Property Investment

When potential clients wish to become property investors they should follow the basic principles of carrying out their own research before entering into any contract. There are five principal areas where help is available. Too often we see those people investing in real estate without doing their own homework. When the investment sours for whatever reason the blame seems to be directed at anyone bar the investor. There are five principal areas where help is available. Shown below is the path a potential investor should take.

1.    The Accountant/Investment Advisor

The Accountant and/or an Investment Advisor is in a position to offer advice on the benefits and the risks involved in this type of investment because they have the required qualifications. It is particularly important to be fully aware of the implications in borrowing in one’s own name, a company or a family trust. What type of investment suits the needs of the client? Should it be an investment where the client can visit the property in a physical sense? Or, should it be a listed property trust where one can drive past a building and say “I think I own that window on the 4th floor”?
This advice may cost a little but it may also be money well spent in the long run.

2.    The Broker
The Finance/Mortgage Broker is committed to assisting clients in the search for a loan facility that suits their needs and provides funding solutions in line with the advice received from the Accountant/Investment Advisor. The Finance/Mortgage Broker has access to many and varied loan structures and receives remuneration from the lender

3.    The Real Estate Agent
By allowing a Real Estate Agent to find a suitable property, the client can eliminate a lot of guess work. The agent is in the area and has a good understanding and knowledge of what properties are on the Market and can advise of trends in the particular area being sought.

4.    The Settlement Agent/Conveyancer
Settlement agents and conveyancing firms are licensed by the various
State and Territory authorities and have a recommended Schedule of
Fees. However reduced fees may be negotiated. It is wise for the
purchaser and the vendor to have different firms acting on their behalf.

5.    The Lender
Your Finance/Mortgage Broker will introduce the loan application to a lender. It may be the clients’ existing lender or there may be a need to change lenders. If that is the case, ensure all the costs such as application fees, ongoing fees and exit fees are fully understood.

If the Investor follows the steps outlined above it should turn out to be a rewarding experience.