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4 habits of successful property investors

4 habits of successful property investors

4 Habits of Successful Property Investors

Australians love investing in property, and it’s no wonder why. The property market offers a myriad of opportunities to potentially grow wealth, irrespective of one’s professional background or skillset.

However, there are certain habits that successful property investors often have in common. Let’s take a look.

They are proactive about self-education

In order to stay ahead of the game, seasoned property investors are proactive about self-education. They understand that the property market is ever-changing, and that one must keep up to speed with developments in order to succeed.

As a result, successful investors understand the economic factors that drive markets and the way market cycles work. They can recognise when the market is shifting and act early. And they can seize opportunities where possible.

If you want to be a successful investor, you need to become an avid learner. Here are some ideas:

Listen to podcasts (examples include Equity MatesThe Property Couch and The Investors Podcast)

Devour books, investment magazines, and blogs on the topic

Do property investment courses online or through a local learning institution.

They make the most of professional help available to them

Smart property investors understand that while it’s important to nurture their own knowledge, they can’t know everything. Everyone has limits.

The key to success is to leverage the abilities of exerts in their field. Mortgage brokers, real estate agents, financial planners, accountants, conveyancers, buyers’ agents, property managers – all of these professionals are resources to be drawn on in order to make smart property investment decisions.

They review their investment loans regularly

The right investment loan for you today may no longer suit your needs in a year’s time. Successful property investors continually review their loans to make sure they still measure up.

In this way, clever investors can identify new opportunities along the way. For example, they may refinance their loans to include offset accounts and redraw facilities to save interest, or they may set up lines of credit to renovate their investments.

They have vision

Experienced property investors look past the current market movements to see the big picture. They understand the nature of property cycles. Sometimes it pays to buy and hold property; other times it’s best to flip. Having vision is what sets the successful investor apart from the mediocre one.

They also plan for contingencies. Buying an investment property comes with financial benefits, but there is risk involved. For example, what happens if the tenant falls behind in rent or something major needs to be repaired? What if the property’s value falls? Smart investors plan ahead and have strategies in place for these kinds of challenges.

Like to know more?

Whether you’re a seasoned property investor with a multi-property portfolio or a rookie investor, we can help you achieve your financial goals. We’ll line you up with the right finance for your specific needs and future aspirations. Please get in touch.

What’s the right loan for your renovation?

What’s the right loan for your renovation?

What’s the right loan for your renovation?

Renovating your home or investment property is a fantastic way to add value. But what’s the right way to finance the renovation project you have in mind?

There are several ways to finance a renovation – the option that will work best for you depends on the size of your project, your budget, financial circumstances and your goals. Your mortgage broker is an expert when it comes to helping you choose the right loan option for any renovation – here’s an outline of some of the finance options we recommend to get your renovation dreams off the ground!

Line of credit

The benefit of a line of credit is that you only pay interest on the money you use. The way it works is that you apply for a line of credit against your home with an approved limit, then simply use the funds as needed.

You can pay off the balance as you go, then use the funds again later for the next stage of your renovation – much like a credit card. If you want the freedom to pay tradespeople or buy materials whenever you need to, a line of credit may be ideal, particularly if your renovations are ongoing.

Personal Loan

A personal loan is a good option if your renovation costs are relatively small, or you plan to pay the loan off quickly. With a personal loan, you can secure the finance against an asset, such as property or term deposits, or opt for unsecured finance without collateral (this option usually has a higher interest rate). The application process is usually quicker than for a home loan and the money is deposited into your account for you to use as required.

Interest rates on personal loans are usually much higher than home loans, however we have access to competitive rates, so we can potentially help you save. Depending on how and when you plan to pay back the loan, you can choose a variable or fixed rate option. Many personal loans allow extra repayments so you can pay it off sooner and reduce the interest you’ll have to pay, so talk to us about the right one for your needs.

Construction Loan

Construction loans are a great option for larger renovation projects that require a builder. This could include anything from a small extension to a complete knock-down and rebuild. With a construction loan, the lender will use the final value of the property post-renovation to calculate how much you can borrow. Once approved, you can draw down periodic progress payments at different stages of construction.

