The 'High 5' for buyers of real estate
August 01, 2013
Deputy chairman of LJ Hooker, L. Janusz Hooker, shares his top five tips for smart real estate buying, whether it is your first home, your dream home, your last home or an investment property.
1. Location, location, location
It’s a catch cry in real estate but choosing the right position for an investment property is essential for good yields and potential capital growth. Look for undervalued areas close to key services which will appeal to tenants. This includes public transport, easy access to freeways, and a mix of public and private schooling. Properties close to shops, restaurants and bars will also be easier to rent out because there is a sense of community. Investing close to social hubs will also appeal to younger people who are more likely to live in leased accommodation.
2. Why property and why now?
Interest rates are at historically low levels with good yields. The local economy is fairly stable compared with other countries around the world. Australia has a strong net migration, which also means there is demand for rental properties. There has also been an increase in the number of overseas students requiring rental accommodation while studying here. Meanwhile, self-managed superfunds have seen an increasing number of people buy property as part of their retirement fund.
3. Houses versus Apartments
There are advantages to investing in both types of dwellings but it can depend on budget and how long you intend on holding the property. Land is a valuable commodity and suitable for a long-term asset. While there are no body corporate fees, property maintenance costs involved in home ownership are higher.
4. Hold or Sell?
Property should always be seen as a long term strategy, especially if it is your primary place of residence. No-one wants to end up homeless through bad financial management so err towards conservative real estate choices and remember to take into account hefty upfront fees like stamp duty when buying a home.
5. Minimise risks
Be pro-active with your financial management but if you don’t have time or an interest in managing your property assets, find a good, trusted expert who will do so on your behalf. Always aim to have an equity buffer in case of an emergency which could see your financial circumstances change suddenly, such as the loss of a job or a marriage breakdown.
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