Want to Learn to Invest?

investment planning

 

You’ve always wanted to invest in real estate, right? The expression isn’t ‘safe as houses’ for no reason. Owning investment property is a great way of securing your future or even helping your children to secure theirs. So, how do you get started? Here’s some great tips to help you.

One of the best (and easiest) ways to learn about real estate, investing and all the things that concern both is to read. While that sounds ‘old-school’ there are many online blogs that provide content, sometimes from key industry experts. The best part about the blogs is the number of them – by reading as many as you can you gain a range of different perspectives and opinions. This can help you gain the confidence to make informed decisions.

There are also many books written on the subject of investment. Rich Dad Poor Dad by Robert Kiyosaki, while written twenty years ago is one that remains popular and relevant. A follow up, Rich Woman by Kim Kiyosaki, Robert’s wife gives a woman’s perspective on investment. Books with a specifically Australian focus include The Future of Property Investing in Australia by Sam Saggers, 20 Must-ask Questions for Every Property Investor by Margaret Lomas and The Barefoot investor by Scott Pape.

While requiring an outlay of money and time, there are courses that you can undertake that will give you an understanding of property investment and help you learn ways to create additional income through asset purchase. A local TAFE is a good place to start with an enquiry regarding this type of course.

One of the best ways to develop skills and knowledge in any aspect of life is to build relationship with a mentor. A good mentor will be a person who is already achieving the things you are setting out to accomplish yourself. They will be willing to listen and advise honestly.

There’s a lot to know about investing in real estate and while it is important to learn as much as you can, it’s also important to know that there are professionals who can help. Accrue Real Estate have many over twenty years’ experience of the Melbourne property market. Our clients not only get realistic advice but learn aspects of property investment along the way. Accrue can help you reach your investment dreams.

Investment Planning

investment planning

 

Many people start out wanting to invest in property so they can reap the benefits of the rental market, but their dreams fall by the way because they simply don’t have a plan. Buying rental property is pretty much like your last years at school when you complete the VCE – the choices you make along the way impact the final result.

One way Accrue Real Estate helps their clients is by teaching them how they can invest to meet their financial goals. Just like the teachers who instructed you during your VCE years, Accrue Real Estate staff have a system to leads you to your ‘financial graduation day’.

 

You began VCE by choosing the subjects that suited you, that were going to take you to where you wanted to be. When you start out of the property investment ladder, it’s just as important to know where you want to end up. Perhaps your investment is to safeguard your children’s future and give them some security. Maybe investing is part of your retirement plan. You might want to purchase a property to rent to students; you may be more interested in renting to families. All of these decisions allow you to narrow your focus so that the decisions you make help you realise your financial goals.

 

Key to success is VCE is taking time to study. Property investment also requires study – you need to know about the location of a property. Is it close to amenities? Is it close to parks? Are there schools in the area? Shops? How close is public transport? Does the suburb perform well financially and with rental yield. This is one of the key areas Accrue Real Estate can assist. Their experience in the Melbourne property market means much of this study is done for you. Accrue can provide you with the ‘study guide’ that helps lead you to success.

 

The pressure time of VCE is the exams. There has to be an endpoint to any plan. Go through everything buying the property will mean for you. This might be financial – is it the property to meet your goals? Is the area going to continue to develop? You might consider the property through the eyes of a prospective tenant – does it provide everything they need to be comfortable? You’ve done the study – this is where it all pays off because you use it to make the decision.

 

The next bit is easier – you celebrate graduating to a property purchase! All the hard work has paid off and you have the perfect property to achieve your financial dreams.

 

Remember, just as there were many people to help you through the VCE, Accrue Real estate are there every step of the way to make sure you have all the information you need to make informed decisions to achieve your financial plan.

The Melbourne Property Market

Glossary

 

Death, taxes and a never-ending property cycle. Three things of which we can be certain. There is much talk in the media about Australia’s cooling property market and while there’s both pessimism than optimism in these views, it is easy to get carried away with the fear-mongering rife in our news cycles. Remember, media outlets know that bad news is more likely to grab attention than good news.

The reality is that our property market has changed and we are seeing it move into a different part of the property cycle (for more on the property market cycle, see here). The reality is also that we have not seen a massive drop associated with a property ‘crash’.

According to CoreLogic Property Data, Melbourne property prices fell 0.5% over the last year. Given this fall comes after five years of remarkable growth, it is probably time to be cautious … but not panic.

As is expected at this stage of the property cycle, it is the upper end of the market that is seeing the biggest shift in interest.

It is expected that Melbourne property prices will fall a little further – estimates range from 1.5– 3% – this is balanced by a heathy economy and continued jobs growth. It is also offset by the popularity of Melbourne as a place to live – the city has Australia’s strongest population growth.

