As 2024 unfolds, the Australian property market is set to navigate through an interesting confluence of economic factors, housing reforms, and population dynamics. Here's a comprehensive outlook on what to expect in the property landscape this year.

Interest Rates and Market Dynamics

Interest rates have been a central topic in the real estate discourse and are expected to remain high into late 2024. According to Domain’s chief of research and economics, Dr. Nicola Powell, a potential cut in interest rates later in the year could revitalize the housing market, sparking increased activity and possibly another price upswing. Moreover, easing the mortgage serviceability buffer may offer quicker access to the property market for potential buyers​​.

The Pursuit of Affordability

In light of soaring median house prices, affordability is becoming a pressing issue for Australian homebuyers. Driven by various federal and state incentives, buyers are increasingly turning their focus towards more affordable housing options. However, economists like Peter Tulip warn that such incentives might inadvertently elevate prices, complicating the landscape for first-time homebuyers​​​​.

Housing Reforms: The Shift from NIMBY to YIMBY

A significant shift is anticipated in housing reforms, moving from the "not in my backyard" (NIMBY) sentiment to a "yes in my backyard" (YIMBY) ideology. This approach is expected to facilitate urban densification, possibly involving changes in local government planning powers to support visionary housing development strategies. This transition aims to reshape cities for the future, taking into account changing demographics and housing needs​​​​.

The "Not In My Backyard" (NIMBY) sentiment and "Yes In My Backyard" (YIMBY) ideology represent opposing perspectives on local development and urban planning.

NIMBY Explained:

NIMBY refers to the resistance by residents to a proposal for new development because it is close to them, often with concerns that the development may negatively impact their quality of life or the value of their property. Examples of projects often facing NIMBY opposition include homeless shelters, affordable housing projects, industrial sites, and infrastructure like highways or railways. The sentiment isn't against development per se but against its location or proximity to the opposer's residence.

YIMBY Ideology:

Conversely, YIMBY stands for "Yes In My Backyard," a movement that advocates for local development and housing projects to address issues like housing affordability, urban density, and community improvement. YIMBYs support development proposals that increase the housing supply, including high-density and affordable housing projects, recognizing the broader benefits to the community and economy. This group often pushes for regulatory reforms to facilitate easier building and development processes.

Transition from NIMBY to YIMBY:

The shift from NIMBY to YIMBY reflects a changing attitude towards urban development, where there is an increasing recognition of the need for more inclusive, sustainable, and affordable housing solutions. This transition suggests a move towards embracing development projects that contribute to urban densification and meet the housing needs of a growing population, despite potential local opposition. It involves a collective effort to prioritize the greater good over individual preferences, acknowledging that well-planned development can enhance communities and provide critical solutions to housing shortages.

This ideological shift underscores the importance of community engagement, transparent planning processes, and innovative housing policies that balance development needs with preserving community character and quality of life.

Population Growth Fueling Housing Demand

The Australian housing market's trajectory in 2024 will continue to be heavily influenced by population growth. With net overseas migration expected to remain strong, particularly from international students, the demand for housing is likely to remain high. In response, initiatives like the ambitious target of building 1.2 million homes by the national cabinet are aimed at easing the housing supply pressure​​​​.

The Evolving Rental Market

The rental market is expected to reach a tipping point in 2024. Despite the recent surge in rental prices across the country, driven by population growth, a slowdown in rent increases is anticipated, particularly in the second half of the year. Factors such as stretched affordability and an increase in first-home buyer incentives may ease demand in the rental market, potentially leading to a more balanced landscape​​​​.

Regional Market Variances

The property market's performance in 2023 exhibited mixed results across different regions, setting the stage for 2024. While a more modest rise in house prices is forecasted for the year, specific regions and capital cities are expected to be among the best performers. This diverse regional dynamic underscores the importance of localized market knowledge for investors and homebuyers​​​​.

Reflecting on 2023: A Surprising Turn

Looking back, 2023 was a year that defied expectations with robust property price growth across Australia, despite the rising interest rates. The market demonstrated resilience with a significant increase in buyer interest, sales volumes, and price growth, particularly in capital cities. Rental markets in major cities also witnessed substantial growth, although challenges persisted, especially for renters in capital cities due to rapidly rising rents and low vacancy rates​​.

As we navigate through 2024, the Australian property market presents a complex yet opportunity-rich landscape. It's imperative for stakeholders – whether buyers, sellers, or investors – to stay informed and adapt to these evolving trends for making sound decisions in the property market. Get an advantage over the market in 2024 by engaging an experienced buyers agent to help with your property goals.

Knowing how to value commercial property is a crucial step in becoming a successful commercial property investor. In Australia, several approaches are commonly employed to determine the value of commercial properties. These methods include the income approach, the direct comparison approach, and the cost approach. Each approach utilises different techniques to assess the property's worth. Understanding these valuation methods can help property owners, investors, and professionals make informed decisions. Let's explore each approach in detail, along with relevant examples.

Income Approach:

The income approach focuses on the property's potential income generation capacity. It is widely used for income-producing commercial properties such as office buildings, retail centres, and industrial facilities. Two commonly employed techniques within this approach are:

a. Capitalisation Rate (Cap Rate) Method:

The Cap Rate method involves calculating the property's net operating income (NOI) and dividing it by the capitalisation rate. The capitalisation rate represents the return an investor expects to receive from the property. For instance, if a commercial property generates an NOI of $100,000 per year and the prevailing cap rate in the market is 6%, the value of the property would be $1,666,667 (Value = $100,000 / 0.06). The appropriate cap rate is determined by considering recent comparable sales using the same metric.

b. Discounted Cash Flow (DCF) Method:

The DCF method estimates the property's future cash flows, considering rental income, expenses, inflation and potential growth. These cash flows are then discounted to their present value using a discount rate that reflects the investment's risk. For example, if a commercial property is expected to generate annual cash flows of $50,000 for the next ten years, and the discount rate is 8%, the present value of the cash flows would be approximately $378,024. Summing up the present value and adding any residual value gives the estimated property value. (The DCF approach calculates the Net Present Value of all cash flows over the investment horizon to give an estimate of today's dollar value, along with other important investment metrics such as the IRR, or Total Return.)

DCF is typically employed for assets worth $20 million or more, usually with multiple tenancies and various potential future scenarios. It allows for 'what if' scenario analysis and is therefore useful for investors seeking to quantify and compare different 'value add' strategies. However, the technique is inherently more complex and subjective owing to the need to estimate future events, such as inflation, and is therefore used in conjunction with other methods, typically 'direct comparison'. The additional complexity and subjectivity mean that the technique is not favoured by the courts

Direct Comparison Approach:

The direct comparison approach determines the property's value by comparing it to similar properties recently sold in the market. This method is suitable for a wide range of commercial properties and relies on analysing sales prices and adjusting for relevant factors. Two commonly used techniques within this approach are:

a. Sales Comparison Method:

The Sales Comparison method involves finding recent sales of comparable properties and making adjustments to account for differences. For instance, if a similar office building sold for $2 million, but the subject property has a better location and additional amenities, adjustments are made to reflect these factors. After appropriate adjustments, the value of the subject property can be estimated based on the sales prices of comparable properties.

b. Gross Rent Multiplier (GRM) Method:

The GRM method is often applied to properties with multiple rental units, such as apartment buildings. It involves dividing the sales price of a comparable property by its gross rental income to determine the Gross Rent Multiplier. For example, if a similar apartment building sold for $2.5 million with an annual rental income of $300,000, the GRM would be 8.33 ($2,500,000 / $300,000). This GRM can be applied to the subject property's rental income to estimate its value.

