You make your money when you buy, but you make more money when you proactively review and manage what you’ve bought. Some investors adopt a “set and forget” mentality with property. This is a dangerous strategy, as there are many things that can change over time and affect the performance of your investment.
BY RICH HARVEY
To minimise risk and accelerate the growth of your property portfolio, it’s critical that you take an active interest and involvement in each property you hold. Let’s examine seven myths that some investors and homebuyers believe, and what you can do to improve your portfolio.
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Meeting and keeping a good tenant for your investment property is a lot like the trials and tribulations of dating. There’s the initial nervous anticipation as you set out to find someone, the excitement of getting to know them, the dizzying highs of finding “the one”, and – if you’re lucky – the satisfaction of a long and happy relationship.
BY SHANNON MOLLOY
My first foray into the role of landlord was a whirlwind romance. The sign went up out the front of my first property after I decided to move on to a new renovation project. Within 24 hours, I’d found my perfect match.
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One Christmas morning, we had just started opening presents when the phone rang. There was a bushfire and all hands were needed. My father left and our lamb roast quickly became sandwiches for the firefighters. At 3pm, we heard someone had been killed. At 8pm, dad came home. He had been putting out spot fires.
BY JANE SLACK-SMITH
In a tight-knit farming community, that day was a heavy blow – particularly for the family whose world was changed forever. In addition to the emotional pain and loss, they also lost their only breadwinner.
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Now that we’re a quarter of the way through the year and our property markets have had a chance to show their hand, it’s probably a good time to see how property is performing.
BY MICHAEL YARDNEY
RP Data has reported its March quarter house price index results and the findings were encouraging.
Once again, the latest stats will disappoint the doomsayers who frequent the property forums and for the last four years have been predicting an apocalypse.
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A good friend just bought her first property, in the form of a rundown renovator’s dream in inner-Brisbane. She’s keen to get stuck in straight away, with grand plans for a full-scale overhaul, but when I asked about her project budget she just gave me a blank stare. Oops… she doesn’t have one.
BY SHANNON MOLLOY
My friend’s brave foray into the world of renovation reminded me of my own early experiences. When I embarked on my first project, I was a typical 20-year-old: ambitious, but totally clueless. Over the next two years, I fumbled my way through with no plan, no budget, no contingency and no idea.
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With a little over one quarter of the year gone, I think it’s an opportune time to check on the progress of the property market, based on a number of key indicators provided by RP Data. I have also added some comments on what we need to see happen to these key indicators to give us a sign that the property market is improving.
BY PETER KOULIZOS
Days on market
The average time it takes to sell a house or unit has increased in the past year. Twelve months ago, it took on average 75 days to sell a house and 65 days to sell a unit. Fast-forward to today and the time taken to sell property has increased. It’s now taking on average 78 days to sell a house and 67 days to sell a unit. The days on market needs to decrease to give us a sign that the property market is improving.
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There are some things we just take for granted. Like the ability to buy and sell a car or a home.
BY MICHAEL YARDNEY
Sure we sometimes complain that properties are expensive, but we just expect to be able to buy or sell something we own.
However, it’s not that way everywhere in the world.
When Fidel Castro took power in Cuba in 1959, he placed a ban on property sales, which has been in effect until late last year, when the purchasing and selling of private property was legalised by President Raul Castro in a bid to keep the struggling Communist state afloat.
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Every investor who bought in the mining boom town of Moranbah last year seemed to be doing very well. I watched as prices went up, rents skyrocketed and average mum and dads hit the jackpot. Then, last month, the bubble finally burst.
BY LAUREN CROSS
I wrote a blog about a month ago, asking if mining towns are really that risky.
Well, as it turns out – they are!
And it’s the seemingly safe and mighty mining town of Moranbah that has come crashing down before anyone even saw it coming. Who would have thought that a town with at least five future planned mines, (see page 24 of this document for details) would currently be a place where landlords can’t get rent. Before Christmas, properties were achieving up to $3000 per week in rent. Now, a standoff between landlords and mining giant BHP Billiton Mitsubishi Alliance (BMA) is resulting in dozens of vacant homes (there are currently 121 listings on realestate.com.au).
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Some agents seem to delight in making it difficult for novice homebuyers, as the story below reveals.
BY TIM O’DWYER
The whistle-blowing agent here was not known to me and his detailed account (slightly edited) arrived completely unsolicited. I subsequently phoned him and suggested that, for what it might be worth, he should personally report the whole matter to the Office of Fair Trading. But don’t hold your breath, I added. Here is the letter;
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Our property markets started the year in a tug of war, caught between falling interest rates on the one hand and market uncertainty on the other. Now that we’re almost a quarter of the way through the year, it’s worth reviewing what’s really going on in the property markets and what’s ahead for the rest of the year.
BY MICHAEL YARDNEY
Commsec economist Craig James is calling Australia the boom and gloom economy. On the one hand our economy is still growing – unlike many others, especially in Europe – and underpinned by a mining boom. But on the other hand, consumers and businesses are gloomy. It’s much the same with property – some areas are faring well, but many aren’t.
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