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What these low interest rates mean for you!


The decision today by The Reserve Bank of Australia to keep the official cash rate at 2.25%, will continue to drive the current wildfire in the property market.
What will this mean for you?

Last month’s decision has definitely impacted all areas of the property market: renters, investors, buyers and sellers. I wanted to share with you my thoughts on how we will see the playing field continually change in these areas.

Vendors

These low rates should bring a new flood of buyers and investors into the market. The low rates will possibly encourage prospective buyers to bring forward their purchase decision to beat any perceived rush, and could also support buyers’ decisions to revise their budget upwards given the lower rates on offer.

The increase in competition, will see prices strengthen.

Buyers

There are definite noticeable benefits for buyers. This decision has huge monthly savings for buyers in their repayment which, over a year, you can really start to see add up and help out.

With this decision and conditions now even better, we will see more people come into the market. The market is already very strong.  With this rate drop, we will see the numbers of buyers and investors in the market continue to rise.

Landlords

The low rates offers a great opportunity for Landlords to review your property portfolio and your personal investment strategy. There will be an increase in the number of home buyers and investors, and the time will be good to capitalise on this and perhaps think about selling and upgrading.

Tenants

For some, the low interest rates could be very stimulating. This could be the incentive they need to dive into becoming a home owner!

No matter where you find yourself in the property life cycle, there is no denying that these low interest rates are creating some exciting opportunities. With the best market conditions we have ever seen, it’s a fantastic time to make your next move in property.


9 Tips EVERY Property Investor Needs To Know To Make The Most Of 2015

2015 is a year where the Australian economy is set to slow down, interest rates will remain low and some property markets are expected to show price growth – again.

How can you make the most of these market conditions in 2015?

1. Review your existing property portfolio.

2015 is a great time to review your excising property portfolio.

It's important to periodically review your property portfolio to make sure it is:
  • Performing
  • Helping you achieve your goals
  • Helping you achieve financial independence
  • It's also important to systematically weigh up the pros and cons of each property in your portfolio.

You can do this by asking yourself the following questions:
  • Is my portfolio helping me achieve my goals?
  • Is my portfolio balanced?
  • Am I getting the returns I desire?
  • Have I maximised my rental yield?
  • Can I manufacture additional capital gains?
  • Are my properties owned in the right structure?
  • Do I have the most competitive interest rate?
2. Identify a clear property investment strategy.

A clear investment strategy is the key to building a multi-million dollar property portfolio and achieving your lifestyle goals faster.

The first step in the process is to identify where you are right now, where you want to be and what’s holding you back from achieving your goals.

In 2015 you need to get clear on what you want and set investment rules around future purchases. This will help you filter through unqualified properties and keep you focused on what’s important.

3. Review your current financial position and develop a finance strategy.

Ask yourself the following questions to get an idea of your current financial position:
  • Is my current financial structure working for you?
  • Do I have equity I can access?
  • Should I look at refinancing my loans?
  • Do I have a competitive interest rate?
  • Do I use multiple lenders?
  • Are my loans cross secured or stand alone?
  • Can I access finance? If not, do you know what you need to do in order to get finance? 
  • How will the current properties I own affect future purchases?
4. Review you current ownership structure and develop an asset protection strategy.

The correct ownership structure and asset protection strategy is vital to achieving your long term goals. It’s important to create a structure which protects your assets and maximises your returns. 

You can review your structure by sitting down with your accountant to discuss your existing structure and plans for the future.

5. Buy better properties in 2015.

The next step is to implement your property investment strategy.

To build a multi-million dollar property portfolio in 2015 you need to understand the relationship between each property you own and your long term goals. 

Gone are the good old days where you could buy an unlimited number of properties if they were positively geared and you could expect your property to double in value every 7 – 10 years. 

In 2015 you have to be strategic, educated and focused.

Sit down with your Mortgage Broker, Accountant, Solicitor and Buyers Agent and make sure your next property purchase aligns with your long term goals.

6. Add value to your existing property portfolio.

The sixth step in the process is to increase the return on your current investments.

Unfortunately many investors over look this step, but it’s vital to moving forward faster.

Do you have properties in your portfolio with untapped potential?

Would a basic cosmetic renovation allow you to improve your loan to value ratio, create instant equity, improve your rental yield and buy your next property sooner? 

2015 would be a great year to review and add value to your existing property portfolio.

7. Manage your properties better in 2015.

A great property management team is vital in achieving your long term goals. It’s important to find a proactive property manager who will treat your investment and your returns like they would their own. If your property manager did not increase your tenants rent in the last 12 months then it’s time to begin looking elsewhere.

8. Review your tax depreciation benefits.

If you don’t already have tax depreciation schedules set up for each of your investment properties make sure you get this sorted out in 2015. 

It’s important to create a schedule which protects your assets and maximises your returns. 

9. Re-invest your profits and repeat this process again in 2016.

The final step is to re-invest your profits.

There are fantastic buying opportunities available to savvy investors in 2015. 

Take the time to identify growth markets and identify quality properties that align with your longer term lifestyle goals.

Good luck!