Cost Approach:

The cost approach estimates the property's value by considering the cost of constructing a similar property from scratch, deducting any depreciation. It is commonly used for specialised properties or those with unique characteristics. Two primary techniques within this approach are:

a. Replacement Cost Method:

The Replacement Cost method calculates the cost of replicating the property using current construction costs. Depreciation is then subtracted to determine the property's value. For instance, if the cost of constructing a similar office building is $5 million and depreciation is estimated at 20%, the value of the subject property would be $4 million ($5,000,000 - ($5,000,000 x 0.20)).

b. Depreciated Cost Method

The Depreciated Cost method starts with the original cost of the property and deducts depreciation based on factors such as physical deterioration, functional obsolescence, and economic obsolescence. The remaining depreciated cost represents the property's value. For example, if a commercial property was purchased for $1 million ten years ago and has depreciated by 30%, the value would be $700,000 ($1,000,000 - ($1,000,000 x 0.30)).

Conclusion:

Valuing commercial properties in Australia involves the application of various approaches and techniques. The income approach, market approach, and cost approach offer distinct perspectives on the property's value, considering income potential, market comparables, and construction costs. Each method has its strengths and weaknesses, and a professional valuer often considers multiple approaches to arrive at an accurate valuation. The Cap Approach and the Direct Comparison method are the most commonly used approaches, along with DCF for more complex assets.

Understanding these valuation methods empowers investors and buyers agents to make informed decisions based on solid financial analysis when conducting due diligence on a commercial investment property.

In the competitive world of commercial real estate, finding the perfect property to meet your investment needs can be a daunting task. With numerous listings, complex negotiations, and intricate market dynamics, it's essential to have an expert on your side. This is where commercial property buyer's agents step in. In this article, we will explore the role and benefits of these specialised professionals who play a crucial role in helping businesses navigate the complexities of commercial property transactions.

Understanding the Role of Commercial Property Buyer's Agents:

Commercial property buyer's agents, also known as buyer's representatives or buyer's brokers, are licensed real estate professionals who exclusively represent the interests of property buyers. They work on behalf of businesses and investors seeking commercial properties, such as office spaces, retail locations, industrial sites, or land for development. Unlike traditional real estate agents who primarily work with sellers, buyer's agents focus on protecting the buyer's interests throughout the property acquisition process.

Benefits of Hiring a Commercial Property Buyer's Agent:

Extensive Market Knowledge: Commercial property buyer's agents possess in-depth knowledge of the commercial real estate market. They are well-versed in market trends, property values, and investment potential. This expertise allows them to identify suitable properties that align with their client's investment goals and budgets.

Access to Exclusive Listings: Buyer's agents often have access to a wider range of commercial property listings, including off-market opportunities that are not publicly advertised. Their network of industry contacts enables them to tap into these hidden gems, giving their clients a competitive advantage in finding desirable properties before others.

Time and Resource Savings: Searching for commercial properties can be a time-consuming and resource-intensive process. Buyer's agents handle the legwork, conducting comprehensive property searches, evaluating potential options, and shortlisting properties that meet their client's criteria. This saves business owners valuable time and allows them to focus on their core operations.

Negotiation Expertise: Negotiating the best terms, purchase price, and concessions is a critical aspect of any commercial property transaction. Buyer's agents possess strong negotiation skills and are adept at securing favourable deals on behalf of their clients. Their objective approach helps prevent emotional decision-making and ensures their clients get the best possible outcome.

Due Diligence and Risk Mitigation: Commercial property buyer's agents perform thorough due diligence on potential properties. They assess factors such as zoning regulations, environmental concerns, lease agreements, property condition, and future development plans. This diligence helps clients make informed decisions while mitigating risks associated with the property.

Professional Network: Buyer's agents have an extensive network of professionals in related fields, such as attorneys, appraisers, inspectors, and lenders. They can recommend reputable service providers and coordinate the necessary inspections, appraisals, and financing processes required for a smooth transaction.

Types of commercial properties in Australia:

In Australia, there is a diverse range of commercial properties available for various business purposes. Here are some of the different types commonly found:

Office Buildings: These are commercial properties designed for businesses, professionals, and administrative operations, ranging from small offices to large multi-storey towers in central business districts or suburbs.

Retail Properties: This category includes shopping centres, local shopping strips, and individual retail stores where businesses directly sell goods and services to consumers.

Industrial Properties: These properties are dedicated to manufacturing, warehousing, storage, and distribution activities, such as warehouses, factories, industrial parks, and logistics facilities.

Mixed-Use Developments: These developments combine different property types, like residential, commercial, and retail, within a single complex, creating vibrant communities where people can live, work, and engage in leisure activities.

Hospitality and Tourism Properties: This category comprises hotels, motels, resorts, serviced apartments, restaurants, bars, and entertainment venues catering to travellers and tourists.

Medical and Healthcare Facilities: These properties include hospitals, medical centres, clinics, dental practices, and specialized healthcare facilities, providing suitable environments for healthcare professionals and patient care.

Childcare Centres: These are purpose-built facilities that provide early childhood education and care services for young children. They play a crucial role in supporting working parents and families by offering a safe and nurturing environment for children.

Land for Development: This refers to vacant or undeveloped land zoned for commercial use, offering opportunities for investors and developers to construct new commercial properties.

It's worth noting that each category may have further subcategories or specialised property types tailored to specific industries or niche markets. Commercial properties in Australia vary in characteristics, location, size, and facilities, presenting a wide range of opportunities for investors.

Conclusion:

In the complex world of commercial real estate, engaging the services of a commercial property buyer's agent can significantly benefit investors seeking to acquire suitable properties. From accessing exclusive listings to providing market expertise, these specialized professionals offer valuable insights and ensure that their client's interests are protected throughout the property acquisition process. By leveraging their knowledge, negotiation skills, and industry connections, commercial property buyer's agents empower businesses to make informed decisions and secure properties that align with their long-term objectives.

Landlord insurance is an important type of insurance policy that is designed to protect landlords from financial losses that may result from unforeseen events. It is a form of insurance that specifically covers landlords who rent out their properties to tenants. In Australia, there are many insurance companies that offer landlord insurance policies, and it is important for landlords to understand what it is, who needs it and why it is important to have it.

What is landlord insurance?

Landlord insurance is a type of insurance policy that is designed to protect landlords from financial losses that may result from unforeseen events. This type of insurance typically covers a range of risks, including damage caused by tenants, theft, natural disasters, and loss of rental income. Depending on the policy, it may also cover legal expenses related to disputes with tenants, as well as the cost of repairing or replacing damaged property.

What does it cover?

Here are some key aspects of landlord insurance coverage in Australia:

1. Property Damage: Landlord insurance generally covers damage to the rental property caused by insured events, such as fire, storm, theft, malicious damage, or accidental damage. The policy typically covers the building's structure, including fixtures, fittings, and permanent improvements.

2. Loss of Rental Income: If the rental property becomes uninhabitable due to an insured event, landlord insurance may provide coverage for the loss of rental income during the repair or rebuilding period. This coverage helps compensate landlords for the income they would have earned if the property had remained rented.

3. Liability Protection: Landlord insurance often includes liability coverage, protecting landlords against legal and financial liabilities if someone is injured on the rental property. This coverage can help cover legal expenses, medical costs, and potential settlements or judgments resulting from tenant or visitor injuries.

4. Malicious Damage and Theft by Tenants: Some landlord insurance policies in Australia offer coverage for malicious damage caused by tenants, including intentional destruction of property or theft of landlord-owned items. This coverage can help protect landlords from financial losses resulting from tenant-related damages or theft.

5. Rent Default: Landlord insurance may provide coverage if tenants default on rental payments or abandon the property, offering compensation for lost rental income up to a specified limit. This coverage can be particularly beneficial in case of financial hardships faced by tenants or unexpected rental vacancies.

6. Legal Expenses: Landlord insurance policies may include coverage for legal expenses incurred during disputes with tenants, including eviction costs or legal representation fees. This coverage helps landlords manage legal matters associated with their rental property.

