The five golden rules for lock down and investment property
Property guru who launched a multi-million dollar portfolio on a $50,000 salary reveals the five golden rules for choosing the perfect investment
- An investment property expert has shared his tips for the post lockdown market
- Lloyd Edge said it’s still possible to find a bargain despite a turbulent 12 months
- Among his top rules are to research the area and follow experienced investors
A former music teacher who purchased his first house at 29 on a $51,000 salary and amassed a multimillion-dollar property portfolio has shared his golden rules for real estate investing.
Lloyd Edge, buyer’s agent and author of Positively Geared, said investing during unstable periods can be risky and daunting but can also be very profitable if done right.
Mr Edge said investors tend to make rash decisions when the market is turbulent but his five rules can provide a consistent foundation buyers can rely on to make smart investments.
Lloyd Edge (pictured) was a freelancer on a $51,000 salary when he paid a 10 per cent deposit on his first home in Sydney
He said despite a turbulent 12 months there were still opportunities to purchase growth properties if you know what to look for (stock image)
The first step before diving into a property purchase is to secure finance and Mr Edge recommends consulting a mortgage broker.
‘They will assess your financial position, explain how banks view this, explain the different types of interest rates, and suggest what loans are going to suit your goals and strategy,’ Mr Edge said.
He explained a broker will also give you a list of the best banks that fit your needs and advise you of changes you should make before handing in your application.
Lenders will look at things like your situation, the area you’re buying in, they type of property, your reason for buying, and how much you’re looking to borrow.
The 45-year-old knows what he is talking about with his property portfolio steadily growing over 15 years.
His investments now span capital cities like Sydney, Melbourne and Brisbane, as well as regional areas like Newcastle, Armidale, Port Macquarie and Toowoomba.
For his next rule for successful property investing, Mr Edge said buyers should be aware of the hidden costs.
Now 45, Mr Edge has a very refined idea of what constitutes a good buy, and he helps others realise their property dreams through his self-made business, Aus Property Professionals (pictured: one of Mr Edge’s homes)
Mr Edge has revealed his five golden rules for property investing (pictured with his wife, son and dog)
FIVE GOLDEN RULES FOR PROPERTY INVESTING
1. Secure good finance: Mr Edge recommends speaking to a mortgage broker who can tailor your loan options.
2. Know the exact costs: Along with stamp duty and conveyancing there are often hidden charges like strata and document fees. And be sure to have a savings buffer for unexpected costs.
3. Understand the location: A strong local economy, quiet roads, nearby amenities and transport will make a difference to resale value.
4. Buy where there is room for development: A growing area with private and public infrastructure being built will increase demand.
5. Follow the leader, not the herd: Experienced investors with proven track records will usually be ahead of the crowd. Following them will get you into an area before it is saturated.
Typical costs include the deposit, stamp duty, solicitor or conveyancer’s fee, building and pest inspection, property insurance, holding costs, and maintenance costs.
‘Items such as a strata report if you buy an apartment or sneaky legal costs can derail your budget. It’s important to conduct due diligence and once you determine the end price, ensure you have savings on top to account for any situations that pop up.’
One of his biggest tips is to understand the location of where you’re buying.
He recommends looking for areas with a strong local economy that has different industries thriving which doesn’t necessarily have to be near a CBD.
‘Other considerations for growth potential include main roads, quiet streets, flight paths, and accessibility to amenities and transport.’
He also added a warning that with the current ‘hot market’ many people are buying isolated properties that may not be as successful in 5-10 years when normal conditions resume.
Similarly, investors should buy where there is room for development both in terms of private businesses and government infrastructure such as schools or hospitals that will create a demand for workers.
‘Any area that supports job growth will be a safe investment choice.’
To round out his five rules, Mr Edge suggests following the leaders not the herd.
‘Strategic investors with proven track records tend to get involved before everyone else does – it’s easier to avoid dud purchases when the market is heating up,’ he explains.
Mr Edge recommends buyers speak to a mortgage broker to tailor their finance when buying real estate (stock image)
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