Real insights to assist your property knowledge
- Show all categories
- Property Investment & Management
- Selling Your Home
- Market Updates
- Buying a Home
- Renovating & Presentation
- Consumer Advice
- RealWay Community
- Agent News
- Property Investment
- RealWay Home
- Living Discussions
- Smoke Alarms
- Topics of Interest
- Property Maintenance
- Renting
- Renovating
- Research
- Buying
- Management
- Selling
- Tips
Oct 26, 2023
Interest Only Home Loans: pros and cons
Interest-only (IO) home loans are a popular alternative to traditional mortgages as they allow borrowers to pay only the interest on their borrowed amount for a period of three to five years, resulting in lower monthly repayments during this time. However, it is important to weigh the advantages and risks of these loans before deciding whether they are the right option for you. Pros of Interest Only Loans Advantages of IO loans include lower repayments during the interest-only period, which can help borrowers to free up cash for unexpected expenses or to invest in renovations or other projects. This type of loan can also be useful for borrowers who expect their income to increase in the future, as they can afford to make higher repayments later. Cons of IO Loans While IO loans may seem like a good deal initially, they also have some risks that borrowers need to consider. One of the biggest risks is that when the interest-only period ends, the borrower will have to start repaying the principal and the repayments can increase significantly. This can be particularly difficult for borrowers who have not planned for the increased repayments. IO loans can also extend the overall mortgage term, as borrowers will have to pay off the principal over a longer period of time. Furthermore, some lenders may charge higher interest rates for IO loans compared to principal and interest (PI) loans. IO Loan Expiration: How to prepare for it Before taking out an IO loan, borrowers should carefully consider what their full repayment amount will be once the loan expires. This will allow them to adequately prepare for the higher repayments that will be required. It is also important to note that interest rates may rise over time, resulting in higher repayments than anticipated. To prepare for this, borrowers may want to consider making higher repayments ahead of time or refinancing their loan altogether. Interest Only? IO loans can be a good option for certain buyers, particularly investors. However, borrowers should be cautious not to purchase a property that is beyond their means, as IO loans will eventually become PI loans. To avoid any surprises, it is important to carefully read and understand all loan documents before signing. This information is not intended to replace legal and financial advice. Please consult your financial advisor and legal team for information relating to your individual circumstances.
Sep 26, 2023
Resale potential and buying property
When it comes to selling property for capital gains, timing is crucial. Additionally, having the necessary resources to upgrade to a better area is equally important. Before buying a property, it’s essential to consider its resale potential, especially in adverse circumstances, to ensure a profitable outcome. Stay focused and informed First and foremost, location remains essential. To determine a neighbourhood’s potential for future growth, analysts consider various factors, such as the overall appearance, quality of schools, access, shopping, crime levels, and absence of negative factors like living near a rubbish tip or freeway. By focusing on these factors, you can make informed decisions about purchasing properties that are likely to appreciate in value. Be strategic and patient with property decisions Saving for a property purchase should be a priority for those looking to invest in real estate. Even small amounts saved each week can make a significant difference in the long term. Paying fortnightly rather than monthly can result in more repayments per year, reducing the interest paid over time. Furthermore, any additional income, such as wage increases, tax refunds, or financial windfalls, should be put aside to accumulate savings for a future property purchase. Be disciplined and prepared Discipline and preparation are crucial for becoming proficient in planning your finances. By paying attention to various factors, you can make informed decisions about property purchases, ensuring you pay the right price for a property. Additionally, these practices can help you get ahead in life, making smart financial decisions that lead to long-term financial stability. Various resources are available to help you with your personal finances, so check with your local finance bodies for online calculators and budgeting apps. By taking advantage of these resources and implementing the practices mentioned above, you will be more informed about your property decisions. By considering resale potential when purchasing a property you are taking into consideration factors that will influence your capital gain.
