Invest
What savvy buyers do before they buy a property
Before cashing out on a property, buyers of all ages and experience levels are encouraged to have a comprehensive plan in place that caters to several key elements.
What savvy buyers do before they buy a property
Before cashing out on a property, buyers of all ages and experience levels are encouraged to have a comprehensive plan in place that caters to several key elements.
Extensive preparation is key when approaching a property purchase, and online finance calculators don’t count, Pure Property Investment’s Paul Glossop said on a recent episode of The Smart Property Investment Show.
“It starts with preparation because it doesn’t take much to jump on an online finance calculator and say here is my income, here are my debts, how much can I borrow? That is not a strategy,” Mr Glossop advised.
According to Mr Glossop, a top-notch strategy answers several key questions.
“What you really want to be thinking about, whether you’re 20 and buying your first investment, whether you’re 30 and buying your first investment or already buying or bought a home, or you’re 40 and looking at leveraging into multiple assets, it comes down to understanding what are you buying and why are you buying it.
“How does this fit into any other assets you might have and trying to think about the considerations of where your equity sits, where your other portfolio may sit, land tax considerations, exposure into certain markets, as well as what your paydown time frame instructions look like,” Mr Glossop explained.
The next most important element to deliberate is finance.
“How do you structure your finance best because in these types of markets, and I’m talking a good two- or three-year growth cycle, we want to see people prepared,” Mr Glossop said.
He encouraged multiple purchases, but only if the finances are sufficient.
“Prepare your finances accordingly to say go and strike and strike accordingly. The last thing you want to be doing or thinking is that you may have capacity to go and buy two or three assets over the next three years, but that actually might be possible here and now,” Mr Glossop explained.
But the big catalyst, Mr Glossop said, is planning for changing circumstances.
“Consider what happens when the interest rates go up. Consider what happens when the market cools down, because the guarantee is that, as sure as the sun rises in the morning, we’re going to see a growth cycle, we’re going to see a flat or sideways cycle, and we’re going to see a negative cycle over the next 10 years.
“Don’t get caught up in the moment... You need to know that your cash flow is OK when that market goes backwards or when the interest rates go up,” Mr Glossop advised.
“Am I OK if I lose my job? Am I OK if we have a baby? Am I OK if I choose to retire? They’re the things that make people better investors as well as far more successful long-term investors.”
About the author
About the author
Property
Millennials believe first home buyers need more support
Australia’s up-and-comers in the housing market say more needs to be done to slow rising house prices. ...Read more
Property
3 in 4 borrowers in trouble are in lockdown: ANZ
Despite offering support, ANZ said freezing home loan repayments will be the last resort, as three in four requests for support stem from NSW. ...Read more
Property
RBA gives APRA’s use of macro tools a tick of approval
Ahead of an expected move to impose tougher lending rules on the banks, the Reserve Bank has looked into previous attempts by APRA to cool the housing market. ...Read more
Property
Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market. ...Read more
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
The Olympic effect on property and equity investors; COVID-19 Disaster Payments and super
Listen now
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Property
Millennials believe first home buyers need more support
Australia’s up-and-comers in the housing market say more needs to be done to slow rising house prices. ...Read more
Property
3 in 4 borrowers in trouble are in lockdown: ANZ
Despite offering support, ANZ said freezing home loan repayments will be the last resort, as three in four requests for support stem from NSW. ...Read more
Property
RBA gives APRA’s use of macro tools a tick of approval
Ahead of an expected move to impose tougher lending rules on the banks, the Reserve Bank has looked into previous attempts by APRA to cool the housing market. ...Read more
Property
Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market. ...Read more
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
