Finance advice
Victor Kumar

5 top strategies to improve your chances of investment success

By Victor Kumar

There are different investment strategies that can suit different investors for vastly different purposes. Victor Kumar shares his top five investment dealmakers to improve the odds of any investment success.

Some investors need cash flow properties at a certain point in their life, while others are looking for solid capital growth prospects.

Of course, over the years of your property investment journey, your needs may change as your life changes.

Yet, when it comes to improving your chances of investment success, there are some things that never change.

Here are my top five investment dealmakers:

1. Liquidity in the market

Things will sometimes go wrong, especially in a bad market.

So, you must be confident that you’d be able to offload the property regardless of what the market is doing.

You may have to discount the property slightly, but it’s vital that you’re not stuck in a mining town, for example, where no one wants to buy anymore.

To ensure liquidity you should look for properties in locations that have three or more big brand name real estate agencies that are trading within 10 to 15 minutes’ driving distance.

That’s because these franchises have been established in those areas after significant market research about the market’s future performance.

These franchises in turn have a number of salespeople who need to make a living by selling property, so that is a sign of liquidity in that market; that rules out buying in smaller regional locations because they can be seasonal, which means you may not be able to offload a property in a bad market if you need to.

2. Influence centres

What I mean by influence centres is buying in a location that is still in a reasonable travel time to the CBD or influence centre.

In terms of time, apart from Sydney, that would preferably be one hour’s travelling time in off-peak. In Sydney, that time frame is longer because of its multiple major employment nodes.

As well as that, it also still needs to have major work available, which is not dependent on just one industry, within a 30-minute travel time frame.

In Victoria, for example, you could buy up to Geelong and beyond, and up to Ballarat. Many locals see these areas as “regional”.

In Geelong itself, while people can travel to Melbourne for work in reasonable time, they have local employment as well as a major influence centre in Werribee, which is about 15 minutes’ travel time from Geelong. So that location ticks both boxes.

The reason for being within one hour’s travel time is that during slow economy events, such as the GFC, jobs may dry up where they are, but they can still travel towards the city for work until things improve.

3. Rentability

There is no sense buying a one-bedroom apartment in an area where there is no market for it.

Equally, it makes no sense buying a two-storey house if the bulk of the population in that location is an ageing one.

You have to understand the demographics of the area as well as what tenants want.

It’s also important that you appoint a property manager who is going to professionally manage your property, but also be your eyes and ears on the ground in terms of any shifts in the rental market.

If your property does become vacant, they can then guide you on whether you should drop the rent to get it tenanted faster.

Also remember to never put off preventative maintenance as it will save you thousands in the long run. A few dollars spent when you buy the property can pay dividends down the road.

4. Attractive to lenders

A property always has to be attractive to lenders, especially at the moment.

Most banks need to be willing to lend you money to buy it as well as be prepared to refinance it over the years.

This means no fancy apartments where there are major issues such as company titles, because lenders will shy away from these and that will make it harder to sell.

At some point in time you will need to sell a property so you need to assess the “lendability” of each asset.

If a lender isn’t going to give a home loan for a certain type of property, how are you going to sell it to a buyer?

This also includes very small units because lenders don’t like these.

That said, you need to ensure every property selection matches your financial fingerprint as well as your portfolio mix. It’s no sense bagging the bargain of the week if you don’t have the cash flow to hold onto it.

5. The “sleep at night” factor

This involves the concept that if everything is going well with your property or portfolio, then you can sleep well at night.

Now, this is especially so for investors who own multiple properties.

As humans, we often get a gut feel about something, which we often ignore to our detriment.

However, for property investors, they should listen to their intuition because if a deal is going to keep you up at night, then it’s not the right one for you.

Another bonus dealmaker is that you should only take advice and recommendation from people who have more properties than you, have bought over more than one market cycle, and who own the same type of dwellings.

Taking advice from someone who has always bought off-the-plan, yet your strategy is to buy established property to add value makes little sense, doesn’t it?

Always question the experts in the industry about what they are doing right now. Are they still riding on the coat-tails of deals done 20 years or 30 years ago, or are they actively investing across the country in todays market?

Just like there is no point going to a 1970s mechanic with the latest BMW, choose your advisers wisely if you want to make solid deals instead of mistakes that could have been easily avoided.

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About the Blogger

Victor Kumar

Victor Kumar

Nearly 15 years ago Victor and his wife came to Australia from Fiji with just $4,500 in their pockets. They worked hard as radiographers but realised this was not the way to prosperity. Victor embarked on a process of building wealth through property. He has amassed a substantial property portfolio, and is still actively buying and renovating property. His recommendations are based on what works in today’s market, not what used to be effective a year or more ago.