Sep 13, 2023
Buying property at the right moment
Buying property is one of Australia's greatest opportunities for wealth creation and timing the market during real estate investment is crucial. While some investors focus on time in the market, successful ones take matters into their own hands. They often look for uncapitalised areas to invest in and predict where the market is heading to maximise profits. Mastering capital growth Investors need to work their capital as fast as possible to capitalise on the expected growth in the real estate industry. Understanding the different markets and buying in upward-trending areas is necessary for smart investment decisions. Australia and New Zealand offer various state-based property market cycles that provide opportunities for investors to move their money to the next lucrative location. Buying property with a counter-cyclical strategy Affordability and sales volume are two principles that excite or deflate a market. Sales volume has a direct correlation with sentiment, and when people are not buying, investors can secure smart deals. On the other hand, when people are buying, investors can sell and make a profit. Running counter-cyclical to the mindset of other buyers is essential for psychological purchasing, as following the crowd can be harmful to an investor’s bottom line. Market limitations Understanding market limitations is critical for any investor. Every market has a limit, and a market can only sustain so much before becoming too expensive or oversupplied. Local markets tend to perform strongly and steadily without experiencing extreme highs and lows like global megacities such as Dubai. Markets with diverse economies tend to inflate and deflate but still rise in value consistently. Mastering ‘timing the market’ Buyers might purchase real estate too late in the cycle and this can be detrimental to their investment goals. Smart investors pounce on market capitalisation by following guidelines that indicate future boom areas. These guidelines include interstate investors buying into the area, high auction clearance rates, and local investors beginning to return to the market. When opportunity knocks, timing the market becomes crucial rather than just relying on time in the market. To analyse market sentiment to the best advantage, investors need to understand the volatile components of the marketplace and avoid extremes. The real estate industry provides opportunities for smart investors to predict future trends and capitalise on them. By understanding the market and being counter-cyclical to the mindset of other buyers, investors can secure smart deals and maximise profits. If you have any questions about how this situation might affect your investment, make sure you get in touch so we can give you the best advice possible.
Jul 28, 2023
Leasing your investment property
If you have purchased or are looking to purchase an investment property for rental income, there are important steps and considerations to keep in mind. In this article, we will outline some key questions to ask yourself before renting out your property. Considering the factors and making sure you are fully informed when leasing your investment property will help you feel at ease with the process. 1. Are there any issues that need fixing or updating? Before renting your property to someone new, it is important to address any issues with the dwelling. What you’re willing to live with might become dealbreakers for new renters. Common problem areas in established properties include fixtures, fittings, and appliances that may not be durable or of good quality. Investing in new or reconditioned appliances could save you money in the long run. Additionally, cleanliness is important, especially in high-use areas like bathrooms and kitchens. Mouldy grout, broken tiles, leaking taps, chipped paint, and outdated fittings should all be addressed before renting out your property. It may also be necessary to replace or clean carpets, repair wall damage, and amend or replace floors, curtains, and blinds. 2. How do I get started? When it comes to leasing your investment property, it is strongly recommended that you enlist the services of an experienced and qualified property manager. Property managers have the experience in tenancy laws in your state and will know how to get the best possible outcome for your investment property. A trusted property manager is worth their commission so it’s important you do your research and work with the one you feel will work to have your best interest at heart. 3. What are the fees that I need to consider? There are several management fees to consider when renting out your property, including the cost of enlisting a property manager, letting or leasing fees, management fees, marketing fees, and other administrative costs. You and your property manager will need to sign an exclusive leasing and management authority, which gives the agent exclusive rights to find a renter and manage your property. 4. Have I discussed the timeline for the rent payments with my agent? Once a new renter has been found, your property manager will forward rent payments to you within a reasonable timeframe. This timeline may depend on whether the renter pays on time and how often payments are distributed from their trust account. It is important for your property manager to explain their accounting timelines in writing as part of their service to you. 5. What are the repairs needed after a renter has moved out? In the event that repairs are needed after a tenant has moved out, you can authorise your property manager to arrange for urgent repairs up to a specified amount. This authority should be included in your contract. If repairs are authorised, the statement should include the maximum amount that the property manager is allowed to spend on repairs. By keeping these considerations in mind, you can ensure a successful and profitable rental property investment. Let’s explore how we can assist you with managing your rental property and get in touch with our team today.