As insurance policies and coverage options may vary, it is essential for landlords in Australia to carefully review the specific terms, conditions, and coverage limits offered by different insurance providers. Consulting with an insurance professional who specializes in landlord insurance can help landlords understand their options and select the most suitable policy for their specific needs and circumstances.

Who needs landlord insurance?

Landlord insurance is important for anyone who owns an investment property in Australia. If you are a landlord, you are responsible for ensuring that your property is safe and secure for your tenants. This means taking steps to prevent damage to the property and ensuring that it is well-maintained. However, even if you take all the necessary precautions, accidents can still happen. For example, a tenant might accidentally start a fire, causing damage to the property. In such cases, landlord insurance can provide financial protection to cover the cost of repairs or replacements.

Why is landlord insurance important?

Landlord insurance is important because it can provide financial protection in the event of unforeseen events. Without insurance, landlords may be liable for the full cost of repairs or replacements, which can be expensive. For example, if a tenant causes damage to a rental property, the cost of repairs could be significant. Landlord insurance can provide peace of mind by covering the cost of repairs or replacements, as well as legal expenses in case of disputes with tenants.

In addition to providing financial protection, landlord insurance can also help landlords to attract and retain good tenants. Tenants are more likely to rent a property that is well-maintained and protected by insurance, as they know that they will be financially protected in case of unforeseen events. This can help landlords to attract and retain good tenants, which can ultimately lead to higher rental income.

In conclusion, landlord insurance is an important type of insurance policy that is designed to protect landlords from financial losses that may result from unforeseen events. It is important for anyone who owns an investment property in Australia to understand what it is, who needs it, and why it is important to have it. By taking the necessary steps to protect their rental properties, landlords can help to ensure the long-term success of their investments.

As buyers agents, we always recommend that you speak with an insurance broker or insurance specialist to ensure you have the appropriate insurance cover and advice.

This article is intended to provide general information only and should not replace professional insurance advice.

Real estate in Australia is considered a significant contributor to the country's economy and underpins Australia's household wealth. Several factors affect the property market and property prices, and among the most critical are supply and demand. This article aims to provide a basic understanding of the supply and demand dynamics in property and their overall impact.

What is Supply & Demand?

Supply and demand in real estate refers to the relationship between the number of properties available for sale or rent (supply) and the number of buyers or renters looking for properties (demand). When there are more buyers than properties available, prices tend to rise, and when there are more properties than buyers, prices tend to fall.

Supply and Demand Dynamics:

Supply and demand are two of the most critical factors that influence the property market. The demand for housing is driven by various factors, including population growth, employment opportunities, and lifestyle preferences. In contrast, the supply of housing is impacted by factors such as land availability, construction of new housing, building approvals, building costs, and planning regulations.

Impact of Supply on the Property Market:

The supply of housing has a significant impact on the Australian real estate market. When the supply of housing is low, and the demand is high, it can result in a shortage of housing and therefore drive up property prices. In contrast, when the supply of housing is high, and the demand is low, it can lead to a surplus of housing, resulting in decreased property prices.

One of the biggest challenges faced by the Australian residential property market is the lack of affordable housing. The supply of affordable housing is impacted by various factors such as land availability, building costs, and planning regulations. To address this issue, the Australian government has introduced various measures such as grants and tax incentives to encourage developers to build more affordable housing.

Impact of Demand on the Property Market:

Demand is another critical factor that impacts the Australian real estate market. When the demand for housing is high, it can lead to increased property prices, making it difficult for people to enter the housing market. High demand can also result in bidding wars, where potential buyers compete for the same property, driving up the price.

On the other hand, when the demand for housing is low, it can lead to decreased property prices, making it easier for people to enter the housing market and secure a property. Low demand can also result in properties remaining on the market for an extended period, leading to decreased property prices.

Let's talk a look at some examples of supply and demand:

Low Supply vs High Demand:

• Number of available houses for sale: 25

• Number of potential buyers: 100

• Supply/Demand ratio: 0.25 (25/100) More buyers than sellers! (25 sellers vs 100 buyers)

• Result: A shortage of houses, and prices are likely to increase as buyers compete for the limited supply. This is when we see capital growth.

High Supply vs Low Demand:

• Number of available houses for sale: 100

• Number of potential buyers: 25

• Supply/Demand ratio: 4 (100/25) More sellers than buyers! (100 sellers vs 25 buyers)

• Result: A surplus of houses, and prices are likely to decrease as sellers compete to attract buyers in a market with an excess supply of houses.

Conclusion:

In conclusion, the supply and demand dynamics play a crucial role in the property market and hence why buyers agents and property advisors with years of experience put so much weight on this important metric as part of their due diligence. A thorough understanding of supply and demand is essential for property investors to make informed decisions, manage risk, and ensure a stable and sustainable investment property portfolio.

The real estate market is complex, and supply and demand are just one of many factors that impact property prices. Still, understanding these dynamics when buying a property is a crucial starting point for anyone looking to invest, develop, or participate in the Australian property market.

The Real Estate Buyers Agents Association of Australia, or REBAA, is a professional association that represents the interests of accredited buyer's agents across Australia. Established in 2000, REBAA has been working tirelessly to educate and empower homebuyers in their property purchasing journey.

So, why should you choose a REBAA member as your buyers agent?

First and foremost, REBAA members are accredited professionals who adhere to a strict code of conduct. They have a thorough understanding of the property market, and they can provide valuable insights into property trends, local market conditions, and the best deals available. This means that they are able to offer expert guidance throughout the property purchasing process, ensuring that you are making informed decisions that align with your goals.

Another important factor to consider is that REBAA members work exclusively for the buyer, which means that they have no vested interest in selling any particular property. Unlike traditional real estate agents, who often represent both buyers and sellers, REBAA members are solely focused on helping you find the right property at the right price. They can provide impartial advice and support throughout the entire buying process, from helping you identify suitable properties to negotiating the best deal and managing the settlement process.

In addition, REBAA members have access to a wide network of industry professionals, including property valuers, solicitors, and mortgage brokers. This means that they can provide you with valuable connections and resources to help you make the best decisions about your property purchase. They can also help you navigate any legal or financial complexities that may arise during the buying process.

Perhaps most importantly, working with a REBAA member can save you time and stress. Purchasing a property can be a complex and time-consuming process, particularly if you are unfamiliar with the market or the legal requirements involved. By working with a REBAA member, you can delegate many of these tasks to a qualified professional, freeing up your time to focus on other important areas of your life.

Overall, choosing a REBAA member as your buyer's agent is a smart decision for anyone looking to purchase property in Australia. These agents are highly qualified, impartial, and committed to providing exceptional service to their clients. They have the knowledge and resources to help you make informed decisions and navigate the complexities of the property market, saving you time, stress, and potentially even money in the long run.

If you're looking for a trusted and reliable buyer's agent, look no further than Jay Anderson Property, a proud member of REBAA. With years of experience and a proven track record of success, Jay and his team are dedicated to helping their clients achieve their property goals with professionalism, integrity, and expertise.

Yield is a key metric in real estate investing, as it measures the return on investment (ROI) generated by a property. It is a crucial factor to consider when evaluating the performance of a real estate investment and can impact the overall profitability of a property. In this article, we will discuss what yield is, how it is calculated, and why it is important for real estate investors to understand.

What is Yield in Real Estate Investing?

Yield is a financial metric that measures the annual return on an investment expressed as a percentage of the initial investment. In real estate investing, yield refers to the annual income generated by a property, divided by its purchase price or market value. The yield is a key indicator of the performance of a property, as it provides a clear picture of the income generated by the investment.

How is Yield Calculated in Real Estate Investing?

