The 7 deadly threats to property growth

The 7 deadly threats to property growth

Investment property provides a fantastic opportunity to make a tidy profit.  That is, of course, if you do your homework and buy at the right time, in the right location.

But although there are many long-term benefits to owning a piece of real estate, it can also be fraught with risk.  And quite often, the threat is entirely outside the investor’s control.

The current market presents no exception to this general rule.

Economists are keen to point out several factors that could jeopardise growth in both private and commercial sectors.

 

1. Rising rates

Undoubtedly, interest rate hikes are causing much concern among residential property owners.  But commercial confidence has been shaken too, preventing businesses from making assured decisions.  This may see fewer lease renewals for landlords.

 

2. Working from home

The work-from-home trend has created better lifestyle opportunities for private residents.  But it’s left a gaping hole in the CBD commercial sector, with tenants feeling uneasy about signing long-term leases.  This is not good news for landlords.

 

3. Inflation

Residential owners are being very cautious about spending.  But this has had a knock-on effect in the retail space, too.  Businesses are suffering because no one is buying.  They’re then at risk of needing to close their doors.

 

4. Energy costs

It’s without question that rising energy costs are hitting residential households hard.  But businesses are having to put their prices up to cover the cost of commercial rates too, making it harder to keep afloat. In turn, they may opt out of their lease.

 

5. Prolonged vacancy

With the increase of commercial costs, tenants may default on their lease or need to vacate.  Landlords clearly don’t want to be footing the bill for long-term vacancies.  And even though private vacancies are rare, landlords still need to find tenants willing to pay the soaring rental prices.

 

6. Tighter credit controls

It’s truly a banker’s game.  If the economy worsens, the first thing they’ll do is increase their lending criteria. This creates enormous challenges for investors in either sector.

 

7. Changing occupancy

Tenants are definitely spooked.  They may not be able to afford to maintain a lease agreement and want out.  That has them angling for shorter leases and break clauses – which would pose even greater financial danger for landlords.

 

So, if you want an investment that lowers the risk, guarantees the profits, and is gentle on your savings, let’s chat.  We’re all about keeping growth alive and protected.

Spring may not have sprung this year

Spring may not have sprung this year

Usually, around this time of year, housing auctions get a bit frisky.  As primed to blossom as the fresh October buds, the property market is eager to unfurl in all its glory.

Except for this spring.

The current climate seems to have frozen some investor momentum.

While listings have picked up despite the rate rises, buyers remain somewhat gun-shy.  And although volumes are up 68.1% from last year, it’s likely due to the flurry of COVID restrictions that were in place.

Even with increased choice for buyers right now, there are still many factors that may dissuade them from actually sealing the deal. Rising interest rates, high inflation, and affordability constraints will likely sway consumer confidence.

New Core Logic data shows the combined national residential property value dropping from $9.8 trillion to $9.7 million at the end of August.  That’s everything to write home about!

So it seems that, even though buyers and vendors are coming to price agreements, it’s all still a bit tentative.

Investor season will likely recover as the market finally acclimatises.  But it’s better to be ready for the unexpected, especially when you have a mortgage hanging over your head.  Or you’re desperately trying to save for that ever-elusive deposit.

That’s where we can help.

Our investment model allows you to spend less of your savings upfront and watch them quickly multiply.  It also takes on all the risk and crunches all the numbers to give you the best possible outcome.

Of course, we need to move with the market flow and supply chains, too.  But it sure takes the headache out of all the hard stuff.  And it gives you the golden opportunity to invest wisely without schlepping around town, hoping the next auction will be yours in the bag.  We’ll help put the spring back in your step without you even having to leave the house!

From Handicap to Handy Cap?

From Handicap to Handy Cap?

Residential tenants have faced an almighty financial handicap over the last few years.  With rental vacancies at an all-time low, rents continue to climb across Australia.  And to say that it’s made it tough for many would be a cruel understatement.

Some struggling families have even been left with no option but to live in motel rooms.  It’s outrageous.  Not to mention completely unsustainable.  And it’s a savage blow to those already just surviving on low incomes.

So, now experts are finally starting to talk rent control.

Because at the moment, it’s really a case of anything goes.  Landlords will happily put their rents up as they please, as long as the market allows it.  But could it be time to take a (long-overdue) stand?

The new proposal would mean tighter restrictions on rental increases during a tenancy.  This would ease some of the financial stress across the nation.

Unfortunately, this situation may only be beneficial in the short term. 

If we follow in Ireland’s footsteps, placing caps on rent and preventing evictions will inevitably disenchant landlords.  They’ll get tired of the intervention (not to mention picking up the financial slack) and opt out of the market.  This, in turn, will place even more strain on rental supply.

Sadly, many landlords treat their properties as a means to get rich rather than provide shelter for those in need.  But that only works if they buy the right investment, for starters.  Most fail to understand this.  So, we’re left with hordes of property owners scrounging for what little profit they can get, but never really getting ahead.  And thousands of homeless subsequently left stranded.

The smarter way to invest is to find a strategy that allows you to spend less while still guaranteeing the big returns.  And one that doesn’t rely on upping the rent, while still reaping the financial gains.  That’s where our property syndication model comes into play.  It’s not only a win for investors; it also frees up other housing for those who need it and keeps our rental prices stable.

Ask us about this alternative strategy today.  You can make a difference.

When obsessed is far from best

When obsessed is far from best

Having stuff is great.  I mean, we all need some stuff.  And having a secure roof over our heads is high on the list.  But some people become somewhat obsessive about what they have.  Rather than seeing the bigger picture, they let themselves get carried away.

 

This is especially true of property.

 

Many homeowners and investors begin to lose focus.  All too often, they fall prey to thinking that the more property they have, the more prosperous they’ll become. But this is not always the case.

