading business, but are undertaking essentially the same activity on a one-off basis. Taxation rules for this can vary depending on the scale of the undertaking.

Remember that the Australian Tax Office will treat your investment income differently depending on which of the above categories you fall into.

Property Investment Advice

For specialist advice on all aspects of property investing, call Rass Global Investments.

Property ‘hot spotting’ is the name that some property investment experts have given to the trend of hunting out the next investment ‘hot spot’ – that rapidly gentrifying suburb or mining town that’s, supposedly, just about to boom.

Not So Hot After All?

The term ‘hot spotting’ tends to have a slightly pejorative tone to it – turning the overenthusiastic claims about ‘the next property hot spot’ of so many headline writers and self-interested spruikers back upon themselves.

Those who are sceptical about hot spotting point out that it’s highly speculative – essentially a high-stakes gamble – and while a small number of people do make a lot of money off chasing trends, just as in any casino most of the punters end up worse off than when they started, or at best breaking even.

The trick to hot spotting is being ahead of the curve – get in too late and you’ll pay too much for too little. That sounds easy, but how do you know if you’re far enough ahead of the coming boom to make the profit that you expect to? It all depends on how big the boom turns out to be.

A safer option is to invest in areas with proven long-term capital growth, and to look for properties that are undervalued or where there is potential to add significant value through renovations or refurbishments. That’s a long-term investment strategy rather than a short-term money-spinner, but it’s also much more likely to yield solid results.

Property Investing in Perth

For more information on property investing in Perth and Sydney, contact Rass Global Investments.

Looking to pay off the mortgage on your home or investment property faster? Here are a few tips that can help you be debt free as soon as possible.

Increase the Frequency of Your Repayments

Mortgage interest accrues daily, so making payments as soon as possible can decrease the interest accrued, even though you are still paying the same amount in total towards the mortgage. Try rearranging your payment schedule to fortnightly rather than monthly.

Make Lump Sum Payments

When you find yourself with an unexpected cash lump sum, put it towards the mortgage. Check with your lender about their rules regarding lump sum payments, as there may be limits to the amount you can pay off in this way without penalty.

Arrange a Mortgage Offset Account

A mortgage offset account is a transaction account linked to your home loan. For the purposes of calculating interest, funds in the account are offset against the value of the loan. This can save you a substantial amount of interest, especially if you are also saving for a large purchase such as a car or a holiday. Generally, there should be a minimum amount in the account at all times for an offset account to work in your favour.

Take out a Loan with Yourself

When you get a raise at work or if interest rates go down, don’t see this as extra disposable income. Instead, aim to keep putting the same percentage of your income towards the loan. This will allow you to be debt free sooner over the long term, and won’t mean any drop in your existing quality of life – it will just mean continuing to live as you have been rather than indulging in new luxuries.

Property Investment Coaching

Add a granny flat to pay off your mortgage in approx 10 years.

Do a development and pay your mortgage off in 1 year.

For more property investing advice, contact Rass Global Investments.

In this recent video from Australian Property Investor magazine, investment specialist Chris Gray talks about current trends in the Sydney property market.

The Sydney Market

In the video, Chris says that the Sydney property market is, in general, doing quite well. He says that his own investments have increased in value a little over four per cent in the last 12 months, and singles out Sydney’s eastern suburbs as an area that he personally chooses to buy in, as it’s many apartments are in constant demand.

The Impact of Interest Rates

The current low interest rates and high levels of consumer confidence are good for property investors. With the rates being at a surprising low, he says now is definitely the time to buy.

Predictions for the Near Future

For the rest of the year, Chris predicts that the market will continue to grow. The market is healthy but not booming, and Chris expects another boom in the near future because of low interest rates encouraging a lot of investors and homebuyers to get into the market.

Advice for Investors

When asked what advice he would give investors, Chris says that investing is a matter of balancing the need to be well informed about the market with the need to jump in. As Chris puts it: “If you wait for perfect knowledge, you’re never going to get it, so at some point, just jump in”.

Investment Property Advice

Worried about jumping into the deep end with property investing? Contact the investment professionals at Rass Global Investments for property investment coaching.

The popularity of units is on the rise in Sydney, which is good news for property investors seeking solid capital growth on a portfolio of cheaper properties.

Riding the Lifestyle Revolution

Recent reports suggest that the popularity of unit living in Sydney is increasing, especially in the western suburbs, as renters are prioritising low maintenance living and accessibility of the inner city over the traditional detached house on a quarter-acre block.

In 28 suburbs in New South Wales, almost all of them in Sydney, units are now offering better rental incomes than houses as a percentage of the property value. Units were once considered a necessary evil for low-income earners, but are now being viewed as a lifestyle of choice and the demand being placed on the existing supply of smaller, low maintenance accommodation options is growing.