The yield in real estate investing is calculated by dividing the annual income generated by the property by its purchase price or market value. For example, if a property generates $26,000 in annual rental income and has a purchase price of $520,000, the yield would be 5%. The formula for calculating yield is:

Yield = (Annual Income / Purchase Price or Market Value) x 100

Why is Yield Important in Real Estate Investing?

Indicator of performance: Yield is an indicator of the performance of a property, as it provides a clear picture of the annual income generated by the investment. By evaluating the yield, investors can assess the profitability of a property and determine whether it is a good investment opportunity.

• Comparing properties: Yield can also be used to compare properties and determine which one offers the best return on investment. This can help investors make informed investment decisions and select properties that align with their financial goals.

• Assessing risk: Yield can also be used to assess the risk associated with a real estate investment. Properties with higher yields typically come with higher risks, as they may be located in less desirable areas or require more investment to maintain.

• Impact on return: The yield of a property can have a significant impact on its overall return on investment. Properties with higher yields are generally more profitable and provide a higher return on investment.

What is Gross Yield?

Gross yield is calculated by dividing the total annual rental income generated by a property by its purchase price or market value. Gross yield is expressed as a percentage and provides a snapshot of the potential income generated by the property before taking into account any expenses.

For example, if a property generates $26,000 in annual rental income and has a purchase price of $520,000, the gross yield would be 5%.

What is Net Yield?

Net yield takes into account the expenses associated with owning and managing a property. It is calculated by subtracting the annual expenses from the annual rental income and then dividing the result by the purchase price or market value of the property. Net yield provides a more accurate picture of the actual income generated by the property and the return on investment.

For example, if a property generates $26,000 in annual rental income, has expenses of $6,000, and has a purchase price of $520,000, the net yield would be 3.85%.

It is important to note that the expenses associated with a property can vary greatly and may include property management fees, insurance, taxes, utilities, repairs, and maintenance.

In conclusion, yield is a critical metric in real estate investing, as it measures the annual return on investment generated by a property. By understanding yield and its impact on the performance of a property, investors can make informed investment decisions and maximize their returns. If you're considering investing in real estate, it is important to understand yield and use it as a tool for evaluating the potential profitability of a property. With the help of a buyers agent that is also a qualified property investment advisor, you can develop a strategy for successful real estate investing that aligns with your financial goals and minimizes risk.

Investing in real estate can be a profitable opportunity, but it is important to understand the key metrics involved in evaluating the performance of a property. Understanding yield and the difference between gross and net yield is a critical step in making informed investment decisions and maximizing your returns. If you are considering investing in real estate, it is recommended that you seek the advice of a professional (buyers agent) to help you develop a strategy that aligns with your financial goals and minimizes risk.

Investing in real estate can be a great way to build wealth and achieve financial stability. However, without a proper investment strategy, it can also be a source of stress and frustration. A property investment strategy is a comprehensive plan for acquiring, managing, and disposing of real estate assets with the goal of achieving specific financial objectives. It outlines the target market, investment criteria, financing options, risk management strategies, and exit strategies. In this article, we will discuss the importance of having a property investment strategy and why it is essential for anyone looking to invest in real estate.

Why is a Property Investment Strategy Important?

A property investment strategy helps you set realistic and achievable financial goals, and align your investments to support these goals. This can help you stay focused on your objectives, even during periods of market volatility.

• Provides a roadmap: A property investment strategy acts as a roadmap, guiding your decision-making and ensuring that your investments are made in a structured and informed manner. It helps you identify potential risks and opportunities and make informed decisions based on market conditions and your personal financial situation.

• Reduces risk: A well-designed investment strategy takes into account the risks associated with real estate investments and outlines measures to mitigate these risks. This can help you minimize your exposure to financial loss and maximize your returns.

• Increases returns: A well-researched and executed investment strategy can help increase your returns on investment by making informed investment decisions and leveraging favourable market conditions.

• Facilitates better decision making: A property investment strategy provides a clear framework for decision making, helping you avoid impulsive or emotional decisions that can harm your investment portfolio. This can help you make smart, informed decisions that align with your financial goals and investment strategy.

Who Should Have a Property Investment Strategy?

Anyone who is looking to invest in real estate should have a property investment strategy. Whether you are a first-time investor or an experienced real estate professional, a well-thought-out investment strategy can help you achieve your financial goals and minimize your risk.

The Importance of Professional Advice

While it is possible to develop a property investment strategy on your own, seeking professional advice is highly recommended. A Buyers Agent who is a Qualified Property Investment Advisor (QPIA) can provide valuable insight into the real estate market, help you identify potential risks and opportunities, and provide guidance on the best investment strategies for your personal situation. Additionally, a property advisor can help you develop a personalised investment plan that takes into account your long-term financial goals and risk tolerance.

In conclusion, a property investment strategy is an essential tool for anyone looking to invest in real estate. It provides a roadmap for decision-making, helps reduce risk, and can increase returns on investment. If you are considering investing in real estate, it is important to seek professional advice to ensure that your investment strategy aligns with your goals and is tailored to your individual needs and circumstances. With a well-designed investment strategy, you can achieve financial stability and build wealth through smart real estate investing.

If you're considering investing in real estate, now is the time to take action and develop a comprehensive property investment strategy. With the guidance of a professional, you can build a roadmap for success, reduce risk, and maximize your returns on investment. Schedule a consultation with a trusted advisor today and start building your wealth through smart real estate investing.

WALE, or Weighted Average Lease Expiry, is a metric used in commercial real estate to measure the average length of leases for a property or portfolio of properties. It is a crucial metric for investors and property owners to understand, as it provides insight into the stability and cash flow of their investments.

In simple terms, WALE is calculated by taking the total length of all leases in a property or portfolio and dividing it by the number of leases. The result is the average length of time that a tenant is committed to a lease in a property. The weighting component of the calculation takes into account the relative size of each lease, so a large lease has a greater impact on the overall WALE than a smaller one.

A high WALE indicates that a property has a stable income stream, as tenants are committed to long-term leases. This stability can make the property more attractive to investors, as it reduces the risk of vacancies and loss of income. On the other hand, a low WALE suggests that the property is more vulnerable to market fluctuations and changes in tenant demand, as leases are shorter and more likely to expire in the near future.

WALE is also useful for property owners and managers, as it provides insight into the future lease expiry schedule. This information can help inform decisions around lease renewals, property renovations, and marketing efforts to attract new tenants.

It is important to note that WALE is just one of many metrics used to evaluate commercial properties. Other metrics, such as occupancy rate, rental yield, and capitalisation rate, can provide complementary information and help provide a more complete picture of a property's performance.

In conclusion, WALE is a valuable metric for commercial property investors, owners, and managers. By providing insight into the average length of leases in a property or portfolio, it helps inform decisions around stability, cash flow, and future leasing activity.

Example:

Let's say a commercial property has four leases, with the following terms:

Tenant 1 has a lease for 5 years

Tenant 2 has a lease for 2 years

Tenant 3 has a lease for 4 years

Tenant 4 has a lease for 3 years

To calculate the WALE for this property, we would first add up the total length of all leases: 5 years + 2 years + 4 years + 3 years = 14 years.

Next, we would divide the total lease length by the number of leases (4): 14 years ÷ 4 = 3.5 years.

So, the WALE for this property is 3.5 years. This means that, on average, tenants are committed to leases for 3.5 years. This can give investors, property owners, and managers an idea of the stability of the property's cash flow, as well as the frequency of lease expiries and potential tenant turnover.

It's important to note that this is a simplified example and that the calculation of WALE can become more complex in real-world scenarios, especially for larger portfolios with many leases of varying sizes and terms.

Now that you have a better understanding of WALE and its importance in commercial real estate, why not take the next step and find out more? Consider reaching out to the Jay Anderson Property team to gain a deeper knowledge of this crucial metric and how it can impact your investments. Contact Us

Summary of key findings:

Cooling investor sentiment

58% of investors believe that now is a good time to invest in residential property, which is down from 62% in 2021, and down significantly from the 67% recorded in 2020.

