7 resolutions for property success in 2018
There’s no rule that states when a New Year’s resolution can be made, so it’s never too late to make a plan to ensure your portfolio is successful.
From boosting your home’s value to taking the steps to trim the fat off your mortgage, these are my top resolutions for property owners looking for success in the coming year:
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1. Educate yourself about the property market
Whether you’re a seasoned investor or a first home buyer, building up your knowledge of recent developments in the property market, house price predictions, interest rate forecasts and regulation changes will help you make better decisions in 2018 and beyond.
2. Do a home loan health check
The New Year is synonymous with making positive changes for your health, like ditching a vice or taking up a gym membership. Apply this same mentality to your mortgage and allocate time over summer to review all aspects of your home loan for any opportunities where you can save money. For instance, consider downgrading to a basic loan if you’re paying service fees for bells and whistles you don’t need.
3. Refinance
Fierce lender competition in 2017 saw plenty of downward pressure on interest rates, especially for owner-occupiers paying principal and interest repayments. Rates are expected to remain at record lows in 2018, creating an ideal opportunity for savvy mortgage holders to refinance onto a better deal. Mozo calculations show the average borrower with a typical 30-year loan could save up to $2,039 a year by switching to the most competitive rate in the market.
4. Add a granny flat
Regardless if you’re an owner-occupier or investor, installing a granny flat can be an effective way to quickly add value to your home or give a boost to your rental income. Depending on the area, a quality granny flat can add anywhere between $100,000 and $200,000. Also, it’s a great place for newly married couples to live in for a few years while they build up a deposit without infringing on your privacy too much.
5. Cash in on your equity
Most property prices in the major eastern seaboard cities have shot up dramatically in recent years, leaving many home owners with a nice equity windfall. Consider using the extra value in your home to build further wealth by taking out a line of credit with the bank which can be put towards a deposit for an investment property or a share portfolio.
6. Fast track your deposit
Commit yourself to putting aside around a third of your income each week. Upholding this ratio might mean forgoing luxuries and sticking to a tough budget throughout the year, but you’ll get a deposit together much quicker. Home buyers with at least a 20 per cent deposit avoid paying expensive lenders mortgage insurance and are likely to be in better stead with lenders when it comes time for negotiating on interest rates.
7. Become a rentvestor
With Australian property prices rising by 618 per cent in the past three decades and national incomes lagging behind, ‘renvestment’ became a bit of a buzzword in 2017 now account for one in three property investments – and its traction is set to continue in 2018. The strategy involves renting in a desired location and buying somewhere more affordable. Prospective investors considering this route in 2018 should do their research beforehand, playing close attention to proximity to amenities and suburb vacancy rates.
