Here is a great article on Australian property numbers key to investor success with a short video by David Koch.
INVESTING is a numbers game, especially when you are looking to put your money into real estate.
Unlike the sharemarket, where data is reported daily, property figures can be tricky to find and compare.
However, knowing the numbers is a key to property investment success, so here are some to follow.
INTEREST RATE
Interest rates on investment loans are likely to be a little higher than those for standard mortgages, but shouldn’t be more than 0.25 percentage points. Check with lenders or comparison websites, as many rates today are near 4 per cent.
Compare interest rates
YOUR TAX RATE
The higher your marginal tax rate, the bigger tax refund you get from negative gearing deductions, which means couples should structure investments in the name of the highest earner where possible.
ASKING RENTS
Muirhead Property Management director and investor Prue Muirhead says websites such as realestate.com.au give investors a clear idea of the likely rent they’ll receive. While sale prices vary between what’s advertised and what’s paid, rents rarely move, she says.
MEDIAN PRICES
These show what houses and units in your city are selling for, and can easily be found online. Compare prices over the past five or 10 years if you can, but you may have to pay. Some state government and real estate industry websites show free historical data, while other sites may charge subscription fees for people seeking more detail.
Muirhead says she reads the back of property investment magazines for current and historical prices, and rental data. “Try to be aware of similar properties in your area and what they are selling for,” she says. CoreLogic head of research Cameron Kusher says price trends help investors forecast future returns. “If a city’s had a good run for a period of time, it’s reasonable to expect the market will slow, and better opportunities probably lie elsewhere,” he says.
OTHER NUMBERS
Unemployment data, migration information, property buying and selling costs, rental yields and vacancies can all help investors make decisions. “The listing websites provide a lot of information as well,” Kusher says. “Realestate.com.au has a lot of free information, and also talk to the agents because they have local knowledge. Pick their brains about what happens in the market.”