Jul 4, 2023
Smart property investment: a guide
Investing in property can be straightforward if you follow a few simple principles. Although buying an investment property is similar to purchasing a home to live in, it is essential to approach the decision with a strictly business mindset. "Smart property investment" means focusing solely on the bottom line and removing all emotion from the equation. Know the essential investment principles The key to successful property investment is a steady rental income and strong capital growth. Investing in an affordable, attractive, and well-located property can help to safeguard your finances for the long term. As tenants increasingly seek a certain lifestyle, it makes sense to choose a property that is close to amenities such as public transport, shops, restaurants, parklands, and schools. Additionally, it’s important to consider depreciation and reduced stamp duty when deciding to invest in new dwellings or off-the-plan developments. Define your desired outcome To establish a clear investment strategy, it’s crucial to determine your primary property financial goal. Do you want a self-servicing investment property that provides sufficiently high rental returns, or are you chasing capital growth? Negative gearing can help reduce your tax burden when rental returns do not cover the interest on the borrowed money or the expenses involved in retaining the property. This loss can be used as a tax deduction and varies according to your tax bracket. However, it’s important to be prepared for the potential adverse effects of interest rate rises or a prolonged period without a tenant. Take the best approach to achieve your desired outcome To ensure a successful and "smart property investment", it is important to take a methodical approach. Choosing the right investment strategy will dictate the type of property and location you should be looking for. As with any investment, higher returns come with higher risks. Therefore, thorough research, planning, and attention to detail in each step of the buying process will help minimise risk and stress. Seeking advice from industry professionals may also be necessary, but the benefits of peace of mind make it a small price to pay. Like a fine wine, an investment property requires nurturing and time to mature to reap the rewards. By following these simple rules, you increase your chances of investing wisely. It’s always advisable to consult your home lender, financial advisor, or bank for further investment advice.
Jun 20, 2023
The Benefits of Hiring a Property Manager
Hiring a property manager can be a smart decision for anyone who owns one or more rental properties. Whether you’re a first-time investor with one property or a long-term investor with a portfolio of rental units, a property manager can help you save time, money, and hassle. Here are some of the key reasons why you should consider hiring a property manager. Property Managers handle day-to-day operations First and foremost, property managers can handle the day-to-day operations of your rental properties. This includes everything from screening tenants and collecting rent to scheduling maintenance and repairs. With a property manager on board, you won’t have to worry about dealing with tenant complaints, late rent payments, or emergency repairs. Making sure you comply with your local laws and regulations Another benefit of hiring a property manager is that they can help you stay on top of local laws and regulations. A good property manager will be familiar with the rules and regulations that govern rental properties in your area, including things like eviction procedures, tenant rights, and fair housing laws. By working with a property manager, you can ensure that you’re operating your rental properties in compliance with all applicable laws and regulations. Property Managers maximise your rental income In addition to handling the day-to-day operations of your rental properties, property managers can also help you maximise your rental income. They can conduct market research to determine the most competitive rental rates for your properties, and they can help you identify areas where you can cut costs or increase your revenue. With a property manager on board, you can rest assured that you’re getting the most out of your rental properties. The benefit of reducing your vacancy rates Another key advantage of hiring a property manager is that they can help you reduce your vacancy rates. Property managers can market your properties to potential tenants, conduct tenant screenings, and handle all of the paperwork and logistics involved in leasing your investment property. With a property manager working to fill your vacancies, you’ll be able to keep your properties occupied and generating income. Maintaining your rental properties Property managers can also help you maintain your rental properties and keep them in good condition. They can schedule regular maintenance and repairs, handle emergency repairs, and ensure that your properties are in compliance with all health and safety codes. With a property manager taking care of your properties, you can rest assured that they’ll be well-maintained and attractive to potential tenants. Providing valuable insights and advice on the rental market Another benefit of hiring a property manager is that they can provide valuable insights and advice on the rental market. They can help you identify trends and changes in the market, as well as help you make informed decisions about your rental properties. With a property manager on board, you’ll have access to their expertise and insights, which can be invaluable in making smart, data-driven decisions about your investments. Helping you achieve work-life balance Finally, hiring a property manager can help you achieve a better work-life balance. Instead of spending your time dealing with tenant issues and property management tasks, you can focus on other areas of your life or your business. With a property manager taking care of the day-to-day operations of your rental properties, you’ll have more time and energy to devote to other priorities. There are many good reasons to consider hiring a property manager if you own rental properties. From handling the day-to-day operations of your properties to providing valuable insights and advice, property managers can help you save time, money, and hassle while maximising your rental income. So if you’re looking to streamline your rental property management and achieve a better work-life balance, get in touch and discover how our team can help you achieve your property investment goals. Are there risks with self-managing my property?