A recent REIV report named suburbs such as Doreen, Mernda & Roxburgh Park as the hot spots which would provide “opportunities for buyers”. The continued popularity of units over houses means that older villa units that have the potential to be updated and renovated could make an excellent investment. Likewise, boutique townhouse developments in the right suburbs will also be sought after.

Regardless of which part of the property cycle it is, Accrue Real estate have the knowledge and experience to help you make a move into the property market. No hard sell, just solid information and advice. Contact Accrue today to see how we can help.

Image attribution: Alpha Stock Images – http://alphastockimages.com/

Real estate in a cooling market

Glossary

 

All the signs point to the Melbourne– and, for that matter, the majority of Australia’s capital cities – being in a slow property market. It would appear that the peak of the market was around September last year. This is, of course, just part of a continuing property cycle and like any other part of the cycle, you need pay attention to make effective use of property information.

For sellers, a realistic price point is essential, as is finding the right person to sell the property. In a cooling market, it also prudent to make sure the first property has sold before you buy the next one.

The good news is that a cooling market can definitely favour buyers, so it’s time to organise your finance and get the pre-approval from your lender. This is time in the market cycle when you can make offers well below the advertised price, and so long as you are acting with your head and not your heart, you can sometimes find a long-term bargain.

Of course, just as it’s impossible to predict the exact peak of the market, it’s just as difficult knowing when the rock bottom arrives. In Australia, there are a plenty of doomsayers who point to the fact that our market was not affected by the Global Financial Crisis of ten years ago. They are predicting a greater downturn to redress this imbalance.

Regardless of the state of the market, Accrue Real Estate has the experience and knowledge to help you decide if the time is right for your property investment. Learn more about Melbourne property investment opportunities by contacting Accrue Real Estate today.

Glossary – Finances

Glossary

 

Buying property is the biggest investment most people make, so it’s important to understand as much of the process as you can. There are many terms relating to the financial aspects of property purchases that can bamboozle the uninitiated. The list below contains some of the key terms you need to know about banks and taxes.

BANKING TERMS

Bank valuation
This is the bank’s estimation of the value of the property you are looking to buy. It is quite often a conservative estimate which will be lower than the advertised or market value.

Amortisation period
While it sounds quite strange, this simply refers to the number of years it will take you to completely pay off your mortgage. This period varies in length but 20 and 30 years are the most common mortgage amortisation periods in Australia.

Fixed Interest loan
This is when the interest rate stays the same during a period of the loan. You may choose to fix the interest for the first three years. This can be an advantage if interest rates climb during this period and allows you to accurately predict future payments.

Interest
Basically, this is the price you pay to the bank for providing the loan to buy the property. It is calculated on the amount you borrow (principal). The rate of interest can be fixed, variable or even a combination of the two (“split loan”).

LMI
This stands for Lenders mortgage insurance. This is often required if a borrower doesn’t have a big deposit. The cost of this will be added to the borrowed amount and paid off within the mortgage. LMI is designed as a protection for the lender.

LVR
This stands for Loan-to-value ratio. The LVR is a percentage calculated by simply comparing the amount of money you have to borrow to the value of the property. If the LVR is high (over 80 per cent, for example), LMI is more likely to be charged.

Mortgage Offset account
A mortgage offset account allows your savings balance to offset the balance in your home loan account, rather than earning interest on your savings balance. This reduces the interest charged on the mortgage.

Mortgage protection insurance
This is an insurance policy to cover a borrower’s mortgage repayments if they cannot pay them due to illness or injury.

Mortgage registration fee
This is a State Government charge paid when a home loan is registered.

Split Interest loan
A split interest loan allows you to use part of your loan amount with a variable interest rate, and another part with a fixed rate. You get the advantage of the security of a fixed rate but also the flexibility of a variable rate. If the interest rates rise a split interest loan can reduce the impact.

Variable Interest loan
In a variable interest rate loan, the interest rate charged on the amount owed varies as official and bank interest rates change. This means your re-payments will vary as well.

TAXATION TERMS

Capital gains
This is the ‘official’ term for the profit on the sale of a property, which is called a capital asset.

Capital gains tax (CGT)
CGT is the tax on any profit made from the sale of an investment. This would apply to investment property not the family home.

Negative gearing
When you borrow money to invest it is referred to as ‘gearing’. Any income you earn from the investment is said to be ‘positively or negatively geared’. Negative gearing is when the costs of the investment are more than the income you receive from it. In Australia, the tax system allows you to use this investment loss to offset any other income you earn, allowing you to pay less tax.

Stamp duty
This is a tax applied when a property purchase is made. It is calculated on the purchase price and varies in the different states and territories of Australia.

