Six ways to make your resolution a reality
Six ways to make your resolution a reality
Posted on Tuesday, January 08 2013 at 12:48 PM
Did the beauty of the beach over your summer holiday allow you some quiet time to plan your goals for 2013? This could well be your first week back at work after the Christmas break, and like many investors, your New Year’s resolution could be to purchase another investment property in 2013.
Jane Slack-Smith of Investors Choice Mortgages says many clients come
back after the holidays and ask for a loan for a property in Byron Bay or
Noosa. The problem is many clients are comparing prices with Sydney or
Melbourne – they think they’re getting a bargain if they pay $300,000
instead of $700,000 for a house.
“Everything is cheap. You might see a unit with beach views for $250,000
and think it’s fantastic,” Slack-Smith says.
“But the reality is, a lot of those properties on the market are having
trouble selling. You have to think ‘how would I sell this if I needed to down
the track?’”
Another potential problem is using 2012 data for your 2013 dream. For
example, Slack-Smith has recently seen a number of contracts fall over in the
mining boom town of Gladstone, Queensland, based on the fact valuations are
coming in lower than the buying price. There are also lots of properties
available for rent in Gladstone, which is hurting investors with vacant
properties.
Slack-Smith says investors should do their own research when it comes to
investing. She offers the following tips to make sure your investing dreams
become a reality in 2013:
- Figure out exactly where you want to buy and do
your analysis. - Figure out your numbers and exactly what you can
afford. - Spend the next few months building a good team
around you. Find a helpful team, including an accountant, building inspector,
surveyor, etc. - Search for a few months for the right property –
take your time and don’t rush into it. - Work out what the property will cost you to hold
and what profit you might be able to make, either in the short-term or
long-term. - Make sure the property will achieve your goals. Are
you chasing capital growth or cash flow?
“Trying to reclaim the holiday glow by buying in the holiday location is
probably not a good idea,” Slack-Smith says.
“People who are retiring don’t want to use all their money to buy in a
coastal location. Buying something just because it’s cheap might not fit the
demographic. Work out how the property fits in.”
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