Unfortunately, these feelings can cloud our judgment; the following are crucial considerations that you must make before purchasing a house and land package.

Inflation

Ensure that before any major decision, you do your research and find out how much the properties are worth, this includes confirming that the property is not being purchased for more than the market is willing to pay for it.

It isn’t uncommon for the estate owner to inflate the buying price or add more structures to raise it, this could mean that the decision to purchase the land independently and gaining quotes from professional could be the better option.

Fixed prices aren’t always so fixed

This is where your original budget could, in fact, be wrong due to unforeseen circumstances. Numerous cases result in the buyer purchasing the property and having it built for a fixed number, only to find additional add-on costs due to the property sloping and ongoing building issues, as well as upgrades.

Therefore, it is integral to make sure that your budget is always a little higher than your willing to spend, it is always optimal to have breathing space.

Blue Chip Areas

Ideally, you want to aim for the high quality and premium locations, and never settle for a lesser estate.

The best way to ensure this is only to be interested in areas where there is total congruence, which means landowners and developers are targeting owner-occupiers, and the positions are relatively premium and limited. Although this is a higher cost option, the high maintenance and care from the locals will make up for it.

Decide

Once enough research is completed, make your decision and act on it almost immediately as soon as the house and land package is released and has the lowest entry point price.

As the property stays on the market, the price will continually rise as the supply and demand are quite high, this creates an urgency in the buyer, and rightly so.

Never let the notion of constant price increase rush your research and judgment, but never dwindle with your time, make your conclusions and act on them while the prices are still low.

These are only a few but vital considerations to make when purchasing a home or land packages, have a look at https://www.cpsproperty.com.au/contact-us/ for more information.

On the back of this month’s RBA announcement the Australian lending landscape has entered uncharted territory with the official cash rate now sitting at 2%!

If you haven’t checked recently there are some fantastic opportunities available to restructure your finances, potentially saving you thousands in interest costs and most importantly set yourself up for the next investment opportunity.

Whatever the reason, now is the time to act!

Here’s how you can leverage the current low interest rate environment:

1) Get your property valued by the bank before they change their valuation policies

Property values are skyrocketing, especially in Sydney. Now is the best time to review your properties asset value and lock in a valuation at the top of the market before banks change their lending policies.

See article re pending policy change http://www.smh.com.au/business/banking-and-finance/banks-put-brakes-on-investor-lending-20150521-gh6imi?skin=dumb-phone

2) Our Finance Strategy – Extract your equity NOW, before the rules change

The higher the bank’s valuation on your property, the more equity you will have to reinvest in other investments.

We recommend extracting the equity from your property as cash and moving it into an offset account. What this will do is ensure that you have the capital ready for your next investment opportunity. If your loan is interest only, it won’t cost you anything to keep the money in your offset account.

The important thing is to maximise the amount of capital you have available for reinvestment. Ideally this amount should be 80% LVR (loan to valuation ratio) of the value of the property, as this will mean you can avoid paying Lenders Mortgage Insurance.

3) Look for the next investment opportunity

Now you are ready to invest in the next opportunity. Get advice from property professionals on which investments make the most sense for you and your personal circumstances.

Interested in reviewing your home or investment loan? Contact us for a second opinion.