Building Equity In the Property Market
In an article for the website Your Investment Property, Miriam Bell decodes the best ways to create quick equity. The Buy and Hold strategy can work well and can help in building equity fast if a few smart property market techniques are diligently followed.
The strategies Bell discusses are propounded by Jane Slack-Smith, founder of Your Property Success. The first idea offered by him is to invest in areas that have the right kind of demand, growth potential and inherent infrastructure. I could not have agreed more with this.
….and so do bargain deals
Buying below existing market rates is another smart idea. For this, argues Bell, it is significant to figure out those locations where bargain deals are possible. Even a 10% discount can offset months’ renovation costs.
The third trick is to compound value of your property through renovation and development.
You can read the original article here.
I agree with all the points and the first one is especially all-encompassing. Once you invest in an area with growth potential you automatically give yourself a good chance with capital growth. Moreover, the mining bust has already taught us a big lesson- it is always better to invest in locations with diverse factors of growth. Put another way, it is safe to invest in areas having multiple-industry economy.
The second point is no less interesting. It is another matter that fixer-upper deals can have a lot of hidden costs. It is prudent to conduct a thorough pre-purchase investigation of a property; it may pay to hire a conveyancer to go through the pre-settlement contract in such cases.
Single lender versus multiple lenders
I also advise my clients not to get all their loans serviced through a single lender as this can result in crash of equity. Just imagine if you are with multiple lenders, won’t you be in a position to release the equity which has shown capital gains? This can’t be the case with ‘single lender’ loans. Moreover, the threat of cross-collateralisation is always there in case of a single lender.
If you are located anywhere in Sydney, feel free to give me a call. We can talk about your dream purchase/investment property. Believe me; a seasoned buyer’s agent can make a difference.