Australia’s property markets are experiencing signs of a downturn in our capital cities. This uncertainty, together with the prospect of interest rate rises is fuelling anxiety for many prospective first home buyers.
Many are unclear if now is a great time to get their foot on the property ladder. However, Australia’s property market is turning and there are opportunities to purchase right now, providing you employ a sound investment strategy together with a smart approach.
Here are my five red hot tips to assist women navigating the property market:
Tip 1: Buy As Soon As You Can
If you can afford to buy a property now, then don’t fail to make the most of the opportunity. Property is always an expensive asset to purchase. Back in 1980 when I purchased my first home for $26,000 I thought that I’d be living off baked beans for years just to be able to pay the mortgage!
Over time, having reduced your debt and realised capital growth for the property, you can make headway on your mortgage. It’s then more feasible to use the equity in your property to ‘invest’ in another property.
Tip 2: Become a Rentvestor
For those wanting to take a different and easier approach to home ownership, Rentvesting is emerging as an increasingly popular strategy. This allows you to live in one of your preferred suburbs, while still providing the opportunity to enter the property market via an investment property you can afford. It helps that you don’t have to pay your entire mortgage when you have the tenant doing it for you.
With Rentvesting all your investment properties are owned and controlled by you and the expenses attached to those properties are tax deductible and therefore up to 40 per cent cheaper than your own home. Wahoo!
Tip 3: Run the Numbers and Purchase A Positive Cash Flow Property
In uncertain times, it’s sensible to prioritise investment properties that generate positive cash flow. These properties cover their running costs, so, you don’t have to make up the shortfall on your mortgage every month as council rates, water rates, insurance, property management fees and other costs, are covered.
Applying disciplined due diligence to scrutinise your potential property will pay off and is a critical part of the purchase process.
Tip 4: Buy to Add Value to the Property
Properties that need minor cosmetic renovation but are in a great location are worthwhile targeting, provided the home is structurally sound. New carpets and fresh paint can make it more desirable for a tenant to rent.
Other properties to search out include those on a subdividable block of land where you can build a second dwelling at the rear of the existing home or add a granny flat for a second income stream.
Tip 5: Treat your Investment Property Like a Business
Before signing a contract make sure that you’ve reviewed all the costs associated with the property including calculating how much the property will cost each month to retain.
Understanding those costs will give you the confidence to either move forward and acquire the property or let it go and look for another property with similar numbers.
Regardless of what happens with interest rates or inflation, look to improve your financial position by mapping out a well-thought-out Property Strategy and ensuring you apply due diligence to each property under consideration. Devote thirty to forty minutes every day to expanding your property knowledge by reading property blogs and listening to podcasts