Jun 5, 2023
Keeping your tenants happy while selling your property
If you’re attempting to sell your property while also managing an investment property, it may seem like a daunting task. However, by enlisting the help of a good sales agent and property manager who work collaboratively with the tenant, a successful sale can often be achieved. Keep an open communication Effective communication is essential. Although some states have strict regulations around sales inspections of rental properties and notice periods for entry, open communication with renters from the beginning of the sales campaign can create a solid foundation for the sale. A good sales agent and property manager will contact the tenant prior to listing the property for sale to discuss the requirements and work with them on the best times for entry. They should also be mindful that the renter may be nervous about people coming through their home and the potential need to move if the property is sold to an owner-occupier. Keep on helping with the presentation throughout the selling period Presentation can make all the difference. Every owner has their level of cleaning and presentation, but a property may need extra care to show it in the best light. If that’s the case, it may be helpful to offer professional cleaning and gardening services throughout the sale. This will ensure that the property is presented well both inside and out and can make the experience less stressful for everyone involved. Keep motivating the tenants with incentives Incentivising renters can ease the process. The relationship between the owner, tenant, and agent can be complicated, especially when it comes to the security of a home. Offering rental compensation as a thank you for the inconvenience throughout the sale campaign can sometimes assist in transitioning the renter through the process. Additionally, if the tenant is locked into a fixed-term rental agreement, you may want to offer a penalty-free tenant break option should they wish to move on and find another property, which would lead to a vacant property when it comes to the sale. Although this would mean a loss of rental income, it would allow an opportunity to make small improvements to the property before the sale, which may contribute to a higher sale price. To determine the best options for your property, it’s important to speak with your sales agent and property manager and work out which avenue is best for you, the property, and the renters. By working together and utilising these strategies, you can make the process of selling your property while managing an investment property much smoother and more successful.
May 30, 2023
Investing in property? Three things to consider...
Investing in property can be a wise choice due to its potential for strong capital growth and reliable passive income. However, it is essential to understand that property investment is a strategic decision that requires a clear understanding of your goals and objectives. Clearly define your reasons for investing Unlike buying a home, investing in property is not an emotional decision, so it’s essential to know your “why” before investing. Before investing, you should be clear about the duration of the investment, whether you’re looking for a short-term rental return or a long-term investment for retirement. These factors may impact your choice of property and location. Hence, it is important to research the suburbs and properties that match your investment goals. Get clear on your budget To invest in property, you need to have a clear understanding of your financial situation. Lenders evaluate your financial history and expenses, including rates, levies, capital works, and maintenance, to determine how much you can borrow. They also consider the potential income from the property and current and forecast capital growth in the area. This information helps them determine whether the rent will cover expenses or if you’ll need to cover the mortgage repayments and other expenses with a portion of your income. Consider the location Once you have your finance sorted, it’s time to look at the type of property and location. The type of property you choose to invest in will have a significant impact on your obligations for maintenance and upkeep. For instance, an apartment investment will require you to consider strata levies, which can significantly increase your costs each quarter. Additionally, you’ll need to consider the location of the property as this will impact the capital growth and rental yields. All properties require maintenance and upkeep, and investing in property is no exception. Depending on the age of the property, you may need to allocate funds to cover regular maintenance, repairs, and future refurbishments such as paint, carpet, blinds, kitchens, and bathrooms. To ensure the smooth running of your investment property, consider engaging an experienced property manager who can provide expert advice to maximise your investment and take care of the day-to-day operations. After all, investing in property can definitely be a reliable and profitable asset with the potential for strong capital growth and passive income. If you own an investment property, the day-to-day management can be quite challenging. However, an experienced Property Manager can alleviate the stress by providing expert advice and support to optimise your investment. Our property management team can help you find tailored solutions to make the process of owning an investment property seamless. Don’t hesitate to reach out to our team to learn more about how we can assist you.