| The Plan - How, What & Where? | | | | holiday. Leave that stuff until after your 2nd or 3rd |
| Ok, so you have decided that you want to buy an | | | | property. Don't worry if the idea of refinancing is a little |
| Investment property but you're probably finding it hard | | | | confusing - Chapter 8 (Revalue, Refinance & |
| to know where to begin. | | | | Repeat) will go into it in much more detail |
| Should I buy an old house? Should I buy a new house? | | | | So now that you know roughly what your plan is you |
| Should I renovate? Should I buy a block of land and | | | | need to decide Where and What to buy? |
| build a house? What does 'off the plan' mean? | | | | Let's start with Where? What area should you buy |
| All are great options but I'm going to focus our | | | | your first Investment property? |
| attention on what I believe is the best and most | | | | This is a very important question but please don't let it |
| 'accessible' option that any ordinary person can use to | | | | be too important. What I mean is that lots of people |
| fast track their Property Portfolio. | | | | get so stressed out about where they should buy, that |
| I like to call it the '5 R's Strategy' | | | | they end up doing nothing at all. There are plenty of |
| It revolves around buying an existing property at or | | | | websites and companies that can give you great |
| under market value. Then you simply follow the 5 R's. | | | | information and research about predicted 'high growth' |
| Revamp | | | | areas which can make you hundreds of thousands of |
| The idea is to buy a property that is 'structurally sound' | | | | dollars down the track. So definitely take advantage of |
| but in need of some cosmetic repairs. I won't go into | | | | the resources that are out there. Another aspect to |
| too much detail here but you would be amazed at | | | | consider is that if you are going to be spending some |
| how much value you can add to your property by | | | | time revamping & renovating your property then it |
| doing a few minor things. Whether you polish the | | | | would be silly to buy in an area that was a 7 hour |
| floorboards, paint the walls or even just replace some | | | | drive away. So do your research and use your |
| light fittings you can literally add thousands of dollars to | | | | common sense. Most importantly don't stress too |
| the value of your property. In Chapter 6 (Revamp | | | | much and try to enjoy the research - It should be fun. |
| Renovations) we will discuss how much (or how little) | | | | Now the question is What? |
| you should do depending on your circumstances. | | | | This depends entirely on what area you decided to |
| Rent | | | | buy in. You always want to buy a property that is |
| Simply rent your property out and start letting your | | | | somewhere around 'the average' or 'typical' property in |
| tenants pay the mortgage. Chapter 7 (Leasing out | | | | that area. Why? Simply because you want everything |
| your property) will cover the pros and cons of doing | | | | to be as easy as possible. Imagine trying to rent out a |
| this yourself or going through a Real Estate agent | | | | brand new mansion in a lower socio-economic area. |
| Revalue, Refinance & Repeat | | | | You will find it very hard to find a tenant who will have |
| This is the most exciting part of the strategy that | | | | enough money to pay the high rent of a mansion , yet |
| ordinary people don't realize is possible. If you have | | | | be happy to live in that area. Also when you are |
| 'Revamped' your property correctly it will now be | | | | getting your property revalued the banks use |
| worth more than what you paid for it. What most | | | | 'comparable sales' to decide how much your property |
| people don't understand is that they can actually get | | | | is worth. In other words they look at similar properties |
| instant access to this money. Simply get your property | | | | in your area and what price they have recently been |
| revalued - then refinance your loan and use this extra | | | | sold for - If there are no comparable sales the banks |
| equity you have created as the deposit for your next | | | | become very reluctant to give you a favorable |
| property. WARNING - Make sure you don't refinance | | | | valuation. |
| and then use the money to buy a plasma TV or go on | | | | |