Investors return to metro markets

The pandemic-induced pandemonium for regional markets is dissipating with nearly 56% of investors tipping metropolitan markets as offering the best investment prospects (up from 50% last year). Regional markets remained in favour with 23% of investors (down from 25%), with coastal locations falling to 15% from 22% last year.

Investors are seeking out qualified advisers

90% of investors continue to believe that any provider of property investment advice should have completed formal training or education.

Property investors remain mostly optimistic but fewer looking to buy

About 58% of investors believe that now is a good time to invest in residential property, which is down from 62% in 2021, and down significantly from the 67% recorded in 2020.

About 37% of investors purchased a property over the past 12 months, up from 29% last year and the year before. Some 37% of investors are looking to purchase a property in the next six to 12 months, up from 35% in 2021, but well down on the 44% recorded in 2020.

The majority of survey respondents own one or two investment properties – in-line with historical averages. Nearly 22% of survey respondents own one property and nearly 25% own two. About four per cent of respondents had yet to buy an investment property. That said, there was good representation from first-time investors. Of all respondents who purchased in the past 12 months, about 16% purchased their first investment property in the year – the same percentage as last year but well down on the 29% recorded in 2020.

Of these first-time purchasers, 96% purchased an existing property (up from 81% last year) while just 2% purchased new or off-the-plan (down from 19% in 2021) and only 1% had purchased vacant land over the past year.

Among the first-time investors, about 29% (down from 37% last year) identified as rentvestors, with 45% of all investors indicating they would consider rentvesting personally.

Around 31% of property investors have some form of idea, plan, or strategy around their investing, however, 22% each said they had a “rough” or “fair” idea of their investment plans.

Please click on the links below to see the findings of the PIPA Annual Property Investor Sentiment Survey:

PIPA Annual Investor Sentiment Survey 2022

August 2022 PIPA Annual Investor Sentiment Survey Results

The 2022 PIPA Annual Property Investor Sentiment Survey of 1,618 investors was conducted online in August 2022

Buying a property can be a daunting and complex process, especially for first-time buyers. With so many variables to consider, it's easy to get overwhelmed and make costly mistakes. This is where a buyers agent can help. A buyers agent is a licensed professional who works on behalf of the buyer to help them find and purchase a property that meets their needs and budget. Here are some of the benefits of using a buyers agent.

Exclusively act on behalf of the buyer

Our sole position is to act exclusively for you, our client. A seller has a real estate agent representing them, and we believe a buyer should have the same in form of a buyers agent.

Expert in the field

"You don't know what you don't know" and whilst we know you 'can' do it yourself, there is so much at stake. You want to make sure you get it right. We obsess about research and data and have access to databases that most people don't. We work closely with our clients to design, recommend and implement a tailored strategy and property plan based on your personal circumstances.

Mentorship throughout the entire process

We guide you every step of the way, fostering and developing your personal understanding of the market to ensure you make informed and calculated decisions, to achieve the best possible result. We provide you with a central online platform to communicate with the key stakeholders involved and to track the progress of the property purchase. Important documents relating to your search and purchase are also stored here.

Access to off-market opportunities & pre-market opportunities

Access to residential and commercial properties that are not available to the general public. We are able to gain access to these properties through leveraging our industry networks. This provides our clients with the added benefit of having minimal competition on properties which can save both time and money.

We are seasoned negotiators

We draw upon our extensive experience and research to give us an advantage and leverage in the negotiation process to achieve the best possible price and terms. We also bid on your behalf at auction. We implement proven auction strategies and tactics in the lead-up and during the auction to maximise the likelihood of achieving the desired outcome whilst protecting you from over-paying.

Provide insight on current market conditions

Insights and recommendations on the best areas to buy/invest in for capital growth based on individual needs and property ambitions, empowering our clients to make the right choice and purchase their ideal property at the right price.

Experienced eye for identifying important due diligence

We leave no stone unturned when searching for properties. We undertake every investment property purchase with a focus on results. We adopt extensive research and intelligent decision-making by employing cutting edge technology to perform a deep dive into suburb, street and property level analysis to assist with the selection and review of our client's property purchases.

Alleviate stress and Save you time

Properties which seem 'ideal' on the internet can be disappointing when seen in person. Inspecting properties can take a great deal of time and often isn't practical. We do the running around for you, we source properties that suit your brief, attend inspections, provide photos/walkthrough video and will advise what to offer.

We refer our clients to trusted service providers

Introductions to our trusted service providers that have their best interest at heart. We can organise all professional services needed, including mortgage brokers, solicitors, building & pest inspectors, property managers, accountants, financial planners and quantity surveyors all from our network of tried and tested professionals.

We're in it for the long haul

Our service does not stop once the contracts have been exchanged. Once you have settled on a property, we remain a lifelong trusted advisor regarding real estate questions, needs or concerns.

Using a buyers agent can provide significant benefits when buying a property. They can save you time, reduce stress, provide access to off-market properties, offer negotiation expertise, provide objective advice, and save you money with a better purchase price. Whether you're a first-time buyer or an experienced investor, a buyers agent can provide you with the expertise and support you need to make a successful property purchase.

Seth Godin gave the best advice when he said you should “dig your well before you’re thirsty”. This tip transfers across to investing in property and in this article we will tell you why it is so important to have a property investment war chest at the ready and how you can build one to ensure you never miss out on that prime property purchase.

What is a property investment war chest?

In property investing, a war chest is a metaphor for a stash of money that has been set aside to be used when expansion possibilities arise. However, money is not the only thing you need at your disposal to secure your next property.

Accumulating assets to build wealth also means you need to accumulate resources to bolster your growing portfolio that will equip you to act when great opportunities present themselves, for example when an under-market-value property is up for sale.

So, what resources do you need in your war chest?

A strong financial record

No matter what the market conditions are, sellers are enticed by a contract that offers minimal challenges around finance, so it is imperative that you are finance ready and able to strike when you see a great buying opportunity. This means it is imperative that you are always able to prove that you have been saving consistently and that you can demonstrate discipline with your spending

Banks will view your finance application favorably if they know you are in control of your household cash flow. The simplest way to prove that you are is reflected in your bank statements. By providing statements that show not only a capacity to earn, but also disciplined spending habits and regular savings pattern, you will be well on your way towards having a mortgage approved quickly.

Liquidity

The ability to provide a healthy deposit on the day you make an offer will put you in a wonderful position to have your offer accepted. Only being able to put down 5% may not be enough to seal the deal with some vendors, and delays or other complications with accessing your deposit funds will weaken your position in the negotiation or in some cases, mean your offer is overlooked entirely.

If you suspect there is lazy equity in any of the properties you currently hold, then it is best that you work with your mortgage broker or finance provider to get valuations done and extract that equity so it can be converted into liquid cash and parked in an offset account ready to be used as your next deposit.

Fixed rate mortgages usually have break costs, and cross collateralized loans will be difficult to uncross, however, these challenges can be overcome in time. Before you jump into any kind of refinancing or making any other firm financial decisions, it is crucial that you understand the necessity of seeking guidance from your trusted lending adviser.

An understanding of true market value

Knowing how to identify true market value will prevent you from wasting time looking at overpriced properties, but more importantly it will give you the confidence to execute your deal faster than the competition when underpriced properties pop up on the market.

While it is vital that you follow sales data, there is often a lag of weeks or months from when a property is sold to when the prices are reported. Therefore, the best way to maintain an up-to-date feel for the market pulse is to get your boots on the ground and attend as many open for inspections and auctions as you can, week in week out.

Another benefit of being extremely active in your target area is that you will quickly move to the forefront of local selling agents’ minds and this may secure you an exclusive opportunity to purchase a property that hasn’t even hit the market yet.

A trusted team…on speed dial!

