One of our Business Partners, Property Friends, explains why property investing is more successful when you are thinking National, not local when looking for areas to invest –
Regular readers of our newsletter will know of our nationwide search for property that provides you with the highest, safest returns with minimized risk. Peter McRae, a winner of Your Investment Property’s Investor of the Year Award, agrees. He says. “When people look for investment properties in familiar areas, they can focus too much on trivial things at the expense of the real issue, which is whether or not there are growth drivers”.
Don’t be afraid to buy sight unseen: “Most people feel comfortable buying in their local area, but usually only because they are used to living in the area. Comments such as ‘I’ve lived there all my life’ are common, but it is not a reason to purchase there for an investment,” Peter says.
Secondly, he argues that when you see the property, you are also more likely to be affected by emotional decisions that are not relevant. These can include whether you like the kitchen or not. Therefore, seeing the property can actually be counterproductive.
Use a buyer’s agent: The first place to begin is to look for areas that are due to grow soon. He does this either by buying property reports or by speaking to his buyer’s agent.
“Buyers agents are invaluable because they tend to know the areas well – from an investing standpoint. They develop good relationships with local agents, and their negotiation skills are exceptional because they do it every day,” he says. This is also what Property Friends does. McRae also believes that buyers’ agents are an especially good option for people who are unfamiliar with buying interstate. “I found that I learnt an enormous amount of information from my buyer’s agent, and it saved me making mistakes.”
Following that, his next step is to make sure the area has good rental returns, preferably above 6%. Once the area has been decided on, then it’s a case of finding the property.
These comments were posted on popular, independent website “Your Investment Property” and it seems as if this award winning investor has been reading our newsletters – as his thoughts are aligned with ours. In summary, he believes investors should:
- Look nationally
- Complete thorough research
- Hire a professional negotiator/buyer’s agent
- Enjoy increased returns
We also like to add that there are a number of other areas to review before making an investment in property. When evaluating a new development for purchase, we investigate the area’s vacancy rates, clusters of social housing, nearby industrial/commercial developments/infrastructure/schools etc, traffic flow [during peak and off peak times], council and insurance rates plus stamp duty and land tax structures. These factors affect long-term property growth and rental prospects.
That’s why they are carefully considered by Property Friends when researching a new development deal for you. Think of all the time and uncertainty our due diligence will save you. We do all the work including ongoing support to ensure you have a successful Property Investment portfolio. To find out more call Uwe (03) 9758 5331 Melb Australia or www.propertyfriends.com.au.
(As posted on Linked-in Pulse)
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