14 Ideas to think about for 2004

Tips As 2004 Approaches

14 Ideas for Property Investors:

1. Do some mortgage rate shopping to check you’re not paying too much. Investigate whether fixing part of your loan is viable. The scientific way is to fix the portion of your loan you don’t expect to pay off during the loan term.

2. Where you have a variable interest rate loan, aim to repay more than required. Definitely repay more than the minimum, this creates a ‘buffer’ in the event of sudden rate rises.

3. Where you have a IP and good tenants, seek to lock them in for as long as possible to provide income security.

4. Before you purchase an IP, check out the rents being paid by the kind of tenants you hope to attract in the areas you are buying in.

5. Study the income yield you will receive. High prices have pushed ‘most’ residential property rental yields to very low levels by international standards- a tiny 3 to 4%- which is half what investors in other countries achieve.

6. If you ‘just’ want to make a property investment , be aware of property investment trusts, these are a much more liquid investment and although not achieving growth as pronounced as residential property, produces good yields.

7. Whether it is a PPOR or an IP, treat it as an Investment ! because of the possibility you may sell in the future, you should seek to examine the re-sale potential of the home with the same emotional detachment as an investor.

8. Before purchasing, know exactly, what you can afford and then calculate your situation if interest rates rise in 1% increments, is there a level where you could be in trouble ? how will you cope ? do the same with preposed renovations, be aware of overcapitalisation, don’t just assume prices will increase.

9. Develop your understanding of the real estate market, the real estate industry is well serviced, just look at this site here..

10. Don’t kid yourself prices can never go down, watch the trends, especially if there are further rates rises, prices could fall 5 to 10 % or more.

11. Don’t write off property as a ‘simple’ investment, it’s more complicated than you think. Be aware of influences that affect prices, do your research.

12. If you are forced to sell due to financial reasons, be aware the market dynamics are changing, you may have to be flexible on the asking price, especially if rates rise further.

13. Just because market dynamics change, doesn’t mean the basics of smart property investing change. The fundamentals remain stable, the asking price, whether the seller will negotiate, cost of essential repairs, and realistically achievable rental.”remember” you make your profits when you buy too..

14. Ask about the ‘running’ expenses of the home as well as the expenses that relate to the area where you are thinking of buying, such as transport costs, maintenance costs etc

QUOTE OF THE ………

A woman is like a pack of cards.
You need a Heart to love her,
a Diamond to marry her,
a Club to keep her in line
and a Spade to bury her. [:0)]

REDWING

Who ever said women are the weaker sex, has ‘never’ tried to get a doona off one at 3am