When it’s done right, investing in property can help you to build wealth for your future. In Australia, property is currently a very popular investment and many people are enthusiastically jumping into the market to make the most of the low interest rates currently available. But it takes careful planning for your property investment to be a success. Here are ten key factors to consider before investing in property.

1. What you want to achieve
First, determine what your end goal is – it might be financial freedom, to tie up some extra funds, or to live in the property yourself in years to come – and then make a plan that’ll help you reach that goal in a suitable timeframe. Review your plan on a regular basis to make sure you’re on track.

2. Your preferred investment strategy
If you’re looking to maximise returns, wise investors focus on buying a property below its intrinsic value in an area with a long history of strong capital growth. Also look for a property that’s unique, special or different, and one that you can renovate or redevelop in order to produce better capital growth.

3. The type of property
A good investment is a property that’ll be in continuous strong demand from both tenants and owner-occupiers. This is because tenants help pay off your mortgage, whereas owner-occupiers push up house prices. More people nowadays trade their backyards for balconies, so think about going for an apartment-style property in the inner suburbs.

4. Buying old or new
Remember, you’ll often miss out on capital growth for the first few years if you buy a new or ‘off-the-plan’ apartment. This is because you’ll have to pay a premium to the developer.

Another thing to consider in purchasing a new unit as an investment property, is that many owners in the building will most likely be investors also. It’s best to buy an apartment in a building predominated by owner-occupiers, as they typically look after the building more effectively than investors. The established apartment should also be in a character-filled block that can be cosmetically refurbished, as this can help you increase your rental income and produce some capital growth.

5. Where to buy
Location is very important when it comes to your investment’s long-term performance, so look for a property in a suburb that has always outperformed the averages or one that’s being renovated or redeveloped. You’ll usually find it in a lifestyle suburb in a major capital city near the CBD, amenities or water. Then narrow your choices further by choosing the best spots in the suburb.

6. What you can afford
You should know how much you can afford to spend and repay before you look for a property. You can do this by talking to us about getting a pre-approved loan and setting aside some funds for acquisition and holding costs, as well as a financial buffer for an emergency or a rise in interest rates.

7. Who to ask for help
In addition to us – your professional finance broker – you’ll need expert input and advice from the following people: qualified accountant, independent property strategist, smart solicitor, and if at all possible, an experienced property investor as a mentor. They can all help you ensure that your investment is a success.

8. The importance of research
Successful property investors never stop researching the market to capitalise on the best opportunities. You should familiarise yourself with all Australia’s various property markets and not just your local market, in order to find the best potential for profit.

If you’re looking to invest for the first time or expand your existing property portfolio, or to venture into investment for the first time, contact us today. We’ll help you with your finance and give you referrals to professionals who can help you with the purchasing process.

After a long wait the residents of Girrawheen, Koondoola and Wanneroo have finally had their rezoning formally approved and can now start submissions for subdivision STCA (Subject to Council Approval). Quinns Rocks, Yanchep & Two Rocks are currently still in the consultation stage.

You can find more information on the City of Wanneroo website or by calling your Element Finance Joondalup home loan expert.

http://www.wanneroo.wa.gov.au/info/20017/planning_and_building/50/residential_recoding

The autumn property market is proving to be very busy and full of opportunities for home buyers and investors. We expect lower interest rates will stimulate the market even further, so talk to us about getting your finance in place now!

The Reserve Bank of Australia (RBA) met for its May meeting last week and decided to cut the official cash rate by 25 basis points, bringing it to just 1.75%. The move took many forecasters by surprise and brings the official cash rate to an all-time low!

The RBA decided to make the move in response to low inflation figures and a strengthening Aussie dollar. Forecasters do not anticipate another cut in the immediate future, however the RBA is likely to reserve this option in case it feels the economy requires further stimulation moving forward.

This is great news for property owners and buyers across the country. Property markets have been performing well, with plenty of housing stock available to buyers. Auction numbers have been quite high across all states, however clearance rates are not as high as last year for most markets, except for Sydney and Melbourne where they reached 74% for the last weekend in April.

Growth in home values has been good across all cities during April, except for Hobart where home values declined by 5.33%. Sydney home values increased by 2.40%, Melbourne 1.07%, Brisbane/Gold Coast 1.81%, Adelaide 2.03%, Perth 0.47%, Darwin 2.53% and Canberra 1.21%.

Following the RBA cash rate cut last week, lenders have already started to reduce interest rates, particularly on variable interest rate products for owner-occupier purposes. However, we are also seeing rate cuts across other loan product classes, so if you are looking to refinance, fix your interest rate or invest, talk to us and we’ll shop around to find the most competitive rate for your needs.

If you already have a home loan, please remember that when rates are on the move, it’s wise to check with your mortgage broker to ensure you’re still getting the best deal available for your needs. We don’t charge for a home loan health check, so please give us a call today!

We recommend that you seek independent financial and taxation advice before acting on any information in this newsletter. It contains general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply. Information sources: Auction results: www.realestate.com.au. Home values: www.corelogic.com.au

Sincerely , Element Finance

We here at Element Finance are super excited to introduce to you the most recent Mortgage Broking expert to join our team, Leandro de Jesus.

If ever there was someone that made discussing finance and home loans truly an enjoyable experience, that someone is Leandro. His genuine enthusiasm to help each and every one of his clients succeed with their property goals is clear in every instance.

Himself an active property investor, Leandro understands what it can take when it comes to starting or growing your investment portfolio. His first hand experience in the WA property market continues to prove invaluable for his clients. 

Focus: Leandro is the guy you want on your side for all things property investment. Living in the City of Joondalup, he has an intimate knowledge of the surrounding suburbs. If its discussing home loan structure, negotiating a personalised deal with your lender or connecting you with other property professionals, he has you covered.