Understanding the house price index for property investors

Statistics and reports are useful in making investment decisions – understand complex data and use it to your advantage

A house price index tracks the rise and fall of property values. Buyers’ agents use this information to help you select a suburb or region to invest in. The historical performance of real estate in a particular location may also be used to assist you in understanding the potential investment growth of a specific property.

There are a number of methods that can be used to calculate price indices for housing.  (more…)

Property Titles and Real Estate Investing

There are varying types of ownership in regards to Australian real estate, however the most common by far is freehold ownership. The others include leasehold ownership which has a finit limit and crown land where the commonwealth/state has the power to sell, lease or dispose of land. For the purpose of this article however we are focused on title specifics associated with freehold ownership.

When investing in property you need to not only determine the type of property you want but also the title arrangements you are willing to consider, as these will have investing implications and enforce certain responsibilities on you as the owner. (more…)

Property Valuation

Property valuation is sometimes misconstrued with an appraisal provided by a real estate agent. Typically a real estate agent’s appraisal will provide an indication of the property value based on opinion, recent property sales in the area etc; however the ability to use this information is largely limited to personal usage.  Your Buyers’ agent should also be capable of providing equivalent appraisals based on their market knowledge, and be able to sort through property listings, weeding out appraisals that are overly optimistic.

True property valuations are carried out by an independent and qualified professional valuer, who has completed tertiary level qualifications in order to be licensed/registered by courts, lenders or state bodies to carry out an expert valuation.  The property valuation provided by a professional valuer is considered a formal assessment with the outcomes able to be used as in legal proceedings by courts and widely used by lenders as a risk mitigation tool due to the qualifications and independence of qualified valuers.


Inspecting a Property Before Purchase

Without doubt it is essential to engage a building and pest inspector (a.k.a. building surveyor) pre purchase but we will cover that in more detail in a later post. Before progressing though it is worth noting that most Buyer Agents will have a recommendation/preferred inspector to use (also harmless to ask if they use them for their own property purchases). Inspections are a crucial step in the process, therefore you want someone that comes highly recommended, minimising the chances of ending up with a lemon with hidden issues, that can leave you significantly out of pocket (e.g. white ants, foundation integrity etc).

Researching Infrastructure Development Plans for an Investment Property

You would have heard it a thousand times before but when it comes to an investment property one key piece of the puzzle (cliché) is location, location, location. When searching for the right investment property it is essential to ensure there is real demand for rental properties in the area and they have the potential to yield good rental returns. One great indicator for this type of demand is infrastructure and amenities in the area (current and planned) which this post aims to give you some research tips on seeking out.

Researching Demographic and Economic Breakdowns

It is essential when setting out to find a property to do your research. Sure a Buyers Agent and Buyers Advocate should have the majority of information on tap for the suburbs and cities they focus on, however to yield the best results it pays to do your own research and identify some key suburbs/towns you would like to explore further. Don’t fall risk to staying focused on the area you live in just because you are comfortable living there, your potential renter pool may not feel quite so strongly and this will be reflected in your rental income.