We always recommend having a team of advisors close at hand when considering a property purchase. These include a:

• finance provider;

• conveyancer / property lawyer; and

• building and pest inspectors.

• buyers agent

When you have found the perfect property, time is of the essence. If you love the place, chances are at least one other party will too, and having to scramble and source relevant professionals on short notice can be extremely stressful. Trying to get a call back or email reply or have a loan application approved when you are pressed for time is the last thing you want when you have found a great deal and need to move fast.

To save yourself from this stress, let your team know that you are on the hunt for a property. Ideally, you will ensure you have as much paperwork pertaining to your loan filled out in advance. To maximise your confidence when buying, your mortgage broker should be fully aware of your current financial position and will already have all of your information on file so that there are no delays when it comes time to exchange. Remember that not every vendor will agree to extending a cooling off period, so locking in your finance approval is paramount to a successful purchase.

Similarly, your conveyancer or property lawyer should be engaged in a timely manner, and you will ideally allow a couple of days for them to review a contract prior to your signing of it. Contracts of Sale are usually ready to be forwarded by email from the agent to the purchaser who can then send it straight to their conveyancer or lawyer for review. If you are on the hunt, let your conveyancer or lawyer know so that they can keep an eye out for your email and get their advice back to you as quickly as possible.

Building and pest inspectors can quite often be in high demand, so it is important to understand the availability of the local operators who will serve you well when it comes time to arrange an inspection on short notice. If you are stuck, ask your conveyancer or property lawyer for a recommendation.

If you are considering undertaking any kind of development on the property you will also need to account for the work involved in collaborating with a town planner who can help to determine if the property is suitable for your proposed plan.

You may also want to consider using a buyers agent. The real estate market is in a constant flux. Unless you are a property professional, it is difficult to be fully aware of everything that is going on in a local market. A buyers agent will have a deep understanding of the market and the true value of the property you are considering buying and will represent your fiduciary interest in the real estate transaction, which can make a huge difference to your overall success.

By keeping a watchful eye on the market, having a strong and consistent financial plan and preparing your team for a quick turnaround you will have all your ducks in a row and be ready to pounce on that next dream purchase.

Disclaimer: The information and comments contained in this article should not replace specific taxation, financial, legal or investment advice. For this advice, please seek professional assistance.

When embarking on your property investment journey, there are many factors to consider even before you have begun to think about searching for properties. While there are big decisions to be made for all property purchases – whether it’s a first-time purchase or your forever home – the questions we will focus on in this article are most pertinent to investment properties.

So, what should you be asking yourself before you begin?

What does it take to get started?

Some people might wonder “how much do I need?”, but it is far more important to ask yourself “what does it take?” because cash is just one thing you require to become a successful property investor.

In addition to your deposit, you will also need to be able to dedicate a certain amount of time and energy upfront in order to thoroughly self-educate and prepare your mindset.

Remembering that it is rare for a novice property investor to make money off their investment within a short space of time, you should ensure that your timeline to achieve a level of financial independence is set at around 15 – 30 years down the track. This doesn’t mean you won’t meet success quicker, but it pays to be realistic.

As well as being able to budget your time effectively, you will also need to become a person who sticks to a financial budget with great discipline. Far too often people cannot or will not stick to a budget because they fail to recognise that it is, in fact, a live document that requires constant monitoring and adjusting.

A budget should not simply be something that is written down on a piece of paper and filed away; it is actually a system that needs to be woven into the fabric of your lifestyle.

Again, be realistic. If you do not have a surplus at the end of each month, it will be almost impossible for you to invest in anything at all, much less property.

Once you can be sure you possess the financial acumen to make it as a property investor, you will need to think about what structures would be most suitable for you to hold your assets in.

Making the wrong decision can be costly, so it is wise to seek advice from an accountant or financial planner who can help you to determine whether it is best to hold your assets in your personal name, in a trust or in another entity.

If you have purchased property before, you will remember that there are a range of up-front costs to consider. These will, of course, apply to any investment properties you purchase.

While these costs can vary from state to state, the rule of thumb is 5% of the purchase price of the property. For example, if you were to purchase a $500,000 property, the 5% acquisitions costs rule means you will need an additional $25,000 on top of your deposit to cover these costs.

Deposit

You will need to have a deposit of somewhere between 10% and 20% of the purchase price of the property, depending on the lender and their policies. It is important to keep in mind that a deposit of less than 20% usually results in Lenders Mortgage Insurance being incurred.

Ancillary Costs

In addition to the deposit required to exchange contracts and secure the property, there are other costs associated with acquiring the property such as:

• stamp duty;

• lending charges;

• legal fees; and

• building and pest inspections

When, where & what should I buy?

All too often this question is split into three and people consider the ‘when’, ‘where’ and ‘what’ in the wrong order.

To become a successful property investor, you should develop a strategy based on these three factors, your circumstances and your personal goals.

When?

The property market is regularly described as being cyclical and economists or other experts may suggest ‘good’ and ‘bad’ times to buy. On a fundamental basis, yes, there are ‘good’ and ‘bad’ times to buy, but your own circumstances should determine when you buy. You are the most important factor when it comes to timing.

If you do not have a stable income or a solid budget that gives you a clear understanding of where your money is being spent each month, then now is not the time to buy.

You need to complete financial transparency before adding the expenses of an investment property to the mix as any deficiencies may be amplified and could even expose you to significant financial loss.

Conversely, if you have taken the time to educate yourself, diligently saved a deposit and maintain regular surplus cash flow to purchase a property that aligns with your long-term strategy and goals, now could be the perfect time for you to consider investing, regardless of what the media is saying about the market.

Fortunately, Australia will always present an opportunity to purchase a suitable investment property, so there is no need to feel pressured into buying property just because it might appear to be a ‘buyer’s market’.

Where?

In Australia’s property market, there are thousands of submarkets that each perform in different ways depending on their demographics and local economic conditions.

For example, some suburbs have a strong history of capital growth, with all fundamental indicators and due diligence pointing towards future growth. So, if you are not requiring a strong rental yield and your strategy is a pure capital growth strategy then those suburbs would be an ideal fit for your personal circumstances and requirements.

What?

“Asset selection is the last piece of the puzzle”.

What do we mean by this? It’s simple: once you have defined your strategy and purchasing requirements it will become extremely clear what property type you will be searching for.

For example, if your strategy is to buy a property with development potential then it is unlikely that you will be looking to purchase a two-bedroom apartment as the ideal property.

How am I going to manage my risk and protect my assets?

The best ways to mitigate risk are by investing only when you can afford to and acquiring the types of assets that align with your strategy. By adopting this methodology, you will find that your portfolio has an inbuilt defence mechanism right from the start.

Additionally, you must consider the responsibilities that come with being a property investor, not only to your tenants but also to the lenders who enable you to finance your portfolio.

Budgeting as a means to save your initial deposit is an achievement, but remember that managing your money after you buy an investment property becomes more crucial than ever as it also bears more risk if you make a mistake.

To avoid this, continuously monitor your income and portfolio-related expenses, always factoring in costs such as mortgage interest, rates and utilities, maintenance, property management fees, insurance and vacancy periods as this is where you will be able to noticeably identify the difference between your gross and net yield.

Jay Anderson Property is a Buyers Agent and is not licensed to provide financial, taxation or insurance advice and we strongly suggest you talk to the appropriate professionals to obtain advice that suits your personal circumstances, particularly in relation to insurances.

The following products are typically recommended for property investors and will provide financial security in case an accident or tragedy occurs:

• building & contents insurance

• landlord insurance

• income protection

• TPD insurance

• life insurance

Without insurance, you may need to sell your property prematurely if you can no longer pay your mortgage or related costs.

We hope you will ask yourself these three important questions as you make a start on your property investment journey. If you would like to know more about how these questions might align with your personal circumstances please feel free to contact us.

