Monthly Archives: June 2016

Smart Money

What really matters in Property Investing?

Success in pure residential property investment can be achieved by following any number of different approaches but how do you find the right property?
Five of the most important aspects that can set you on the right path for an investment property are:
1. Location; a well quoted necessity, but it needs to be favourable from the perspective of Growth in value, and from the tenant’s perspective, not necessarily yours!
2. Small lot development; the bigger the complex the less special your property and therefore the less appealing to tenants, your bank and future purchasers (not to mention the body corporate fees)
A piece of your own dirt naturally adds to that liveability factor as does a small development or free standing property.
3. No holiday accommodation; while the thought of holidaying at your own property may be appealing and there is the opportunity costs of tenant rent potential foregone, it’s the vacancy rates and sporadic capital growth depending on variable locality appeal that can sink the deal. In addition, an onsite manager may favour other properties they own rather than yours.
4. No guaranteed rental; quite frankly “what is so bad about the property that market forces can’t dictate the rent?
I’ve seen more guarantees broken than I’ve heard of being honoured.
5. No syndicated developments; where a developer finds a builder, a seminar marketer and a mortgage broker to wrap up the whole deal, how many years of your capital gain are you prepared to pay for, just to fund all those sales commissions and builder’s margins?
Long after the spruikers have driven away in the car you funded, you’ll be left to deal with market forces yourself, so it makes sense to buy under the same conditions, not through a conveniently engineered process.

Cheers, and if you know of a family member or friend we can assist, please don’t hesitate to share with them.
Dave Dyson

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