Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

[On-Demand Webinar] Top 10 Risks of Property Investing and how to Avoid Them

238 views

Published on

In this on-demand webinar we discuss the top 10 risks inherent in property investing, and how to avoid them for property investing success

Published in: Real Estate
  • Be the first to comment

  • Be the first to like this

[On-Demand Webinar] Top 10 Risks of Property Investing and how to Avoid Them

  1. 1. Top 10 Risks of Property Investing and How to Avoid Them
  2. 2. Maximise audio quality • Please ensure your speakers are on, volume is up and not on mute. • You can test your audio in the control panel of the Go To Meeting software, under audio preferences. • If you can’t hear us yet, please ensure your speakers are on and turned up. • TURN OFF: Outlook, Skype, online back-ups and any music or video downloads. • Faster internet = better quality audio.
  3. 3. Dennis Wong • Property investor for the past 10 years. • Personal experience with renovations. • Great amount of industry experience.
  4. 4. Material contained in this presentation is an overview only. It should not be considered as a comprehensive statement on any matter nor relied upon as such. This presentation contains general information only and does not take into account your personal objectives, financial situation or needs and you should consider whether the information is appropriate to you before acting on it. Before acting on any information you should consider seeking advice from a financial adviser and your accountant before making any financial decision in relation to any matters discussed in this presentation. General advice disclaimer
  5. 5. We help investors build and manage their property portfolios
  6. 6. • Guided and mentored thousands of clients to plan and purchase property since 2006 • Helped clients build wealth through properties • Provides superior real estate information • Assisted clients reduce debt and retire early • Over 260,000 members Real Estate Investar
  7. 7. In partnership with…
  8. 8. Get your FREE tickets at – https://info.realestateinvestar.com.au/events
  9. 9. Search Analyse Acquire Track Account
  10. 10. Poll: Do you have a property strategy?
  11. 11. Top 10 Risks & How to Avoid Them
  12. 12. Tips to avoid risk • Research the vacancy rate & rate change on suburb. • Research area – transportation, schools, jobs, amenities, entertainment etc. • Review rental comparables – be realistic in expected rent. • Engage in reputable property managers who will ensure your property is properly marketed. • Keep some savings in reserve in case of extended vacancy. Risk 1: Vacancies Having your investment property vacant means no rental income.
  13. 13. Tips to avoid risk • Research the suburb demographic, who are your likely tenants? • Engage in reputable property managers who will ensure your property is properly managed & thorough background checks are completed. • Invest and maintain the right landlord insurance policy. • Invest in the middle of the market, more likely to attract good tenants who are responsible and will look after your property. Risk 2: Bad Tenants Finding the right tenant for your investment property can be difficult in some situations.
  14. 14. Risk 3: Maintenance Issues Investing in a property where it requires constant maintenance can cost you thousands. Tips to avoid risk • Engage in reputable builders and tradesmen – check their history, reviews, licence, insurance & registration. • Make sure you do a Building & Pest Inspection. • Have the right insurance.
  15. 15. Risk 4: Natural Disasters Parts of Australia experience different natural disasters such as floods, bush fires, cyclones and extreme weather. Tips to avoid risk • Avoid areas where these natural disasters occur. • If investing in these areas, ensure your property is built to withstand the natural disaster. • Maintain appropriate insurance policy that covers damages caused by relevant natural disasters.
  16. 16. Risk 5: Unforeseen costs Can be expensive and you may not have enough set aside for unexpected costs. Tips to avoid risk • Landlord Insurance – cover loss of rent & damages from tenant. • Contents Insurance – covers items inside the property. • Building Insurance – covers unexpected events that damage your building. • Income Protection – covers you if you are unable to work for a period of time due to illness or injury. • Life Insurance – cover mortgage repayments in case of death.
  17. 17. Tips to avoid risk • Avoid borrowing too much. • Always consider how interest rate increases will affect your mortgage repayments. • Ensure you have some cash flow positive properties. • Fixed vs Variable Interest Rates. Risk 6: Debt Gearing Is the difference between the debts owed on a real estate investment and the equity within the investment.
  18. 18. Tips to avoid risk • Consider fixing your interest rate. • Keep your portfolio to a size that you can maintain and not be forced to sell off any if repayments increase. • Maintain a balanced portfolio where you have positively geared properties that can cover all their own loan repayments and expenses. Risk 7: Interest Rate Rises Will increase your mortgage repayments whether you pay Interest only or Principal & Interest. Rates will eventually increase.