The Property Investment Professionals of Australia (PIPA) joined forces with the Property Investors Council of Australia (PICA) to conduct a short investor survey in mid-May, which attracted 1877 responses from across the nation.

The survey found that 72 per cent of investors were confident about the market’s short-term prospects – down only 10 percentage points from the investor sentiment survey conducted in September last year.

The survey results also found that the coronavirus crisis had not changed the investment intentions of 80 per cent of investors over the next six or 12 months.

The survey showed that investors were overwhelmingly optimistic about the property market over the next year.

Nearly 60 per cent of respondents indicated that the pandemic had not made them change their investment plans over the next six months, with a further 18 per cent saying the crisis had actually made it more likely they would purchase a property over that timeframe.

The survey results also showed about 30 per cent of investors were more likely to buy a property in the next six to 12 months because of the pandemic.

While the survey found that 36 per cent of investors had experienced a loss of income, outside of rent, during the pandemic, the vast majority, at 91 per cent, had not applied to pause their mortgage repayments.

Only a small percentage of respondents, or five per cent, indicated the crisis had made it more likely that they would sell a property over the next six to 12 months.

Most investors also indicated that they had the financial buffers to see them through the current economic uncertainty.

It’s clear that record low interest rates as well as the resilient nature of property during turbulent times are inspiring investors to continue with their plans.

The survey results are available here:

https://pica.asn.au/wp-content/uploads/2020/05/PICA-PIPA-Covid-19-Survey.pdf

Good buying exists not just in the residential sector but also for commercial property and in real estate investment trusts.

Don’t let the predictable media focus on house price fluctuation and auction clearance rates sway you from considering all the alternatives in real estate.

Here, we’ve broken down some key facets of investment in residential and commercial real estate, plus REITs. In doing so, we urge you to seek professional advice before making any decision. Your personal circumstances and financial goals are the most critical factors in any decision.

Residential

• Keen buyers can profit as the market initially softens because of the economic impact of the coronavirus.

• The residential sector is seen as low-risk, and historical data suggest that over a seven to a ten-year period property in cities and many regional areas will double in value.

• The barrier to entry is lower than in a booming market. You can seek out apartments for less than $200,000 as an initial investment in some markets. These prices will likely spring back when the virus crisis is over and confidence returns.

• If you’re looking to flip a property, then once the crisis ends, you’ll be able to take advantage of the increasing number of buyers returning to the market.

• If you’re thinking of renting out the property, then a price correction will make it easier to get your sums right. While rental markets are under pressure in Sydney and Melbourne, you should still be able to net around 5% per annum, plus additional capital value when the market returns to better times. Again, seek professional advice before making your investment.

• If you like the idea of a “fixer-upper”, then good buying should be available, although these properties can be scarce. If you don’t mind paint and plaster under your fingernails, a neat profit probably beckons.

Commercial Property

• Commercial property can provide twice the revenue stream of residential.

• Economic cycles have a big impact, which is why smart buying exists today. There’s a downside, of course. If you’re thinking of a long-term investment, you’ll have to factor in your own ability to survive such downturns.

• The barrier to entry is higher than residential. Because commercial properties have healthy economic streams, it’s hard to get into this sector for much less than $500,000, and even then the property is likely to be very modest.

• You’ll need a decent stake in your pocket to get into the game. Banks usually want a 30% deposit for any loan.

• Do your homework. Prices and on-costs vary for property servicing retail, light manufacturing, warehousing and so on. This is a specialist area and, if you are without experience, seek the advice of real estate professionals and your accountant.

• Given the changes in working behaviour created by Covid-19 with working from home becoming normal, you should also consider the long-term prospects of this sector carefully.

Investment Trusts

• You can use these trusts to get in the property game, but you do not gain the tax advantages of investments in the commercial or residential sectors.

• You won’t be able to borrow against a trust investment as you can with bricks and mortar, which may be an important facet of ownership for you.

• Quick access to cash is a definite plus. You can sell your stake in REIT much faster than you might sell a property.

• Returns of 20% are not unheard of, but the immediate future performance of REITs is difficult to gauge in the current economic upheaval.

• Most REITs focus investments in bluechip properties where tenants tend to be established companies with long-term leases.

• Investment is comparatively hassle-free. You’re not a landlord, so you’re not forking out cash to fix a bathroom leak or replace the bitumen drive that was washed away in a flood.

In summary, it’s best to talk to your real estate adviser and financial advisers to discuss the current opportunities and discover what best suits your financial strategy and goals. Make sure you receive professional investment advice tailored specially to your personal circumstance. The Property Investment Professionals of Australia (PIPA) is a good resource to help you find an adviser.

Top 30 Australian Property blogs!

In some exciting news, Jay Anderson Property has been selected by Feedspot as one of the Top 30 Australian Property Blogs on the web.

I am a huge advocate for new technology that creates efficiencies, ease of use and brings multiple stakeholders together. Property technology or “proptech” is a sector that is set to explode across the industry.

One platform that I use in my own property portfolio is Managed App.

Here are a handful of the many reasons why you as a landlord, will love it too!

1. A whole new level of privacy & security

The old-school property management software your agency used to use had very little in place when it came to protecting your contact information, history and payment information. The Managed App is the most secure Property Management platform available on the market.

2. No more waiting for rent

Get paid rent instantly. The Managed App payment system means rent is received from your tenant to your bank account within a few seconds, not at the end of the month. This is a cashflow game-changer for property investors and lots of existing users are capitalising on this feature by offsetting their home loans and saving on interest.

3. Maintenance & Improvements made simple

Track all requested repairs, maintenance & capital improvements for your property from start to finish. You can chat with your property manager within the request and can view photos, videos, PDFs, quotes and approval requests.

4. Investor tools

See all your property’s performance stats, home loan & equity tracking, cash flow forecasts and financial summaries in one place. You will also soon have access to our depreciation calculators and purchasing tools such as feasibility and home loans. calculators.

5. Seamless Communication

Everything your property manager does is logged in your profile - from maintenance through to rent reviews, routine inspections and everything in between. You can receive notifications, status updates and even chat with your agency directly from the app.

6. Access all your documents, reports and financials

Agreements, leases, statements, reports, by-laws, condition reports etc - you can find all this and more in the app so you no longer have to contact your Property Manager to chase copies when you need them.

7. More transparency on your portfolio

Managed App makes it simple for you to get in touch with your property manager, and it’s now easier than ever for them to get information to you quickly. By streamlining the property management process, your property manager can now spend more time working with you to maximise your returns. Managed App all about creating a better real estate experience and making life easier.

8. Consolidated portfolio view

Add all your properties, regardless of location or agency and keep them all in your Investor Profile. You can customise ownership entities, bank accounts and even invite other owners or consultants to access your property information.

The Property Investors Council of Australia (PICA) wish to inform you that a campaign lead by the NSW Real Estate Institute has commenced to highlight the potential imbalance between the way Landlords and Tenants are being treated in this state: The REINSW has set up a campaign called ‘Everyone Matters’ to help concerned landlord have a voice in this debate and hopefully to have the legistalation amended to be fairer for all. You can visit the page by clicking here In short landlord’s are calling on the Government to review and amend the Regulation to account for the following matters: - An obligation imposed on the Tenant to exhaust all avenues of Government assistance prior to seeking a rent reduction.

- Amend the definition of “impacted tenant” to include an additional requirement that the Tenant does not have access to unencumbered liquid funds, in all the circumstances, sufficient to pay the rent. It is unjust that a Tenant with enough funds to pay rent is excused from doing so because they have lost their job.

- Introduce a definition of an “impacted landlord” and provide protections to that class of Landlord. To do otherwise simply passes the financial stress of the Tenant to the Landlord who is already in financial stress themselves due to the COVID-19 pandemic.