The list below contains some of the key terms you need to know about banks and taxes (find an explanation of the terms used in Real Estate here).

Want help to cut through the investment jargon? Accrue Real Estate has the experience and knowledge to help in your property investment decisions. Contact Accrue Real Estate to get the clear picture of Melbourne property investment opportunities.

The Property Cycle

The Property Cycle

 

It is key to property investment to understand that the market moves in a cycle. Watching long term, you will notice the cycle lasts for around seven to ten years. Over this time four phases will be evident: a flat stage with no real price rise; a growth stage when prices begin to go up; the peak stage which is the highest point in the cycle and the correction stage where prices cool off or, sometimes, stagnate. Ideally, after the cycle has run a full course the price of property will have doubled.

The last six months has been an interesting time for the Australian property market.

• Australian house prices have entered a negative annual trend for the first time in six years
• For the first time since 2012, there were more units than houses sold at auction
• The number of properties successfully sold at auction is at a six-year low, below 60%

While there have been some specific factors – the Banking Royal Commission for example – that have impacted this, there is also a feeling that we are seeing the end of a cycle that has confounded expectation for the last few years and we are entering a cooling market. The property cycle can also effect associated industries such as online classifieds companies that rely on property listings for revenue, as outlined here.

In a cooling market, it is important to find the areas where gains can be found. Avoiding areas where there is an oversupply is a key strategy; there is evidence to suggest that apartments in Melbourne’s centre fit this category. There is no doubt that investing in a cooling market requires more research and effort.

The property cycle can also effect associated industries such as online classifieds companies that rely on property listings for revenue.

Regardless of the stage of the property cycle, Accrue Real Estate has the expertise and market knowledge to help with to decide if the time is right for your property investment. Learn more about Melbourne property investment opportunities by contacting Accrue Real Estate today.

Parks and city access – investing in Kealba

Kealba

 

With a name derived from its two neighbouring suburbs, Keilor and St Albans, Kealba is a small suburb about 15 km from the CBD. Kealba has benefitted from the continued improvement of Melbourne’s freeway network and the city can be reached in around 20 minutes on the tollway. Being a small suburb, Kealba does not have its own railway station, but it is well serviced by buses and Keilor Plains station is a 5-minute trip away. Bus services also give access to St Albans station. The trip to the city on train is approximately 30 minutes. Melbourne airport is also a short drive away.

Originally called Kealba Views, the suburb experienced rapid growth in the 1970s. Its current population is made up primarily of established families and couples. Kealba is close to Keilor Downs Plaza, and for further retail therapy, Highpoint Shopping Centre is not too far away.

One of the key features of the area is Brimbank Park, part of which is within Kealba. The park which incorporates the Kealba Wetlands is a wonderful place for family picnics and barbeques, walking the dog or as a place for a run.

There are a number of schools in the area, including St Paul’s Catholic Primary School in Kealba itself. There are well regarded secondary colleges is surrounding suburbs, including Victoria University Secondary College, Overnewton Anglican Community College and Catholic Regional College St Albans.

With the median price for units under $425,000*, Kealba represents a great place for investment. With its close proximity to the city centre and parkland, Kealba could be the place for your next investment.

Kealba is just one of a number of Melbourne suburbs with property investment opportunities. Contact Accrue Real Estate to learn more.

*homesales.com.au, data from January, 2018.

Image from:
Map data © 2018 Google

Being a Landlord

Investing in Point Cook

 

Investing in property is a popular method for planning a financial future and many people have had success in doing this. Of course, an investment property comes with more than financial responsibility. You will need to decide whether you will utilise the services of a property manager or take on the role of landlord yourself.

Being a landlord may seem easy but there are considerations that are essential to ensuring you don’t fall into some common traps and wind up with unnecessary costs or problems.

Being a landlord is a legal responsibility. The lease signed by you and the tenant is a legally binding document. Sample agreements can be downloaded from Consumer Affairs Victoria; these outline responsibilities for both parties. The lease safeguards both parties, and for the landlord it protects an asset of considerable value. The lease is essential for enforcing terms should the tenant default and legal action is necessary. Even if you choose to rent your property to friends or people you know personally, it is wise to ensure a proper lease agreement is in place.

It is unlikely you will not have property insurance, but you need to ensure this policy covers your property if you are not the resident. Likewise, it is important to have specific landlord insurance, which can cover you for loss, theft or deliberate damage which happens during a tenancy. A landlord policy may also provide cover parts of the contents of your property, such as light fittings, blinds, carpet and permanent appliances such as a dishwasher. Importantly, most landlord insurance policies will offer protection for loss of rent if the lease is broken or the tenant does not pay the rent.

Like any other part of your investment plan, you should do the research as to whether being a landlord is suitable for you. As part of this research, head over to Accrue Real Estate’s blog to get a perspective on property managers.