Units in Mt Druitt, Leumeah, Macquarie Fields, Ingleburn, Auburn and Blacktown are delivering the best rents relative to property value. In all of these suburbs, annual rental yields as a percentage of property value are more than six per cent, which is sufficient for the rent charged to cover mortgage repayments and associated costs, without the investor having to cover any shortfalls.

Units in Mt Druitt are providing the best rental returns of any suburbs – 7.5 per cent per year – based on a median property price of just under $250,000. Houses in the same suburb are returning annual rents of only 5.5 per cent of property value, leaving house investors in Mt Druitt with out-of-pocket expenses to cover the shortfalls between the rent and mortgage.

Investment Properties in Sydney

For professional advice on investing in property in Sydney, contact Rass Global Investments.

There are two distinct investment options open to you when you decide to put your money in property: commercial or residential. There are benefits and downsides to each, so you need to be able to assess the potential hazards and rewards, and what kind of investment risks you’re willing to take.

Investing in a Commercial Property

In general, commercial property asks you to take higher risks but offers greater financial rewards. The tenants for a commercial property will be businesses and this means that the rental value is dependant on the health of the economy as well as the quality of the tenant.

When one tenant leaves, it can also take a long time to find a suitable replacement, meaning your investment could sit empty for a long period. Buying a commercial property also tends to be a more complex process and renovation costs are higher.

Residential Property Investments

The risks are normally much lower for residential property investments, as you are more likely to be able to fill your space quickly. You might find that your property is empty for a few weeks between tenants here and there, but high demand for residential housing means it’s unlikely to be empty for a prolonged period.

While residential properties are a lower risk investment, you will find it harder to pass on costs such as rises in utility bills when you’re bound to a rental agreement, and the return tends to be much lower than for commercial properties. However, buying in a popular area can drive your profit to higher levels.

For specialist advice on all aspects of property investing, including the pros and cons of residential and commercial lets, contact Rass Global Investments.

“If you are going to be thinking anyway you might as well think BIG!”

In this video Donald Trump shares how his experience of “Thinking Big” has changed his life!

Thinking big can be applied in any aspect of life but is particularly relevant to us because Trump looks at Thinking Big from the perspective of a builder.

His top 10 tips to thinking big include:

1. Being thorough

2. Having momentum

3. Staying focused

4. Looking at a solution

5. Seeing opportunity

6. Knowing everything you can and what you are doing

7. Being lucky and being passionate

8. Seeing yourself as victorious

9. Being smart

10. Never giving up

Let Eurobodalla Real Estate assist you in thinking big and achieving your goals through our property investment advice.

With election silly season well and truly over, the ramifications of the changing political parties is creating a stir among Australians – particularly about what the future of the country holds in terms of the economy. With concerns for the economy comes the inevitable question of the property market – will the property market be affected by the election?

The Good News

In general, the Australian economy is in good shape, with low unemployment, low interest rates and low inflation. Additionally, our population is growing, and the rest of the world economy is continuing to recover from the crises of the past five years or so.

All of this means that, whether it’s the Labor or the Liberal Party that stays in power for the long run, the Australian property market should, ideally, continue to experience stable growth.

The Bad News

If there is a potential spanner in the works, it’s not so much this party or that one winning on Election Day, but the election of an unstable government that cannot hold the floor in the House of Representatives for a full three years.

With recent turmoils in the Labor Party, the general unpopularity of both major party leaders, the slew of new minor parties on the ballot, and revolts on all sides over issues such as coal seam gas mining, marriage equality and asylum-seeker policy, an unstable government, possibly resulting from another hung parliament, remains a real possibility.

That’s an outside chance, but it’s certainly not unthinkable in the current political climate. Provided this possibility can be avoided, the Australian property market should continue to grow for the foreseeable future.

A senior economist claims that thanks to significant growths in office developments, hubs in Sydney’s North West have been identified as prime spots for significant growth in coming years.

Jason Anderson, senior economist at property advisory MacroPlan Dimasi, recently revealed the verdict at a conference. He suggested that several northern Sydney suburbs would enjoy a noteworthy rise in popularity, with a large amount of demand coming from young professionals.

Smart Property Investment magazine reports him saying that business hubs at Macquarie Park and North Ryde are increasingly attractive to businesses looking for alternatives to the high prices found in the city centre. Businesses relocating due to rising commercial rents will have a knock on effect on the number of individuals looking to live in the area.

University students were also highlighted as contributing to a potential boom and Mr Anderson claimed that the growth can be seen across the whole of Western Sydney and in the North West particularly.

Mr Anderson offered some advice for any property investors considering purchasing, revealing research that forecasts a rise in property prices by 5.5% per annum and a boost to rental prices by 6.5% per annum. He suggested that now might be a good time to invest.

For help assessing the merits of investing and some guidance when it comes to creating or building a property portfolio, get in touch with the expert team at Rass Global Investments. With local knowledge and many years of experience, they are perfectly placed to offer services at every stage of the investment process