There are more property investment articles, commentaries and analyst reports on the Web every week than anyone could read in a month. Each Saturday morning I like to share some of the interesting ones I’ve read during the week.
Enjoy your weekend…and please forward to your friends by clicking a social link buttons on the left.
10 dangerous ‘tips’ investors get
Margaret Lomas, founder of Destiny Financial Solutions, reveals the most detrimental pieces of advice given to property investors in Your Investment Property:
1. Invest in the US
Those spruiking these properties are on handsome commissions and a lack of good research opportunities has seen many people buying properties worth less than half of what they are paying.
2. Use your super
Very few people have enough in super to make this a viable, diversified strategy, the borrowing is complex and costly, compliance is onerous and the accounting is complex and also costly. Unless someone has several hundred thousand dollars in superannuation, this is not a sensible strategy.
3. Buy into a hotel or serviced apartment complex in a holiday spot
This is usually made on the basis of being able to get some personal benefit from the purchase. Firstly, any personal benefits come at the cost of tax deductions and secondly, these kinds of property may have good yields but usually have poor growth records.
4. Buy in one area only
There are thousands of property markets all behaving differently and a diversified approach will help to add stability to a portfolio.
5. Buy off-the plan during unstable economic times
It’s hard enough to forecast future values and even harder to do so when we are so unsure of the future. Investors should only ever buy existing property with a known value.
6. Buy property in an area where there is a single ‘kicker’
It’s the concert of factors (that is, many growth drivers) which makes property grow, not just one single factor.
7. Buy because of high yields alone
Getting a strong cash flow is important but not unless there are identifiable growth drivers too. Cash flow may keep you in the market, but you need growth to build net worth which allows you to eventually retire.
8. Buy to take advantage of a tax ‘loophole’
One day these loopholes will be closed off and if the only thing a property has going for it is a tax loophole, then you will be left with a poorly performing asset without the tax advantage.
9. Invest because you saw a property that looks good
The decision to become an investor should come about because you decide property is the right asset class for you, and you then do a lot of independent research and get educated.
10. Buy a property with a rent guarantee or other scheme of arrangement over the top
You should only ever buy a property because the underlying asset stacks up, not because it has a rent guarantee or a good tax arrangement. If you find a property with all of the intrinsic growth drivers in place and it also has a guarantee or other arrangement, then it may be okay.
Lessons from past property booms | What are finance buffers? | Will Sydney property really grow at 20%| How to chose a top selling agent
Another great Real Estate Talk show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.
Details of this week’s show:
Tyron Hyde dispels many myths and confirm a number of rumors about depreciation.
Finance expert Andrew Mirams answers some questions about financial buffers.
Charles Tarbey tells us how to make sure you are getting the best agent
Louis Christopher sets the record straight about his comments recently that the Sydney market in particular will grow by up to 20% in the next 12 months
You should definitely subscribe to this weekly audio program. Click Here It’s free and you can listen on the go on your smartphone, iPad etc.
New vision for city of 5 million people in Melbourne
The Melbourne Age reports :
A 40-year vision for Melbourne expected to be released shortly will outline four employment clusters at La Trobe University, Parkville, Monash Clayton and Sunshine and moves to reduce urban sprawl with tighter urban boundaries.
A draft of the Napthine government’s long-awaited metropolitan planning strategy is tipped to be released on Wednesday outlining key housing and employment growth areas, transport priorities and a vision for Melbourne as it races towards 5 million people.
The blueprint is the government’s strategic replacement for the former Labor government’s Melbourne 2030 plan and will be the launch pad for its infrastructure priorities heading into the 2014 state election. The draft is expected to expand on a vision in the earlier discussion paper for a ”20-minute city” with jobs, services and recreational attractions within 20 minutes of home.[sam id=38 codes=’true’]
RMIT planning expert Michael Buxton said the strategy could not produce a hard urban boundary because it was a ”fictitious beast”, with governments unwilling to permanently prevent urban sprawl.
He said sprawl was likely to pause in coming years because of the large amounts of land already released for development, not because of a new hard boundary.
Melbourne is one of the largest cities in the world in geographic area, stretching 150 kilometres east to west. ”There is already enough land for a generation,” Professor Buxton said.
He said the strategy should push for the ”concentration of development in nominated transport-friendly, mixed-used centres”.
Professor Buxton said the strategy’s transport vision could be undermined by the $6 billion-$8 billion east-west link. ”This government has given up on public transport before it starts,” he said.
Top 10 most searched for suburbs in Australia
Property Observer published the list of the 10 most suburbs searched for on realesate.com.au over the last quarter and there were some surprises (for me ) there:
The top 10 searched suburbs were:
- Parkside (SA)
- Freshwater (NSW)
- Belair (SA)
- Newmarket (QLD)
- Surrey Hills (VIC)
- Ashwood (VIC)
- Blackburn South (VIC)
- Fitzroy North (VIC)
- Stanmore (NSW)
- Fullarton (SA)
At the same time last year the top 10 suburbs were:
- Parkside (SA)
- Norwood (SA)
- Walkerville (SA)
- Hazelwood Park (SA)
- Mont Albert (VIC)
- Clifton Hill (VIC)
- Park Orchards (VIC)
- Unley (SA)
- North Rocks (NSW)
- Carlton North (VIC)
5 things every investor needs
Your Investment Property Magazine explains there are 5 things successful investors need:
Being focused in property requires a solid business plan
Think about what you want to do and then why you want to do it.
Do your due diligence. Don’t make any decisions, any commitments whatsoever, unless you have done your research very assiduously.”
Sometimes people get very rigid about their thinking, even though all of the peripheral indices and factors could cause a reasonable person to rethink the road they’re going down. Remember to be flexible. Don’t be wedded to a particular goal or concept if the warning signs would indicate that you should think a deal through.”
This means protecting your investments through proper risk management. This strategy includes having a “street smart” real estate agent, property inspector, lawyer and tax accountant. The right team can save you time, money and your sanity.
Being determined means more than staying motivated in tough times.. It also means keeping the bigger picture in mind.
How much sleep is right for you?
News.com.au reports that sleeping for between six and eight hours a night could be key to cutting the risk of heart problems and stroke.
A study found people who sleep for fewer than six hours a night were twice as likely to suffer a heart attack or stroke as those who sleep for between six and eight hours.
They also had a two-thirds higher risk of congestive heart failure, where the heart’s ability to pump blood around the body weakens, damaging other organs.
But sleeping for more than eight hours was associated with more than double the risk of angina and a 19 per cent higher likelihood of coronary artery disease.
Author Dr Saurabh Aggarwal, of Chicago Medical School, said six to eight hours was the “best period of sleep duration”, adding: “People whose sleep duration is at the extremes are at the highest risk of cardiovascular events.
Blogs you may have missed this week:
If you didn’t have a chance to read my daily blog, here’s a list of the blogs you missed this week: