Inside Your Investments – Placing Your Finances as a Homeowner

We’ve all heard the term ‘dead money’. If you have equity in your home and are not utilizing it to seed and grow your investment portfolio, then dead money is exactly what you have. A common mentality among the rich is to continually be investing capital to perpetuate financial growth to ensure a comfortable future.

There are numerous investment strategies which are touted as being the safest and/or most profitable vehicles to grow wealth including the two most common – property and shares.

Shares vs Property

Property

In the eastern states of Australia, affordable rental properties are always in demand, and by securing expert property management in Melbourne or Sydney, where your investment is well managed and cost-effective, you can be building a solid investment portfolio. With property prices stalling and negative gearing under possible threat for future home purchases, the time to buy is now!

The way it works for many investors with substantial property portfolios, is to purchase a single property and either add value through renovations or wait until the property increases in value over time. Once there is enough equity in the property, use that as collateral to purchase a second property and then a third and so on – their own personal monopoly game.

One word of warning I would give is to careful consider investing in inner-city apartments in multi storey tower blocks. Instead look for house and land near infrastructure and amenities – see below.

Shares

Some investment gurus, often with a vested interest in selling you a particular product or stock, may advise you to invest your money in shares. They often use the logic that you can’t sell off a small piece of land if you need some fast cash but you can quickly cash in shares. What they don’t happen to spend much time focusing on, is that if the market drops or crashes, your money can literally vanish into thin air.

Tax is another thing which can take a bite out of share profits. Unless you have swathes of cash to burn, shares are best left to moderate investments.

The Key to Property Investing

The most crucial part of the process is to purchase properties whose rental income covers or almost covers the mortgage repayments and secondly, those which have a high tenancy rate to ensure steady income. This is where property managers are key factors in sourcing, securing and servicing the needs of outstanding tenants – with fees ranging around four percent of the rental yield, it is a small price to pay for the service provided which includes:

  • Marketing and advertising
  • Attending inspections
  • Organising maintenance and repairs
  • Receiving and monitoring rental income
  • Organising mandatory fire equipment checks and other legal requirements
  • Conducting regular property inspections

So what should you be looking for in a rental property? Easy, you should be looking for the things a tenant would prioritise.

Solid ground

People will always need homes to rent. The trick is for an investor s to identify a desirable property by thoroughly researching the rental market. Look for:

Affordability

Crunch you numbers. It seems simple to buy a cheap home but many investors fall into the trap of paying more for a property than the rent can cover the repayments. Remember, you must plan for every contingency and the property may not be producing a rental yield for weeks at a time.

Infrastructure

A property which is located walking distance to schools, universities, transport, shops and medical facilities, will be a far more rentable prospect than a one which is not.

Low Maintenance

Wiring, plumbing and heating units can be some of the big ticket repairs landlords will have to fork out for. When buying an older property, ensure these units are contemporary and well serviced.

Gardens should be drought-resistant and attractive yet minimalistic. Tenants are generally less house-proud than owner-occupiers.

Features

Unlike homeowners, tenants are less attracted by large blocks of land which they may have to maintain. Likewise things such as swimming pools may be fine on luxury properties but can be expensive or difficult for a tenant to take care of. They also require conformity to stringent regulations around fencing etc. and can be more of a headache than an attraction.

Look for properties which offer a little bit extra or features such as:

  • Ducted heating
  • Dishwasher
  • Garage
  • Ensuite

Types of housing

Whilst it can be tempting to look at apartments or units as a cheap investment prospect, you are limited as to your ability to develop or add value to these types of properties. Beware of hidden exorbitant body corporate fees, particularly in complexes which offer selling points such as gymnasiums and swimming pools – many investors have been burned by the ongoing costs of these properties.

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Investing has long been recognized as the best way to grow wealth. Done wisely and with a great deal of research and planning, investing in property may be the key to secure a comfortable and prosperous retirement.

Real Estate Investment Strategies For The New Investor

If you have heard about the incredible financial benefits associated with real estate investing, you may eager to make your first investment. While real estate investments can be risky, they also have tremendous upside potential that may be difficult to overlook. As is the case with any other type of investments, you need to approach real estate investing strategically. These tips will help you to develop a strategy that is right for you.

Prepare Your Personal Finances

Real estate purchases are huge financial transactions. Some investors pay cash, but more commonly, real estate loans are used for investment leverage. Regardless of whether you are buying a rental home or a commercial investment property, your financial situation will be scrutinized when you apply for a loan. Your credit history, employment history, liquid assets, non-liquid assets and other factors will all be reviewed. Before you begin searching for your first property, analyze and prepare your finances so that you can present yourself in the best possible light to banks and investors. This is also a time to determine how much money you want to contribute as a down payment for your first investment.

Locate Partners

Many real estate investors get their feet wet on their own, but others will join forces with a more experienced investor for their first investment. If a partnership is an option for you, look for a dependable partner who has profound experience and who is willing to show you the ropes. Consider setting up a legal entity to purchase the property under after consulting with an attorney and an accountant.

Leverage Strategically

One of the most substantial benefits associated with real estate investing is the ability to leverage your investment with financing. However, this should be done strategically. Consider that the down payment that you make on a property will affect the monthly payment and overhead. Because of this, it also directly impacts your monthly profitability and your overall return on investment. There are many real estate financing options. Rates and terms vary based on the property type, down payment amount and other factors. Therefore, it is important to find the right financing along with the right property. These two generally are not independent factors.

Grow Your Portfolio

Some investors are satisfied with owning one investment, and they are thrilled to use the return to improve their quality of life. Others, however, want to grow their portfolios. You can continue to save money for each new purchase and down payment, or you can use equity in your existing investments to expand your portfolio over the years. For example, you may start with an investment in a few houses. After building equity in these rental properties for a few years, you may sell those properties and use the proceeds for a down payment on a small apartment complex. Over time, you can build a huge real estate portfolio with smart investments.

As is the case with any type of new investment, take time to educate yourself about real estate. Use the resources available to you, such as real estate agents, investor partners, property managers and others, to expand your knowledge. With these efforts and a solid strategy to establish and build your portfolio, you may soon be a seasoned and wealthy real estate investor.

Developing A Stronger Business Model In 2019

Every business has to grow. As an entrepreneur, you already know this. The problem lies in deciding how your company should grow. You need to pay attention to the changing market in which your company is based. There’s no use in simply focusing on your business’ internal aspirations and interests. What about the external market? At the end of the day, it’s all about what the customer wants. And if you want to ensure that your company is well-equipped for modern-day success then you should focus on the following suggestions for developing a stronger business model in 2019.

Develop your team and yourself.

The first step to developing a stronger business model in 2019 is developing a stronger team. You rely on your workforce to drive your business forward and to help with its continual growth. But if you want to expand then you need to increase productivity. You need to encourage your workers to put more into their work. Create a nice office environment with couches, a TV, and maybe even a pool table. Maybe even arrange team outings to reward your employees and connect as a workforce. You could also consider collaborative hiring as a new way to interview candidates. This will ensure that every new employee is a perfect fit for the development of the team and the company because they’ll have been assessed by the people who will work with that person every day.

As for yourself, you should always strive to continue learning if you want to be an effective leader for your company. When you learn new things, you can guide your team to learn new things, and your business will expand as a result. Don’t underestimate your influence as the owner and boss of your company. In a changing marketplace, you need to keep up with new methods and technologies. Your job isn’t simply to keep delegating responsibilities to your employees. Otherwise, you’ll become ornamental. If you want to play a key part in directing your business and deciding where to take it next then you need to know as much as your skilled workforce. Keep taking courses to learn and develop yourself. Maybe you could learn a little something about SEO or social media strategies so you can better guide your digital marketing team. The point is that a stronger business model starts with a stronger team and a stronger leader. If you want to make a difference to your company this year then work on your employees and yourself.

Develop your digital image.

It’s been the case for years, but your business’ online marketing plays a big part in its ability to reach modern consumers. If you want to make an improvement to your business model in 2019 then you should think of ways in which you could develop your digital image further. Obviously, we’re not saying that your company has no presence on the internet, but it might not have a coherent and consistent image. Every modern business has a website and social media pages, but they might not be well-designed or interlinked. Your digital branding plays a big part in how your business is perceived by the market. Make a good impression if you want to reel in more customers and expand your company’s client base. You need a unique website. You need a website with better content than rival sites in your industry; it needs to be responsive to different devices and concise in length. Your payment options need to be easy to use. Keep things professional, tidy, and eye-catching. As for your presence on social networks, make a connection with people. Your employees need to respond to questions and complaints quickly and competently. That’s how you’ll develop a great online image and reputation in 2019.

Develop your brand.

We’ve talked about developing your company’s digital image, but you also need to think about your overall brand. What does it represent? That’s the question you need to answer in 2019. The consumer in today’s society cares not only about the goods they consume but the business that sells those goods. You need to show the target market that there’s substance and depth to your brand. You need an identity with which people can relate. Maybe you could take a sustainable approach to running your company. That would demonstrate how much you value the planet, and it would impress consumers. You could also donate to specific charities to show that you want to give something back to the community. Developing your brand successfully in 2019 is all about showing the human side of your business.