A construction loan offers significant benefits for larger renovation or building projects:

You only pay interest on the money you draw down

The payments are interest-only during construction

Each stage must be inspected and completed before you can draw down the funds for the next stage. This helps to keep your builder on track

The loan converts to a home loan of your choice after construction is completed

Refinance to access equity

When you refinance your home loan to access your equity, you end up with a sum of cash to use as needed or to finance your renovation project. Refinancing your home loan could be a good idea if you’re ahead on your loan repayments, your property’s value has increased, or you’ve paid down your home loan considerably since you took it out. (It may not be a good idea if your property has fallen in value, or your financial circumstances have changed for the worse since you purchased it.)

Refinancing may also allow you to access other useful features such as a line of credit, or a redraw facility – which could be useful if your renovations are ongoing. It’s important to remember you may not be able to access all your equity – so talk with us and we’ll help you work out your borrowing power.

What’s right for you?

Whether you’re planning to make a few cosmetic improvements or give your property a complete overhaul, chat with us about the finance side of things. The right loan choice will depend on where you’re at financially and what you’re hoping to achieve. For example, the finance we recommend for those renovating their own home may be different from what we’d suggest for those renovating an investment property, or those flipping for profit.

If you’d like to find out more, just give us a call today.

o your tenants have pets?

o your tenants have pets?

Do your tenants have pets?

Laws have been introduced to make it harder for landlords to refuse requests by tenants to keep pets, in most states. However, allowing pets to live in your investment property can be a double-edged sword. On the one hand, you’ll have a wider pool of prospective tenants, potentially increasing your rental returns and helping you to retain tenants longer. On the other hand, there is also the potential for pets to cause damage. So, what can you do to protect your investment?

Catering for pets in your investment property could help your tenants prevent their pets from causing any serious damage. Here are some great tips for catering for ‘fur-children’ in your investment property!

Modify the property to make it pet-friendly

Since you may not be able to avoid renting to tenants with pets, you may like to add pet-friendly features to reduce the risk of damage to the interior of the property. Providing facilities to help your tenants keep their pets outdoors will minimise the time they spend inside the house, which may save you money in the long-run on maintenance and repairs.

For example, a secure cat or dog door will make it easier for small pets to get out. This will reduce the need for litter trays and discourage them from doing their business inside. It will also eliminate the tendency to scratch at a door or flyscreen when they want to go out.

Include some outdoor features for pets

One necessity for pet owners is a well-maintained fence to keep their fur-children safe when outdoors. Ensure there are no gaps where a pet can easily escape. The risk of a pet getting out is likely to cause your tenants to leave their pets inside the house, rather than in the yard and over time, this is likely to cause the kind of damage you want to prevent.

Another great idea is to provide a pet enclosure or pen in the garden, with a covered area where pets can take shelter from the sun and rain. If your tenant has a large dog, they will think this is a great option and may even pay more to rent your property. Cat lovers will also appreciate a secure enclosure where their cats can enjoy the sunshine and fresh air without being left to run loose – many councils make it illegal to leave a cat outdoors after dark, and busy roads are always a worry.

Additionally, it may be a good idea to modify the garden to make it low-maintenance and suitable for pets. Rather than worry about the pets digging up your expensive landscaping, keep things simple with grassy areas and plenty of bushes and shrubs for shade.

Avoid expensive carpets

With an investment property, it’s best to choose flooring that will be durable and easy to keep clean in the long-run. Carpets are never a great option as they breed dust mites and are a hazard for asthma sufferers – but throw a pet into the mix and things can get smelly! Hard flooring – like tiles or laminate – is likely to be a better option, as it wears better than carpets over time, and is much more resilient to those little accidents which often occur with even the best trained house pets.

If your property already has hard wood floors, simply take up the carpets and get them sanded and polished. Alternatively, there are some great inexpensive vinyl flooring options that look fantastic and are extremely easy to clean and maintain.

Consider taking out landlord insurance

Before tenants with pets move in, it’s a good idea to consider taking out landlord insurance. Importantly, make sure your policy covers damage caused by a domestic pet or animal residing in your property. This is not always the case, so be sure to read the fine print.

Pet-friendly rental properties are often in high demand, and as an investor, it may work to your advantage to allow pets into your property. It will certainly give you access to a wider market of renters, some of whom may be willing to sign longer leases and/or pay higher rents for your property if you cater for their pets the right way.

If you’re in the market for an investment property, or you already own one but are considering renovating or refinancing, we can help you obtain the right loan for your needs. Please get in touch today!

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