Property investing strategies, topics and specialties

Things you should know before investing in property

This section’s got resources and strategies you’ll come across in property investing. It’s up to you to choose which strategy suits you, they all have their pros and cons. The hundreds of people in Property Gurus use or recommend various strategies. The gurus are rated yellow, green or red depending on pros and cons I’ve found and if they use riskier or more questionable strategies.

Here’s the Queensland government’s useful Guide explained in Guide To Relieve Real Estate “Stress & Heartache”
In a 2010 article Wealth Magazine (no longer available) “Scam Alert”, highly regarded property investment adviser, Margaret Lomas, warned about unsubstantiated claims concerning:

  • Wraps
  • Renovating
  • Buying overseas
  • Investment Clubs
  • Contracts with a ‘rebate’More than one company
  • Cash flow mortgages

These forums and sites might help you understand the industry and choose your strategy:

  • InvestChat (now part of PropertyChat) is a forum where you can chat with and ask questions of investors and expert members.
  • PropertyChat (replacing Somersoft Property Investors Forums) where you can ask investing questions and investors share their experiences, tips and resources.
  • Investopedia (USA) – definitions etc

Here’s our top pick of property investment topics and strategies

How to get started in property investing| Property Investing Courses, Seminars and Spruikers - Tips and Traps

Your local real estate agent, like many of the Property Gurus we’ve listed on BiG, offer investing services, advice and courses. Check out their reviews, testimonials, and any of the pros and cons we’ve found. But the choice is up to you.
Do a search on BiG for any you’re thinking of using, check them out too in BiG’s Guru Cops, Analysts and Commentators and any relevant Blogs.

How to spot a property investing scam – Finder. They say: “Not all property seminars are scams, but these 7 tips will help you separate the experts from the charlatans.7 signs of a property scam:

1. Have they got an offer for you!
2. The long sales spiel
3. Build your way to wealth
4. Up-and-coming investment suburbs
5. All under control
6. All managed for you
7. Clever mortgage structure

Avoiding the property investing scams. Organisations or associations whom you can contact for advice”

The Wolves Have Returned – John Lindeman, The Lindeman Reports

Property Investment Courses I Are they Worth the Investment? PropertyChat Forum Thread

Destiny, Margaret Lomas: Course (online) Essential Property Education and Margaret Lomas “20 Must Ask Questions for Every Property Investor” Book YouTube Series Margaret Lomas’s 20 Must Ask Questions | Question # 1

Switzer Home Loans FREE eBooks on property investing:

    • The Guide to Property for Homeowners
    • How to maximise the return on your investment
    • 4 things you must do if you’re buying property in 2015
    • Negative gearing explained
    • 4 ways to pay off your mortgage faster
    • Finding the right home loan – what everybody needs to know
      • The Switzer Guide to Property Investing
      • The SMSF Guide to Property Investing

7 things to do before investing by Nila Sweeney – realestate.com.au

Blue Wealth Property Research methodology

ANALYSING and BUYING PROPERTY| Location, Location, Location| "Hot Spots" - Property Research, Tools and Investing Analysis| Auctions - Pros and Cons|Groups and Forums
  • Location, location, location, Hot Spots… Property buying and investing analysis, research and tools

As you’re deciding if, or what property you buy – a home or an investment now or later, where you buy is crucial (you’ll find stuff on what and for how much in other parts here in Property Investing Strategies and Topics and in various BiG Blogs on property).
There’s an endless supply of ‘experts’ ready to advise you on the Top 10 suburbs, best growth areas, demographics and on and on.
Maybe you get advice from friends, other investors or a local agent. Property investing might not seem like rocket science, but one of the biggest mistakes you could make is not doing proper research and getting unbiased and trustworthy advice.
But don’t panic, procrastinate and get so overwhelmed that you end up doing nothing. Stuff like this might help you: Identifying with your future self can help overcome the tendency to procrastinate – Science Of The Spirit [USA], SOTT.net; Inside The Mind Of A Master Procrastinator [YouTube, TED Talk] and The Procrastination Matrix -Tim Urban [USA]: Wait But Why; and the Cost of Procrastination – Jeremy Sheppard, DSRData.
Here are just a few popular analysts and forecasters to choose between, to help you decide your own path (good luck!):

Number Crunching. How to Understand Property Data – Aidan Devine, YIP

  • Property Buying and Investing Groups and Forums

To help you work out who to trust check out the discussions by investors in the many property investing community groups and forums. They often discuss and share their experiences of ‘experts’ and generously share their ideas, tips and tools, have spreadsheets for analysing property and keeping track of your investment portfolio and more.
Many are free to join you’ll also find businesses with their own devotees and property analysis tools. BEWARE of testimonials and if you subscribe, unsubscribe in time after any Free Trial and before any PAID subscription starts or rolls over.  It can be almost impossible to get refunds.
Some popular groups and sites are:

    • Property Chat (replacing Somersoft Property Investors Forums) see the Forums and threads such “Buying, Selling and Managing Property > Property Information Resources & Tools
    • Somersoft PIA (Property Investment Analysis) Software. They claim: “Our Property Investment Analysis (PIA) program is an essential decision tool for investors. It will analyse the capital growth, cash flows, and tax implications for any investment property and provide instant feedback on the projected after-tax cost and rate of return. The software will compute cash flow projections for up to 40 years and has facilities for changing more than 100 variables including property price, rent, capital growth, inflation, deposit, loan type, etc. The internal rate of return (IRR) and the cost-per-week are recalculated automatically whenever a change is made.”
    • DestinyLive – Margaret Lomas They claim: “DestinyLive is a comprehensive resource and powerful tool set for anyone investing in property, brought to you by Australia’s leading property investment company, Destiny is a pioneer in the Property Investment Industry and has been in business for more than 24 years. Destiny provide you with the education, support and tools you’ll need to become a successful property investor. Destiny are an advice only company. They do not sell property, promote property developments or act as a buyers or sellers agent. All of Destiny’s Property Investment Advisers are Qualified Property Investment Advisers (QPIA®). Margaret Lomas is the creator, host and producer of the Web TV property investment shows ‘Property Investing Matters’ and ‘Under the Spotlight’ which can be viewed via the My Property TV (mypropertytv.com.au) website. In addition to being one of Australia’s most recognised and respected Property Experts, Margaret is the best-selling author of 9 Property Investment books, including titles such as ‘How to Achieve Property Success’, ‘Investing In The Right Property Now!’ and ’20 Must Ask Questions® for Every Property Investor’.”
Adding Value to a property| Renovating, Developing, Changing use, Subdividing, Community or Strata Titling, Land banking
Affordability/Housing affordability
Buy and Hold
Invest smart and don’t buy into buyer frenzy by Margaret Lomas – Switzer Home Loans

Buy and hold Steve McKnight

Property Myths eg Property doubles in value every 7-10 yrs

Far from the madding property crowd – Margaret Lomas, Destiny – on false media analysis, forecasting and reporting on booms, busts and more.

10 Highly Dangerous ‘Tips’ Investors Get – Margaret Lomas, Destiny in YIP

Bad Financial Advice – Jeremy Sheppard, DSRData Debunking “6 Myths” suggested by others: Don’t wait till you’re ready; Interest rates aren’t low; You’ll never go bankrupt; Nobody’s trying to sell you anything; You can afford it”

Property Doubles Every 7 to 10 years

How long does it take for your property to double in value? By Nila Sweeney – interviews Cameron Kusher, Margaret Lomas, Michael Yardney

MoneySmart (ASIC) Investing and Tax: “Negative gearing is where you borrow to invest and the investment income is less than the cost of the investment. Investors negatively gear as they can generally claim a tax deduction for the investment loss. The aim is for the capital growth to offset the loss in earlier years. If you’re making an investment loss, it is still costing you money. You’ll need to have cash from other sources, like your salary, to cover interest and expenses.”

Capital Growth (vs Yield)
Creative Finance
Buying ‘wholesale’ or at a discount (e.g. foreclosures/distressed properties/mortgagee sales)

Cash backs and Rebates

Cash flow mortgages

‘No money down’

Option contracts

Instalment contracts/Rent to buy/’ Wraps’ (a.k.a. Vendor Finance/Instalment Sales Contracts)

Vendor finance – An introduction to vendor finance for real estate in Australia by Cordato Partners (lawyers)

Cons:

“We Buy Houses” claims from rent to buy promoters prompts fine” by Jennifer Duke – Property Observer

Property spruikers under investigation by state governments amid rent-to-buy and vendor finance deal concerns

Gearing| Negative and Positive gearing, Positive cash flow

Investing and tax. How income from your investments is taxed. – MoneySmart (ASIC)
Positive and negative gearing: Comparing the two! – MWC Group

  • Negative gearing:

The politics of negative gearing:

There’s no longer a great tax incentive for negative gearing – Noel Whittaker, SMH
How does negative gearing work? – Peter Koulizos
Negative gearing – friend or foe? – Steve McKnight

Positive gearing

Positive cash flow

Niche properties| Rent Guarantees| Apartments, Commercial, Defence (DHA), Holiday homes, House-land packages, NRAS, Overseas, Retirement, Student accommodation, Timeshare
    1.  Benefits of investing in overseas property
    2.  What are the risks of investing in overseas property?
    3.  How can I finance an overseas purchase?
    4.  How to maximise your investment
    5.  What are some popular investment locations outside Australia?
    6.  Compare the latest investor mortgage rates
Rent vs Buy

Rent or Buy Calculator – Your Mortgage. They say: “This calculator shows you how your finances will look seven years after buying a home or continuing to rent, allowing you to make an informed decision between the two.”

Renting vs Buying. Which is better? – Canstar

Cheaper to rent than buy? The debate continues by David Potts – SMH

Buying Or Renting: Which Is The Right Choice For You? by Property Man APM

Structuring buying and owning property| Superannuation, Companies, Trusts, Property Syndicates, Joint Ventures, Tenants in Common, Joint Tenancies etc

Margaret Lomas of Destiny has brilliant free resources – Vidcasts, Podcasts and more covering many of these issues.

  • Companies
  • Joint ventures (JVs) (see below Tenants in Common)
  • Property syndicates (see below Tenants in Common)
  • Property trusts/Listed property
  • Self-Managed Superannuation Funds (SMSF)

SMSFs and Property MoneySmart (ASIC)
Buying property through self-managed super funds has its pitfalls by Kate Jones “SMSFs are being targeted by sophisticated fraudsters who go to great lengths to deceive, including sending information packs to victims and setting up fake websites to appear legit. In a speech at the Self-Managed Superannuation Professionals’ Association of Australia last year, Australian Crime Commission executive director David Lacey said up to 10 victims a week in Australia were losing savings from $35,000 to $4 million.”

Buying Property With A Self-Managed Super Fund (SMSF) by Real Estate Investar

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Disclaimer: The information and comments in this site are general in nature, opinion only and don’t take your personal financial circumstances into account. Our aim is purely to educate you and show you people and organisations in the finance and investing industries you may, or may not, choose to contact for personal financial advice. Any claims or comments of others are strictly those of the cited individual and not endorsed by Andrea or Best investment Gurus. Before you take any financial or investing action or buy any service or product - get your own independent financial advice, tailored to your specific needs.

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