Last week the Sky News Australia Real Estate show invited me to join their panel of experts and answer some of their viewer’s personal questions on property investing. I jumped at the chance. Property is my passion and helping and educating people is the primary focus of my business. So last night there I was. Nervous but pumped!! Sometimes you’ve got to push yourself out of your comfort zone to achieve that things you want to.
Although not verbatim, I thought I’d share with you the questions from the show and a brief answer on each one in case any of you are in the same boat. If you want me to expand further on anything, give me a shout. Always happy to chat things through.
We bought a 3-bedroom house last year and borrowed the maximum. Now that my partner has lost his job, I’m worried that we will get into mortgage stress. Would you recommed refinancing? Should we sell now before we’re forced to? Pete, SA
I presume there are no buffers in place until your partner returns to the workforce? This is something I strongly advise to protect you if situations like this arise. And by buffers I mean between $5 to $10K for unexpected events such as hot water systems blowing up, loss of income, interest rate rises and rental vacancy. If this is the case, until your partner gets more work you have this to see you through that time of unemployment. The last resort would be to sell in that current market and you always want to sell when you wish to, not when you have to. Refinancing is a double edged sword as it is being calculated on one income so refinancing would be unlikely even if you wanted to.
I’ve been thinking about buying an investment property in Sydney but I’ve been told it’s still too expensive. Do you think prices will fall further? Should I wait a little longer? Ben, NSW
What is supply and demand like in the suburb you are looking at buying in? You want to be buying in a buyers market. Sydney as a long-term investment will be worth it however as it has just come off the back of 3-4 years growth, it is not an ideal short term investment. However, if you are looking to buy in the Sydney market I would be buying now as opposed to holding off, waiting for something that may not occur. You may be able to get a discount on your purchase as it is a buyers market.
We’re planning to buy and investment property in Melbourne and have a $600k budget. Should we buy a smaller property in the better area or a bigger home in a less desirable area? Daniel, VIC
The more land the better! Land appreciates. Build depreciates. In terms of a ‘less desirable area’ that depends on where that area is? Is it North or West? It is very suburb specific in any capital city. My personal thoughts are buying something with land content over an apartment.
I have a two bedroom investment property in Hamilton in Brisbane. It was built in the early 90’s. Can these be a better buy than new builds? Sophie, QLD
A ‘better buy’ comes down to rental yield required, tax benefits, purchase price and supply and demand. Performance comes down to location, whether the complex is desirable or not and indeed the desirability of the suburb. Hamilton’s proximity is close to the CBD and on the river so this really comes down to your purchase price criteria and appetite for new or old.