Making informed decisions
January 01, 2016
In this guest post, Kristian Nelson-Marshall from LJ Hooker Inner City provides perspectives on informed investing.
Where you buy
“Location is obviously the most important, and that can be narrowed down as much as a street, or even an aspect of the street that can make a significant difference to the potential growth of a property’s performance,” said Mr Nelson-Marshall.
He asserts that if you are looking for an area to invest in, a good rule to stick by is to ensure that it is within a 10-kilometre radius of a major city hub - and even smaller distance for smaller cities like Adelaide or Perth.
“Also, it’s sometimes a good idea to start your investment portfolio in an area that you live in, because you’ll know that market more than anyone else does,” he said.
What you buy
Mr Nelson-Marshall stresses the importance of not only focusing on the quality of the property you purchase, but also the size.
“I’ve seen owners in the past caught out that way. They’ve gone and paid a price for a three-bedroom terrace, say in an area like Surry Hills, and it ends up becoming a two-bedroom rental because of the size of that third bedroom,” he said.
If you’re a first-time investor and can’t decide between purchasing a house or a unit, Mr Nelson-Marshall recommends you discuss your objectives with the real estate agent and an experienced property manager as they will have a good perspective as to the rental capability of the property.
“Buy into an apartment building that is fairly modern - nothing too old where there could be a special levy raised as suddenly the building needs repainting because it’s 30 years old or the fire alarms need to be upgraded, for example,” he said.
When you buy
Mr Nelson-Marshall believes there is never a bad time to buy property; you just may have to look in different areas depending on what the market is doing.
“The property market is only as abundant as the people pushing it. As soon as they step back, in my view, is when you should jump in on investment property,” he said.
A proper understanding of the market i
s crucial. Mr Nelson-Marshall recommends going to open homes and viewing auctions to paint a clear picture of the market.
“If they’re all going crazy then that’s an indicator to me that it’s time to take a step back and wait for things to settle down,” he said.
Any other tips?
As some final pieces of advice, Mr Nelson-Marshall said to not expect quick profits from property, be patient, take your family and friends’ critique with a grain of salt and ensure that you “engage a skilled and qualified property manager that has a good reputation, because that could make or break the
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