While small in size, there’s lots of big things about Niddrie

 

In an ongoing series of Melbourne suburb profiles, Jeff Grochowski from Accrue Real Estate discusses the lifestyle and property investment potential of Niddrie.

While not officially recognised as a suburb until 1994, the area of Niddrie had been settled in the 1870’s and used predominately as farming land. The name ‘Niddrie’ originates from one of the original houses in the area, which was named for its owner’s birthplace in Scotland. Located just 13 kilometres north west from Melbourne’s CBD, Niddrie is a quiet suburb sandwiched between Essendon North and Keilor East.

The population of Niddrie is around 5,000 and the suburb is well serviced by public transport with tram Route 59 running along Keilor Road. This provides easy access to the CBD and all the suburbs in between. The seven bus routes that service the area make it very convenient to get around in Niddrie and the surrounding suburbs. This easy access to public transport makes Niddrie a great place for young and old alike and means the car can be left at home a little more often, helping the environment and the hip pocket.

While small in size, there’s lots of big things about the suburb of Niddrie. The Niddrie Shopping Precinct is popular and unique enough to have its very own website, which provides a trader directory and keeps everyone up-to-date with all the news and happenings of this vibrant locality. The Niddrie Shopping Precinct is located in Keilor Road and has over 180 local business owners. It offers a diversity in product and service that would leave bigger suburbs envious. Boasting “international culture, atmosphere and bargains”, the precinct covers shopping categories form automotive to wine and beverages, with everything from fashion, beauty, hardware and lifestyle in between.

The vast array of cafes and restaurants offer great venues if you need a break from all the shopping and the range and diversity of cuisine certainly keeps the foodies happy. Thai, Italian, Chinese, Turkish, Greek, Japanese, Mexican, Vietnamese, Portuguese and Spanish fare are all in close proximity – you can get hungry just from the aromas that escape the kitchens of Keilor Road. If more retail therapy is required, Niddrie is a short distance from both Essendon DFO and Westfield Shoppingtown in Airport West.

The housing styles of Niddrie are predominately weatherboard or brick veneer, reflecting the growth of the 1950s and 60s, but like all suburban Melbourne there are increasing numbers of quality multi-unit developments and new family homes. The area also provides residents with excellent parkland areas, including part of the popular Steele Creek Trail and Spring Gully, Rose Creek and Keaki Court Reserves.

While offering lifestyle opportunities that suit modern singles and young couples, Niddrie is particularly attractive to young families due to its proximity to a range of great schools – public and private – including Essendon North Primary, St John Bosco, St Bernard’s College, Buckle Park College, Ave Maria College and Penleigh and Essendon Grammar.

With its proximity to the city and airport and the range of lifestyle options it affords, Niddrie represents a great place for investment.

Contact Accrue Real Estate to learn more about Niddrie and other Melbourne property investment opportunities.

The most popular place to be: Investing in Point Cook

Investing in Point Cook

 

In an ongoing series of Melbourne suburb profiles, Jeff Grochowski from Accrue Real Estate discusses the lifestyle and property investment potential of Point Cook.

Topping the 2017 list of most popular suburbs for house sales, Point Cook is an outer suburb still growing through land release and development. The Central Flying School opened at Point Cook in 1914 – this went on to become the home of the the Australian Flying Corps and the Royal Australian Air Force, the second oldest air force in the world. A museum is now located at this site. Later growth occurred after World War 1 when the area was used as market gardens. Major growth did not occur until the 1990’s; this development continues.

The great thing about this rapid development is that is has also included the development of facilities to make Point Cook a great place for families and singles. New schools and new shopping precincts have been added to the area without the loss of the parks and reserves that provide the suburb with the community and country feel.

Key to Point Cook’s growth is the freeway that provides easy access to the CDB, which is only 26kms away. The suburb is also close to Altona Beach and Werribee Plaza but it also has its own coastal park and neat local shopping hub. This means Point Cook can offer a modern lifestyle for singles and families.

Being a newer suburb, the architecture is mainly contemporary but the range of styles is diverse enough to suit any taste. There are a number of schools, both primary and secondary, allowing families plenty of choice.

With the median price for a 2-bedroom unit under $380,000 and a 3-bedroom unit at $4735,000*, Point Cook represents a great place for investment. The continued interest in the area is likely to keep rental demand high and provide a diversity of tenant.

With its lifestyle options and development potential, Point Cook could be the place for your next investment.

Contact Accrue Real Estate to learn more about Point Cook and other Melbourne property investment opportunities.

*realestate.com, updated April 23rd, 2018.

Image attribution: Point Cook – This image was originally posted to Flickr by Rexness at https://flickr.com/photos/25287507@N02/5092058664