Points To Consider
- RESIDENTIAL PROPERTY IS ONE OF THE SAFEST INVESTMENTS.
- SINCE THE BEGINNING OF TIME MAN HAS WANTED TO OWN LAND.
- THIS IS A FACT WHICH NEVER ALTERS.
- IT IS NOT GUIDED BY FAD OR FASHION.
- AUSTRALIA TODAY HAS OVER 100 YEARS OF RECORDED STATISTICS SHOWING PROPERTY VALUES DOUBLE NEARLY EVERY 10 YEARS.
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BUYING MOTIVE - THERE ARE 2 TYPES OF RESIDENTIAL REAL ESTATE
- THE PROPERTY THAT YOU BUY TO LIVE IN - We call this the Heart home
- THE PROPERTY THAT YOU BUY FOR INVESTMENT - We call this the Dollar home
There are many different factors one needs to consider between the two.
- For the Heart home this is where emotional decisions are made and understandably so because this is where you spend a large portion of your life.
- For the Dollar Home this is what will determine HOW you are going to spend your life in future years. In other words what your financial situation is likely to be
REMEMBER - IT IS COMMON KNOWLEDGE
The worst house in the street will perform a lot better than the best house in the worst street. Don't become emotionally involved in the decision making - DO THE SAME THING AND NOTHING WILL CHANGE
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The following are key points to consider:
1) TIMING & PROPERTY CYCLES
Everything in life is cyclical, from the human heart beat to the movement of the planet and the ability to identify these cycles is the difference between profit and loss, and long term and short term gains.
Property will always have a cycle, and at any time will either be at one of these Four phases:
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At PR Australian Properties, we ascertain on an ongoing basis, where the property cycle is. They vary from one region to another at any given time. It is this information which ensures our investors get the maximum capital growth from their property.
Australia has a pattern of property cycles between 7 and 10 years The most recent cycle has been a little longer with 12 years from the previous peak but prices have significantly increased over the past 7 years.
Where is the best part of the cycle to buy? Too risky to buy on the Downturn, because we do not know where the bottom of the market is going to be. May wait years for it to hit the bottom.
No point buying at the peak because the profit has been made and then we have to wait for it to go through the Downturn again.
The best place to buy is at the Uptrend because it shows that the cycle has bottomed out. Many people like to buy at the bottom and sell at the top, but the problem with that thinking is no one knows where the bottom is until the turn has started, unless they have a crystal ball...... Buying at the Uptrend means that capital gain will be achieved in the next few years. The property market is heating up on the Gold Coast and record sales are being achieved. Y0U WILL BUILD YOUR EQUITY BASE QUICKER WHEN YOU PICK IT RIGHT
2) ECONOMY OF AREAParticularly important in Australia, with each state having different economies and taxes, it is important to find out what the economic viability of the area is, and you need to determine which has the lowest cost of living. Australia is a high growth, low inflation and low interest rates economy, although of late we have had seen a few interest rate rises. The Australian economy is more buoyant than it has been for many years. It still has one of the highest growths in domestic economies in the world. In fact, right now Australia is outperforming the rest of the industrialized world. States with a debt can only clear debt by raising taxes on the people.
Queensland is the lowest tax state and the Queensland Government has accumulated financial assets to cover by a good margin any of its liabilities and it has more net assets per capita than any other Australian jurisdiction
It has the lowest group tax and payroll tax of any state, which encourages Corporations to establish their head offices there. Recent arrivals, such as, Virgin Airlines, Qantas, IBM, Boeing, Hatch Engineering, Arnotts, Suncorp Metway, to name just a few, testify that they can be more profitable there than other states for the same turnover. PLACE YOUR MONEY IN THE TOP ECONOMIC SPOT AND YOU WILL GAIN
3) DEVELOPMENT MONEY AND INFRASTRUCTUREA major key to successful property investment is in choosing areas which have major infrastructure and to know what money is being spent in the area. What infrastructure is in place? New roads, rail or public transport, hotels, hospitals, schools - all signs that the development is for long term and not for a "one off event" such as Olympics, Expo and Commonwealth Games.
Development money coming in also produces JOBS, JOBS, JOBS.
The greatest money being spent on development and infrastructure right now in Australia is in Queensland, on the Gold Coast. INVEST WHERE MONEY IS BEING SPENT AND YOU WILL PROFIT
4) POPULATION GROWTHProperty itself will not make money. It is the PEOPLE there to rent and buy. Therefore, it is crucial to establish where the population growth is at any time.
Australia has a population of approximately 20 million people. Visit the Australian Government's web page www.abs.gov.au/Austats to get up to date population situation.
The population growth in Australia is approx 1.3% whilst Queensland has a population growth of 1.5% and within Queensland there is an area known as the Gold Coast, which has a population growth of 3.5% which is 2.5 times the national average.
Often people think they have to buy in the cities such as Sydney because they have the largest population base where in fact they are losing population. INVEST WHERE THE PEOPLE ARE MOVING TO AND THE FORMULA WORKS
5) SUPPLY V's DEMAND IN THE AREAIf the price of any product or commodity goes up or comes down is entirely dependant upon one factor:
The Gold Coast today is experiencing unprecedented demand and not enough supply, this will force prices up SMART INVESTORS IN PROPERTY DETERMINE THE SUPPLY & BALANCE IT WITH THE DEMAND
6) MINDSET OF PEOPLE IN THE AREAOne of the greatest mistakes made by property investors is this fact.
From one area to another the demand changes and it is imperative to be educated in the difference in various "types" of properties sought after. In other words the mind set of the people in the area you are investing in.
Often foreign investors think about what is popular in their country and make the mistake of buying similar for investment in the off shore area.
Factors such as what number on the door, which direction the property faces etc have no bearing on the profit potential in Australia.
Often people miss great capital gain because they want to "drive past and see their property" which leads them to buying into areas which will have little capital gain, no rental growth and consequently they are not maximising the buying power of their dollar.
96% of all Millionaires in Australia have made their money through property. They have one common philosophy.
They also are not led by personal preference or by other people's opinions. DO NOT BECOME EMOTIONALLY INVOLVED IN A PURCHASE |
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