Liam Smith
Business is booming in Australian investing and nowhere is that more apparent than in the real-estate market. It’s hard to argue against it, considering that buying properties almost always gives you solid returns. Those returns take a while to manifest, which means you have to have an edge if you want to make any significant profits. Here are some things you should consider before you enter the market.
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Maintaining a steady cash flow is important
Everyone knows that invest in real estate is a sound decision. Australian property prices are consistently on the rise and purchasing anything will eventually net you more money than you spent. The issue with this is that real estate takes a long while to actually pay off. If you intend to purchase a property, you need to have the finances to back it up. Ask yourself two important questions. Am I able to regularly pay off the mortgage repayments over a long period of time? Could I continue payments even if I ran into some slight financial problems?
If the answer to both of these questions is yes, you should be good to go on your investment. Many inexperienced investors go too big on their first property and end up with issues at the first sign of financial trouble
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Real-estate agents can be of great assistance
Investors like to think that they can treat any kind of asset as if it were the same thing. This kind of thinking is an enormous mistake that could end up costing you a lot of money. Real-estate is complicated enough as it is, even when you don’t intend to buy and sell it. When you’re looking to invest in properties, you should always consult a licensed professional first.
Consulting a real-estate agent before buying anything would be your best course of action. They probably know the ins and outs of the trade and they can tell you what to look out for when buying. There’s no reason for you not to trust them, either. If your purchase is successful and you end up with a good investment, it’s very likely that you’ll contact them again to do the sale as well.
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Investing in Strata
The Australian real-estate market includes another system that isn’t present in most other countries. Strata is a specific kind of property management system which has its own unique rules. It has caught the eye of experienced investors and they’re clamouring to get in on the market. What sets it apart from other property management systems is how it treats ownership of the apartments and building. Apartments, or “lots” as they’re called, are owned by the lot owner and include everything within their four walls, while the rest of the building has shared ownership between all of the lot owners that reside within it.
Strata schemes are usually much cheaper than other kinds of properties, which makes them extremely attractive to investors. The only thing you have to worry about is dealing with specific rules set by the owners of the common property, also known as “body corporate”. Before purchasing a strata lot, you should first consult experts in strata law such as Eling Strata Management, as they can help guide you through the process of running or renting a lot.
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Picking the right kind of property
Since investing in real estate is all about capital growth, you will want to start investing in something that is more likely to accrue value over time. It also has to have a low enough starting price to allow you to benefit from all that growth. This is the tricky part. It’s easy to know the value of the company stocks you purchase on the stock market because they are transparent. Homes and apartments don’t have their actual value plastered on a piece of paper. Real estate is extremely difficult to price for many reasons.
Doing the necessary research before you buy a property is critical to your success as an investor. You have to figure out where the market is headed and if your investment is worth making. The good news is that you’re not the only one with an appraisal problem. Owners aren’t aware of how much their property is worth, which means that you can end up with an extremely valuable property for low sums if you know where to look. Mortgage insurers and lenders are often well informed on the potential value of most properties. Befriending them could give you an edge in the market.
Conclusion
Investing in real-estate is smart, but the real brilliance comes from making good decisions along the way. Think of it as a very long game of chess. You need to think many steps ahead before you make a single move. With a couple of rock-solid investments, you can be set for life.
