Resident money expert Luke Laretive recently sat down with property specialist Julian Muldoon of Property Way to discuss everything a man needs to know about buying property in Sydney, Melbourne and major Australian capital cities without going broke.
Here’s the crucial advice you need before dropping large on a deposit that could make or break your future.
Luke Laretive: Is it a good time to buy now?
Julian Muldoon: A better question is, is it a good time for you to buy? It’s always a good time to buy somewhere, so keep your options open to all capital cities gives you the best chance to succeed. Just don’t follow the herd!
LL: What is the first step in finding an investment property?
JM: Understanding your capacity, not only to borrow, but also to fund the monthly repayments now and into the future. Once this is taken care of, sitting in a controlled environment to put a plan in place of what you are trying to achieve, before getting online or attending auctions.
It’s one of the largest investment decisions most people make, yet many research their new car more than their real estate purchase. It’s so important to understand the game before you decide to play.
“Many investors get caught up in the hype and hysteria that can surround an area.”
LL: How can I locate the next ‘boom’ area?
JM: Many investors get caught up in the hype and hysteria that can surround an area. Remember, its either on the radar because of growth that has already taken place, or speculation of what’s to come, which may not materialise. Be careful, many property investment ‘gurus’ will say they have the secret formula for picking the next hot spot.
The best way to succeed in my experience, is to apply the basic principles of a sound property investment. I’ll always be focusing on a mix of factors for clients – land size, location, demographic demands, quality of dwelling, school zones, infrastructure investment and the price, just to name a few.
Stay clear of areas that lack a diversified economy or properties that only have one re-sale market and prospective tenant.
LL: Is it possible to pick the property market cycles?
JM: Many think they can, but let’s be honest with so many voices and opinions out there someone is going to get it right and many more will get it wrong.
We do know that property markets need strong job growth and a competitive market place to grow. So, look for areas with a strong economy, limited houses for sale and rent, low supply and a growing population.
LL: Any suggestions for bidding at auction?
JM: Have a plan. Stick to your plan. Too many pay more than they should at auctions and for good reason, that’s what they are supposed to do, encourage emotional buying, and they work. Run your numbers, know what you can afford and know the value of the property.