If you want to invest in property, stop reading the headlines!
This is one topic that is always guaranteed to polarise the public and generate sensational headlines.
One day we are told that real estate is booming, the next day people like Steve Keen and Harry Dent are predicting falls of up to 40 per cent.
When a boom is on there are many articles telling us how much our home is increasing in value with comments that it’s a tax-free gain and worth more than we are earning.
The problem is that most media commentary focuses on something called the “property market”.
We may be told that Australian property is overheated or that the property market has fallen by 5.6% in the last year (in Sydney), or that Perth values have fallen by 12.6% after peaking in 2014…but the simple fact is…
There is no such a thing as a single property market; not for Australia and not even for a single capital city; there are many property markets all moving to their own rhythms.
How can you compare a townhouse in Subiaco with a mansion in Mullaloo?
All over the country, some markets may be rising, other markets may be falling and some may be flat so, if you are serious about investing in property, stop reading the headlines and set yourself a specific plan.
The first job is to find out exactly what you can afford and what financial strategies are available to help you get there.
This means talking to a mortgage broker who specialises in property investment and discussing your complete situation, plans and overall strategy.
Then, having worked out your price bracket, you need to research areas where you can buy a property you like for the price you’re able to pay.
Once you have established that you are able to invest, take the time to research the market thoroughly so that you become an expert on the area.
Always keep in mind that the secret of success in real estate is to buy well.
Pick an area with strong growth potential which should generate strong demand and push up the price of the property you bought.
Pick an area with a strong yield as this will help you maximise your borrowing capacity, help you hold the property for the medium/long term and allow you more of a buffer with those loan repayments.
Keep in mind that Australia’s population is on track to reach 40 million within 35 years – this has to be positive for anybody who buys well-located, quality real estate today and hangs on to it for the long term.