- Introduce clear guidelines, setting out which documents the Tenant must provide to the Landlord as part of the application for a rental reduction.

- Introduce a requirement for Tenants to provide evidence of attempts to mitigate the Landlord’s loss caused by a rental reduction.

- Introduce a standard requirement for Tenants to substantiate a rent reduction request to allow Landlords to make a properly informed and fair decision.

- Introduce a requirement and make it clear that a Tenant must continue to satisfy the criteria of an “impacted tenant” not just at the beginning when they request a rental reduction, as appears to be the popular interpretation.

These measure will help ensure that those tenants who can pay their way under the contract they agreed to, do and those that can’t get the appropriate support to help them through this difficult period. PICA strongly supports this initiative and we encourage you to act by sending a letter to the Premier of NSW, following the instructions on the website below: Share Your Voice: http://reinsw.com.au/everyonematters We had great success in reducing the burden on landlord with the Queensland campaign and with your support, we can also provide a strong voice to this NSW campaign too. There is not much time so we need you to action this right now, as parliament is set to sit next Tuesday. If we don’t get our voices heard then, those who own property in NSW can potentially expect to be financially disadvantaged as a consequence. Now is the time to speak up before Parliament sits on Tuesday, 12 May 2020. Take action now – click here to access this information.

The 1000 assets study is a unique analysis of property investment data collated by MCG Quantity Surveyors in the course of preparing depreciation schedules across its national client base.

The 2020 report covers four datasets from schedules commissioned between January 2016 and December 2019. The data was also analysed chronologically with each dataset comprising 1000 investment properties, meaning trends are assessed using equal sample sizes over the time period rather than by defined date ranges. This approach reduces anomalies that can occur by comparing unequal sample sizes which can arise when defining data sets by time period only.

While the information is collated from depreciation reports nationally, the analysis also breaks figures down into subsets such as location, property type and investment type (e.g. renovation, new construction, existing home etc.) This has enabled MCG to observe trends in investor sentiment from quantitative analysis, and then draw conclusions based on their qualitative experience as well as information derived through their networks in the property market. Also of note, while the data does describe trends across an approximate four-year period, each 1000 asset dataset is an interesting frieze of Australia’s property investment market at a given moment. Of particular interest is the latest 1000-asset dataset which describes the sector from April 2019 to December 2019.

While the entire report reflects the culmination of five year’s work, progressive analysis since 2011 has allowed MCG to deliver compelling commentary to both their client base and across a range of media. For instance, much of MCG’s information around negative gearing and property ownership provided the foundation for news reports in the Australian Financial Review and News Corp outlets in the lead up to the Federal Election in 2019.

The aim of the 1000 Assets report is to present a comprehensive study of nuanced information collected directly from real life investment property case studies, with a view to removing the somewhat ‘insulated’ nature of algorithmically based, big-data analysis..

Some a the major trends identified in the report include:

Changes across the four years of the study: • An increasing in interest for new/off-the-plan investments over existing property, • A major rise in investors choosing townhouses as an investment, • An increase in the average number of units per development project, • A notable increase in investors building bigger, more expensive houses, • The amount paid for a detached house investment grew by around double that paid for

a unit over the past four years.

Data from April 2019 and December 2019: • Almost half of all investments analysed were renovated after purchase, with an average

spend of approximately $37,500 • Around 1 in 4 investors lived in their asset before renting it out. The average length of

pre-rental habitation was four years, two-and-a-half months. • The average size of a detached house investment is almost double that of a unit. • The average construction cost of a newly-built, detached house investment is: $353,473. The report also broke down some results across NSW, Vic and QLD.

You can view the report in full here: MCG 1000 Assets Study: 2020

The NSW Government has gazetted a Regulation to implement the National Code of Conduct for Commercial Leases (24 April 2020) The Regulation is made under two separate Acts the Retail Leases Act 1994 and the Conveyancing Act 1919 with non-retail leases covered under section 202 of the latter Act. The Regulation: - Commences (24 April 2020) and does not purport to be retrospective in application. - Does not cover leases entered into after today. - Lasts for six months. - Only applies to lessees who qualify for JobKeeper with turnover of less than $50 million in

the 2018/19 financial year. - Applies, for franchisee lessees, the turnover test at the individual premises level but for

lessees that are companies within a group, the turnover test applies at the group level. In

all other cases, the turnover test is applied to the business per se. - Includes internet sales within the definition of turnover. - Sets out the action a lessor cannot take (“prescribed action”) for certain breaches of

commercial leases during the six month period, including for failure to pay rent or

outgoings or not being open and limits rent increases. - Preserves the right of lessors and lessees to agreeing to take the actions which would

otherwise be prescribed, including terminating the lease. - Does not include a right for a lessee to unilaterally terminate a lease. - Imports the proportionality principle created by the National Code, specifically, by

requiring lessors to offer rent reductions, in the form of waivers or deferrals of rent,

proportionate to the reduction in turnover. - Creates a new dispute resolution forum in the Office of Small Business Commissioner and

requires lessors to submit to that process before they seek to recover possession, terminate

the lease or exercise or enforce any other right under the lease. - Preserves the right of either party to have the matter reviewed by a NSW court. - Ensures that landlords can exercise rights under the lease for grounds not relating to the

economic impacts of the COVID-19 pandemic.

The full Retail and Other Commercial Leases (COVID-19) Regulation 2020 can be viewed here

There is no doubt that COVID-19 will hurt many households and businesses financially, but we do need to remember that like all major global events, there will be a recovery.

As Australia flattens its COVID-19 curve, the discussion is starting about how we get the country back to normal in the coming months.

Tough, courageous decisions lay ahead but one thing is for sure, a healthy property market will be at the top of the post-virus economy wish list.

Nothing drives our economy more than a vibrant real estate sector and confident buyers. And when the turnaround comes, built-up demand will ensure momentum swings back to the sellers in a matter of a few weeks.

If you’re a smart buyer, you’ll have made your move before that happens.

Even in this COVID-19 crisis, the Australian property market is still transacting and there are excellent purchasing opportunities in different markets around the country.

There’s no denying that these are very unusual times. It’s natural to be cautious and concerned and be afraid of the unknown. But, economically, we are in a better position to recover than when the Global Financial Crisis struck us 12 years ago.

Firstly, we know what must happen to end this current crisis. When the GFC struck, there seemed to be no end to the tumult despite governments around the world throwing money at the problem for a decade.

Also, credit is much more secure today than it was back in 2008. Our practices around granting mortgages and secured loans are much stricter, and this has put our economy on a firmer footing.

These practices have curtailed property market growth with the volume of building approvals and residential vacancies dipping in many parts of Australia in the past two years. So, supply generally has been quite tight, frustrating buyers and sellers alike.

However, this tight credit environment has created pent-up demand, and governments will want to unleash this at the right time to stimulate the economy.

After every global economic crisis, there has been a rise in property prices, and there is no reason to suggest that this worldwide disturbance will be any different, as the underlying fundamentals are still solid.

So, right now, smart buyers will:

• Reassess their own financial strategy, finances and goals to capitalise on this unique

environment.

• Ask the real estate agents about properties that offer good value, and vendors who

might be keen to strike a deal.

• Calculate the financial benefits if the property is to be an investment. There’s every

chance you can get a 5% rental yield and a 3% interest expense.

• Make their move while others dither and doom-say over our future.

While the volume of properties on the market is down, but there are still buyers and sellers. Now is a great chance to hunt down a great value property, whether it’s your dream home or an investment property.

The fundamental purpose of housing is shelter (owner-occupiers and renters) that's why we don't see the same volatility that share markets have.

To leave you with a few quotes from one of the world’s greatest investors, Warren Buffett.

“Be fearful when others are greedy and greedy when others are fearful”

“Always invest for the long term”

“Someone is sitting in the shade today because someone planted a tree a long time ago”