Inflation is showing no signs of slowing down, but this is not necessarily bad news for landlords.
Property investments can be a haven for investors and offer unique potential benefits, including rising rental income.
But, savvy investors will want to grow their portfolios quickly to take advantage of the current inflationary environment.
Here, we’ll help you to manage your next investment purchase with more speed and ease from property search through to settlement.
1. Narrow down your property search
While more choice can be a wonderful thing, too much choice can lead to inaction.
Consider aspect and proximity to schools or public transport when buying property as an investment.
Frank Valentic, director of Advantage Property Consulting, says to avoid having a long list of “must-haves” and instead pick 7 to 10 key features.
“The first three are, of course, location, location, location,” he says
“You need a location close to shops, a location close to transport, and a location close to schools.”
Other top features that are “non-negotiable” in his view are car parking, an outdoor area, size, a functional floor plan, and a good aspect. But think about whether your top features might include something specific, such as a flat block or a garden, if you have pets.
Don’t waste time looking at properties that don’t tick your boxes, Valentic adds.
2. Consider a buyer’s agent
Outsourcing is a smart move when locating new properties for your portfolio and you simply don’t have the time to dedicate to the process.
If you specify your criteria, a buyer’s agent can do the heavy lifting for you searching for properties.
Some buyers’ advocates specialise in investment properties and will know the market well and be able to move quickly.
“It’s important to get an experienced buyer’s agent, as they need to have those established contacts and relationships,” Valentic explains.
“An experienced buyer’s agent should speed up your property journey and save you time, money, and also the stress and hassle associated with negotiating.”
Most good buyer agents will also have a shortlist of investment-grade properties ready to go, including properties off-market, which could offer exceptional value, he adds.
Additionally, the cost of an agent is claimable and can be offset against your profits when you sell.
3. Consider a market you don’t know
Sometimes local buyers can get too granular with their non-negotiable criteria where it has little or no bearing on a property’s investment potential.
Regional or interstate markets may offer greater bang for buck.
Buying in an interstate or regional market can be a much speedier process, as you won’t find yourself getting bogged down in the nitty-gritty, which can sometimes happen if you know a market too well.
Interstate and regional markets can offer more affordable investments, making them potentially easier to break into compared to big cities like Melbourne and Sydney.
“It can be advantageous, especially if you’ve got a lower budget,” Valentic says.
“But I do put a caveat on that, you really have to do proper due diligence and research before you buy into another state or in unknown markets. You do not want a lemon.”
4. Look for a fast & efficient lender
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Traditional lenders are not necessarily the only or best option for investors to get a home loan.
Instead of going to the big four banks, Valentic suggests investors should check out younger, more dynamic lenders like Nano digital home loans.
“I recently used a smaller lender for some of my loans,” he says.
“They’re much more adaptable, and you’re genuinely getting lower, more competitive interest rates, with no fees or charges unlike the bigger banks who often have extra fees and charges throw in, so it’s not just about the interest rate.”
Nano has competitive interest rates and no fees at all – except for the mandatory government charges like stamp duty – meaning more money for investors to pay down their loan faster. You can even opt to have your tenant pay their rent, along with your salary and savings, directly into an offset sub-account to cover your repayment and reduce the interest you pay on your home loan.
They can also approve loans within minutes, not weeks, meaning less stress and anxiety (not to mention paperwork) for investors during the settlement period.
All pictures courtesy of realestate.com.au.
The Nano Card is issued by Hay Limited ABN 34 629 037 403 (Australian Financial Services Licence 515459). See terms and conditions.
This article was originally published on 8 Jul 2022 at 5:00pm but has been regularly updated to keep the information current.
