Hi! It’s Harry here.
I hope that you had a happy new year and enjoyed the break, I know I did. My family took the opportunity to head up north to Queensland just before Christmas, and we had a beautiful holiday with lots of fun, sun and good times.
You probably think a beautiful holiday is sipping cocktails and not lifting a finger. Well, I prefer mixing business with pleasure since property isn’t work to me, it’s my passion, my life. So I couldn’t help but visit some very interesting sites while up in Queensland. Quite a dynamic market at the moment, and that means great opportunities for our team and clients to capitalise on.
Queensland – Beautiful one day, Opportunities the next!
As most of you are aware we are currently involved in townhouse sites in South East Queensland and hunting for similar sites in the Brisbane and Sydney areas. These opportunities usually allow our creativity to shine by using Options or Joint Venture structures to secure these sites with minimal outlay before we are ready to build. This way we are able to reward the owner and keep our risk and interest cost down in the process. These sites usually allow us to get council approval for multiple dwellings with my current target being for sites of between 4 – 20 dwellings. I like metro suburbs because they have strong employment, accessibility to existing transport and major services. And with construction at a low point in the cycle, creating profit at the wholesale level is what the market cycles are dictating at the moment.
Interest Rates – Getting Better Deals
I was chatting to Sarah from our office the other day and we had a great discussion about how the GFC changed the face of lending for our major banks. Most people would have at least heard, if not experienced firsthand that lending was tight. The game of property investment and development did change, and with a little less money available, it made us sharpen our focus and become a little more selective in our property targets. It also raised the importance of securing finance BEFORE you buy, and knowing what property is “hot” and what is “not” in the eye of the lender.
Anton Hamer is our Loan Advisor here at Plan Assist, and last year he saw approval rates drop by 50% after the negative news out of Europe. He said that the banks policies were the tightest he had seen during his 19 years of mortgage broking. However during December 2011 and January 2012 approvals were back up to 100% of applications due to policies becoming less stringent.
And it’s not just the lenders to keep an eye on, there are also interest rate movements and more confidence in the market to look forward to. With the major banks suffering from a decline in lending growth rates, competition is tougher than ever with banks fighting for business.
There is a pricing war in banking, with discounts as large as 1.00%pa offered to new customers only. Banks love to attract new business, sometimes at the expense of existing customers.
Recently, Anton organised a refinance for Sarah who was stuck on an old rate with her existing lender. She re-financed her $320,000 home loan from one of the 4 major banks to another, and her interest rate dropped from 6.63% to 6.3%. This means a real saving of $1,056 each year on her home loan. One of the biggest benefits of the refinance was gaining access to equity in her home, which Sarah will use for future investment in property.
I strongly recommend that everyone look at their interest rateright now and ask for a quick comparison from our Finance Team. These types of interest savings can turn negative cashflows back into positive, which means more money in your pocket. To make sure you don’t get caught out if your bank fails to pass on a new discount, call Anton Hamer in our office on 1300 039 801 to see if he can save you money like he did with Sarah’s re-finance.
Turramurra Transaction Update
We just finished our Turramurra transaction and settled on both properties prior to Christmas. The front property was sold after the 1st open weekend, and the property at the rear was sold after the 2nd open weekend.
And that raises an interesting point in the area of property sales.
We changed our selling strategy to suit the current market place by furnishing the properties for sale, which we haven’t done in the past. Because of the furnishings creating the stunning interior look and feel, we found this was very successful and aided us with a quick sale. Some buyers loved it so much, they wanted the furniture to stay with the house. The result was far better than the average sale time in the suburb, which was in excess of 140 days.
The lesson I learned was:
A changing market always forces you to adapt to the conditions, and using simple techniques at the appropriate time can bring about powerful results.
Staying flexible is the key, and there are a stack of techniques that can create a difference in your results. They are simple. And they work. Talk to our team to find out how to identify these tools and gain an edge in your next investment.
If you are in the business of making a living from property, then you will be interested in our latest Live Property Training & Webinars for 2012. Our team is planning a series of Presentations by invitation only, designed specifically for investors who regularly invest in property to create financial freedom. Check the calendar for updates. I will personally be visiting our Queensland clients in February, followed by a quick visit to Victoria in March, so look out for more information in the coming weeks.
Finally, please read the below article that I feel will add great value to you. It’s a great tip to get you into action with your property investing.
I look forward to catching up with you soon.