Victor’s experience, finance background, and financial planning qualifications mean he is well equipped to negotiate with banks – helping them find ways to say “Yes”. He has also invested significant time and money in learning from other property investment experts and knows how to make a portfolio work.

Of course, Victor has made a few mistakes along the way but these have made him wiser – and he’ll let you learn from his mistakes so you don’t need to make them. His goal is to help you achieve your financial goals by sharing his extensive knowledge about financial structures and investment property.

Victor is now sought after as a keynote speaker at several property investment seminars and is acknowledged by his peers as an expert in the industry.

http://www.rightpropertygroup.com.au/

Email:
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  string(51) "Boost for investors as app sets up off-site bidding"
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  string(144) "

Property investors are now able to identify and bid on auctions remotely using a new live-streaming functionality launched by Gavl.

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Called “Request an Auction”, the new functionality enables users to watch and bid on any Sydney or Melbourne auction remotely.

Through Gavl, prospective buyers are now able to register to bid on their preferred auction. The platform will obtain permission from the listing agent and confirm within 48 hours.

Vendors can also request to have their auctions broadcast to a larger buyer audience.

Co-founder Joel Smith said that auctions streamed on Gavl attract 47 per cent more viewers than traditional ones.

He said that Request an Auction will be valuable for remote buyers.

“Buyers are able to have Gavl attend any auction they nominate, so they will never have to miss out on an opportunity due to logistical complications in physically attending the auction.

“Vendors, too, have the opportunity to directly book an auction with us, so they can open up their event to buyers all around the world. With more potential buyers, they’re giving their property the chance to receive more bids and maximise their sales result.”

Mr Smith said that prior to the Request an Auction app, buyers were limited to what they could achieve through the Gavl technology.

Gavl is a live-streaming and bidding platform for real estate auctions.

Mr Smith said that it has streamed more than 6,000 auctions, which have achieved 3.5 million views from 50 countries.

Gavl’s Request an Auction function is currently being offered in Melbourne and Sydney only.

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Having to split her time between Hong Kong and her original base of Sydney has not slowed Julia Tita’s goal of building a high-performance Australian property portfolio. Instead the resulting alterations to her strategy have positively impacted her investing success.

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Having recently purchased her 6th property, Julia joins host Tim Neary to discuss her journey, share her ups and downs over the years, and reveal her thoughts on why some properties are better than others.

Julia also explains why she no longer makes a move without the help of a buyer’s agent, why working with a strong team of specialists is extremely important and discloses her long-term property ambitions.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

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How a move to Hong Kong impacted Julia’s Australian property goals
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  ["title"]=>
  string(88) "‘Common’ referrer practice of being paid on both sides of the fence coming to an end"
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  string(246) "

The practice of property investment firms sharing undisclosed kickbacks among the supply chain involved in development sales will be outlawed in NSW on 1 July this year under the Real Estate Reform being handed down by regulators in NSW.

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Property commentator and valuer, Suburbanite’s Anna Porter, said the reform will address conflicts of interest.

She said they arise when a mortgage broker, accountant or financial planner receives part of the commission from the property firm, who receive their fees from the developer or seller.

“This puts the broker into a position by which they are being paid on both sides of the fence,” she said.

“Until now this has been a grey area and there was nothing stopping this practice.” 

Ms Porter said this has been a common practice in the industry.

"Some well-known mortgage broking firms openly admit to receiving $5,000–$10,000 per referral in their pocket.”

She also said this process has been going on for decades.

"Property investment firms commonly pass some of their commission on to the mortgage broker, accountant or financial planner as a reward to them for passing on the referral. This means that many brokers or financial service providers are making significant amounts of money just to refer on to a property firm, often totalling hundreds of thousands of dollars a year," Anna Porter said.

Ms Porter said the Property, Stock and Business Agents Amendment (Property Industry Reform) Bill 2017 will be in force from July this year, and will prohibit this practice unless the broker or referring partner also holds a real estate industry license.

"Under the new laws, if the broker takes a referral fee from the property firm, they will have to be a licensed real estate agent and also hold a corporation’s license,” she said. 

“Subsequently, every transaction that they receive a referral fee from, they will be putting their license up against the transaction and taking full liability for the conduct, practices and outcome of that transaction, even if they have little to do with the transaction; they are a party to it financially and therefore take as much risk as everyone else in the transaction.”

Mr Porter said where a referrer holds a real estate license, and receives a part of the sale commission, they may find themselves in breach of the ethical requirements under the act.

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‘Common’ referrer practice of being paid on both sides of the fence coming to an end

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