The main driver behind buying multiple properties is equity.  Once you’ve paid off some of your mortgage, you own a portion of your house.  This gives you financial legroom to buy more.

However, there is such a thing as over-investment.  And it soon creates the following three major problems.

 

1. It ties up household savings

 

The property market can be volatile.  Just when you thought you had more equity and could buy more real estate, your dollar doesn’t go as far.  The market declines (sometimes for a good while), and you’re reluctantly having to dip into your precious savings.

 

2. It creates high household debt

 

According to The Guardian, Australia’s household debt is among the highest in the world.  On average, household borrowing to disposable income exceeds 200%.  That means we’re taking out loans for twice as much as we earn.  That’s gotta hurt in the long run.

 

3. It’s not really wealth

 

The simple truth is many homebuyers will never pay off their mortgages.  They end up on a pay as you go treadmill.  And it leaves them taking one step forwards, two steps back again.  Owners find themselves asset-rich but income poor.  Rather than providing cash flow, their home merely sucks up the savings on rates, utilities, insurance, and maintenance.

 

But now, let’s look at buying property through our syndication model.

 

Not only can you own a slice of an entire block of residences; you (a) don’t have to spend as much, and (b) reap better rewards.  It’s the smarter way to invest.

 

Want to hear more?

 

Get in touch with one of our senior consultants today.  They know what’s best.

This year’s bet: crippling debt

This year’s bet: crippling debt

If you’re thinking of purchasing property in 2022, then here’s hoping you have all your financial ducks in a row.

Because the headlines are not shy in telling you that it’s a bad time to invest.  Between COVID setbacks and rising house prices, the tabloids are setting off financial alarm bells left, right, and centre.  Instead of playing happy homes, what you could end up with is a debt the size of Reservoir.

So, if you want to avoid plunging headfirst into arrears, then you should definitely steer clear of the following:

 

1. Buying property to pay less tax

 

Negative gearing sounds like something we should be doing.  I mean, who doesn’t love a good tax deduction?  Unfortunately though, this strategy only works if you can afford high-growth properties in desirable locations.  If not, you’ll simply lose money.

 

2. The fear of missing out

 

Here’s a tip: leave the emotions at home.  Don’t take shortcuts just to satisfy your short-term desires.  And don’t heedlessly jump on the first opportunity that comes along.  It’s usually not what you think.  Be smart and be patient.

 

4. Trying to get rich quickly

 

Similarly, thinking you can cut corners to make a quick buck is futile.  You can’t.  Property investment is a long game.  It can require years of research and strategy.  And it certainly calls for some solid personal due diligence.

 

4. Investing without knowing how it works

 

So you’ve owned a house, or even just lived in one.  That probably doesn’t make you an expert.  But many people fall prey to this idea, thinking they can just buy a nice place to holiday or retire.  Realistically, you need a sound investment strategy to suit your risk profile.

 

5. Poor cash flow management

 

If you’re not good with the logistics, it’s best to put your investor tools down.  You need the know-how and financial discipline to take on extra debt so that any cashflow problems don’t get worse.

 

6. Hoping to multi-purpose your investment

 

One little property can’t be the ring to rule them all.  Stick to one investment purpose.  Is it a property you’ll live in now, move to when you retire, use for holiday fun?  Or do you want to create some serious wealth?  It’s time to choose.  You can’t have both.

 

7. Launching before you’re ready

 

Don’t just invest willy-nilly.  Make sure your finances are in order; that is, you have a stable job with a steady income.  And you have enough stashed away just in case there are any unforeseeable events along the way.

 

8. Guessing the market cycle

 

The property space has seen countless investors attempt to predict the market, only to fail.  Rather than trying to guess what you think the market may or may not do, simply ensure you have enough money to afford investment-grade property.

 

Now, if that all sounds a bit overwhelming, don’t fret.  GSA has some good news.  We offer a plan that lets you spend less to make more – in less time!  And all the heavy lifting is done for you.  It’s the wise way to invest.

Come and have a chat with us about our upcoming projects today.

Why Mont Albert?

Why Mont Albert?

They say this relatively small, eastern suburb was most likely named after the husband of Queen Victoria, Albert, Prince Consort.  And it’s certainly become a realm unto itself.

A 30-minute train ride from the city, it’s a sunny, multi-cultural mix of locals ready to make you feel right at home.

The heart and soul of this friendly Melbourne nook is Hamilton Street.  Choc-a-block full of cosmopolitan cafes and restaurants, dedicated locals and hungry visitors are definitely spoilt for choice.  French, Italian, Turkish, Lebanese, Asian, Modern Australian – you name it!

And it’s not just for the grown-ups.  Stately-green Kingsley Gardens is the perfect spot for kids to run off some steam while parents lay a picnic on the freshly-mown lawns.  It’s the ideal destination for family trips and adds to the devoted sense of local community.

With its cosy village atmosphere, Mont Albert has all the charm and convenience you need.  From bakeries to fresh produce, post office to boutique florist, it’s more than just a locale.  Op shops, clothing, home furnishings, and health & beauty services add to a way and ease of life.

 

Residents have this to say of their beloved suburb:

 

“Delightful!”

“Great little leafy suburb.”

“The Eastern Suburb’s best kept secret.”

“Family-friendly safe haven from the grime of the city.”

“Affluent, family-oriented town.”

 

So, how will GSA add to this captivating lifestyle?

We’re about to build a suite of large, 3-bedroom, open-plan townhouses.  Ideal for families and downsizers, these luxury dwellings will soon become a renowned address.

Want to get in on it?

Then come and have a chat with us today.  We can meet in person or remotely. Whatever’s more convenient and comfortable for you.

This is your chance to score a piece of premium real estate without having to compromise your budget.  That means you have the power to change your financial future.  What have you got to lose?