Top Tips For The Property Investor

New to property investing? Read our top tips for the property investor, including what you should know before investing in property. There are many pitfalls to avoid when investing in property and they can be minimised or avoided by understanding the key things which will make your investment journey successful.

1. Location...Location...Location

Try to do as much research as you can on the area you plan to invest in. The most important thing for long term capital growth and strong rental demand is to be near services i.e; public transport, schools, shopping, recreation areas, hospitals etc. The more boxes you can tick the more demand there will be for your property. That ensures you’ll make the most of the rental yield and resale value.

Implications for Borrowers

The mortgage wars, while initially sounding like a battle confined to the financial sector, have significant implications for borrowers. As competition intensifies among banks, we can expect to see more attractive loan offers, including lower interest rates, reduced fees, and potentially more flexible lending criteria. For owner-occupiers, this is great news, but for investors, it's an opportunity to supercharge their property portfolios. options.

Why Investors Should Pay Attention

Lower mortgage rates translate directly to lower monthly repayments, but more importantly, they increase borrowing capacity. For example, a reduction of just 0.25% in interest rates can save thousands of dollars over the life of a loan. Investors looking to capitalize on the excellent growth prospects in South East Queensland—where property values have been climbing steadily—will find themselves in a stronger position to secure finance for multiple properties or higher-value investments.

The Booming South East Queensland Property Market

South East Queensland is experiencing a property boom, driven by several key factors:

• Infrastructure Development: Significant projects like the Cross River Rail, Brisbane Metro, and preparations for the 2032 Olympic Games are boosting economic growth and employment opportunities.
• Population Growth: The region has seen a surge in interstate migration, particularly from New South Wales and Victoria, attracted by the more affordable housing and lifestyle factors.
• Economic Resilience: Queensland's economy has remained robust, with strong performances in sectors like mining, agriculture, and tourism.

What to Expect Moving Forward

As the mortgage wars unfold, it's likely that we will see further rate cuts and incentives from other banks, all eager to attract a larger share of the mortgage market. This competition will create a more favourable environment for borrowers, making it easier for investors to access the funds they need to expand their portfolios.

Investors should also watch for:

• Cashback Offers: Some banks may offer cashback deals as an incentive for new borrowers or those refinancing existing loans.
• Flexible Loan Features: Enhanced features like offset accounts, redraw facilities, and interest-only payment options can provide additional financial flexibility.
• Eased Lending Criteria: In a bid to attract more customers, banks might relax some of their lending requirements, making it easier for investors with diverse financial backgrounds to secure loans.

Strategies for Investors

To make the most of this favourable environment, investors should consider:

• Refinancing Existing Loans: Take advantage of lower rates to reduce repayments or free up equity for additional investments.
• Diversifying Portfolios: Explore different property types or locations within South East Queensland to spread risk.
• Long-Term Planning: Consider the potential for future rate increases and ensure that investments remain viable under different economic conditions.
  
  

The mortgage wars represent a golden opportunity for investors, particularly those focused on the booming South East Queensland property market. By taking advantage of lower rates and increased borrowing capacity, investors can position themselves to reap the benefits of the region's strong growth trajectory. However, due diligence is crucial. Investors should conduct thorough market research, consult financial advisors, and consider long-term strategies to navigate the dynamic property landscape effectively.

Speak to a mortgage broker about your options and get an understanding about LMI and how it works. For property investors LMI allows you to have higher borrowing ratios, giving you the opportunity to maximise negative gearing benefits. But, if you do have access to a deposit of 20% or more, you won’t need LMI. So which is the better option for you? To put more cash into your investment and avoid the insurance or put down a smaller deposit, take the mandatory insurance and keep some cash for another investment? It is well worth taking professional advice on the best use of your cash.

5. Equity Or Cash

Using a line of credit or extracting some cash from an existing property makes good use of your equity because it often gives people who do not have a cash deposit the chance to get into the investment market. But, you should always avoid putting your family home up as security (which, by the way, is called cross collateralising.) Once again, do get proper financial advice on your options.

6. New VS Old And Renovate

New properties have the advantage of being eligible for depreciation tax relief. They are also much more desirable for tenants and require less maintenance. However, don’t discount older properties entirely as long as you are prepared to manage potential pitfalls.

7. Long Term Plan

Very rarely is investing in property a get rich quick scheme. You can’t rely on property prices rising as soon as you’ve bought! In reality the longer you can afford to keep an investment property and build up substantial equity the better.

Don't wait to invest - Invest then wait

Schedule Your Financial Health Check