  19. 19. Tips to avoid risk • Will you need cash in the short term? If so, property may not be the best investment. • Property investing is long term and investors are forced to hold asset longer to be able to make a significant gain. • Speak to a qualified financial expert. Risk 8: Liquidity Is the ease of being able to gain access to the money you have within an investment. More difficult to get your money out compared to other investments such as shares.
  20. 20. Risk 9: Property drops in value Property is worth less than what you paid and you can’t even sell it to cover the loan repayment. Tips to avoid risk • Research target suburb and ensure it has shown there are signs of future capital growth. • Diversify portfolio across multiple locations and markets.
  21. 21. Risk 10: Buying the wrong property Can lead to negative cash flow as well as little or no capital growth. Tips to avoid risk • Research, research and more research! • Focus on the numbers. • Don’t buy on emotion. • Seek help and assistance.
  22. 22. Property Data - Pro Membership
  23. 23. Property Data - Pro Membership
  24. 24. Property Data - Pro Membership
  25. 25. Property Data - Pro Membership
  26. 26. Property Data - Pro Membership
  27. 27. Property Data - Pro Membership
  28. 28. Property Data - Pro Membership
  29. 29. Property Data - Pro Membership
  30. 30. Property Data - Pro Membership
  31. 31. Property Data - Pro Membership
  32. 32. Strategy - Risk Assessment
  33. 33. Strategy – Renovations Pros • With the right changes, can create significant equity uplift over a short period of time • Increase rental income after renovation • Renovate an existing property – smaller investment required than buying a new property Cons • Can be costly – unforeseen issues can arise • For DIY investors with no experience, costs can blow out • Time consuming • If renovation takes longer than expected, holding costs & missed rent will have a negative impact on return • No guarantee on return – equity uplift or rental
  34. 34. Strategy – Renovations COBURG, VIC • Purchase Price - $850,000 on April 2015 • Sold Price after renovations - $1,525,000 on June 2017
  35. 35. Strategy – Subdivisions Pros • Can create substantial equity or cash over a short period of time • Take advantage of under utilised land • Sell one block & keep the other - loan could be fully or nearly paid off Cons • Can be costly • Council regulations & restrictions • No guarantee on return • Time consuming • Reduced space – may not be as appealing to buyers
  36. 36. Strategy – Subdivisions NORMAN PARK, QLD • Purchase Price - $875,000 on March 2013 for 810m2 block • Sold Price after subdividing 1 lot into 2 lots & building new houses: • Lot 1 (5 bed, 3 bath house on 405m2) – sold $1,310,000 in April 2014 • Lot 2 (5 bed, 3 bath house on 405m2) – sold $1,335,000 in June 2014; then sold again for $1,423,000 in Nov 2015
  37. 37. What type of investor are you? Pros • Save you money • It can be a huge amount of fun • You have the opportunity to buy below market value • You can time the market • You have access to every property in New Zealand • It can become a passion for you • Learning experience Cons • You can make mistakes • Each mistake can cost you time & money • It can be time consuming • It can be mentally & emotionally draining • You only get access to on market listings • You’re not in the industry on a day to day basis • More likely to buy in boom & bust areas • More likely to invest with your heart than your head DIY Investing
  38. 38. What type of investor are you? Hands Off Investing Pros • Save you time • Develop a property investment strategy • Experts look out for your best interests • Research & experience can save you money • Work inside the industry every day • Make buying property simple & stress free • Deal with real estate agents, developers & builders on your behalf • Access to off market opportunities Cons • High fees (buyers agents generally charge 2-3% of purchase price) + engagement fee • Can be expensive, charge you for every property you purchase • Some buyers agents won’t let you have a say in what you purchase • Some buyers agents are actually property marketers • Some property educators teach you the theory but you won’t put it into action
  39. 39. Are you ready to take action?
  40. 40. Option 1: For DIY Investors
  41. 41. Pro Membership – Special Webinar Offer Register for a personalised 1-on-1 demo - https://info.realestateinvestar.com.au/1-on-1-demo  Usual price $149 per month  Save $50 per month  No minimum term  Month to month membership
  42. 42. Option 2: For Hands Off Investors
  43. 43. Premium Membership • Complete end to end solution to help you purchase profitable investment property • Team of industry experts working for you • Achieve the outcome without the stress or hassle
  44. 44. Poll: Would you like a free 1-on-1 demo?
  45. 45. Poll: Would you like a free consultation to assess your situation?
  46. 46. Get your FREE tickets at – https://info.realestateinvestar.com.au/events
  47. 47. Questions? Register for a personalised 1-on-1 demo - https://info.realestateinvestar.com.au/1-on-1-demo Book a free strategy session – https://info.realestateinvestar.com.au/premium-membership

×