4 Ways to Diversify Your Real Estate Portfolio

Real estate is a strong investment and it’s considered as one of the safest ones. So, for real estate investors, creating and developing their real estate portfolio is a must – and as with any other investment, diversification creates more advantages.

Why diversify?

Despite being a steadier choice, not all real estate investments are created equal. Hospitality, for example, works best around a more relaxed community. Commercial properties, on the other hand, bring more profit to busier streets. Taking location, market, and long-term goals into consideration, diversifying your real estate portfolio allows you to mitigate risks and ensure ongoing and steady growth.  

Now that you’ve found out why let’s talk about the how:

1. Diversify by sector.

The multitude of asset types available in real estate is one of the things that makes it unique. To diversify by sector, you can dive into different residential, commercial, or industrial properties.

Residential

These can range in size, from a single unit to apartments. Residential real estate is a relatively safe choice as the demand for housing is steady. Unlike commercial properties, though, residential units tend to have shorter lease lengths, averaging 6 to 12 months.

Commercial

Commercial properties – office buildings, retails spaces, shopping malls, and more – typically have higher income potential. Leases for this type of property also tend to be longer, averaging 3 to 5 years.

Industrial

Industrial real estate refers to properties mainly used for manufacturing, storage, production and any other similar activities. Even longer than the lease length for commercial spaces, lease for industrial properties can go up to 10 years.  This entails more security and higher return. However, since these types of properties are typically bigger, they are less accessible to individual investors.

2. Diversify through location

A real estate investment’s success is highly anchored to its location, as real estate is hyperlocal. One city may be experiencing a boom while the other is currently at a slowdown. If you diversify across locations, you can use the ups and downs of various markets to your advantage.

3. Diversify by asset class

When investing, it is also important to understand human behaviour. Townhouses, for example, are more profitable in good times – when people tend to rent bigger and more luxurious spaces. Mid-rise apartments, on the other hand, may provide a more moderately priced place, for tough times when people need to downsize.

If you diversify across asset classes, your portfolio will be able to hold up in all parts of the market cycle.

4. Diversify by strategy

You can also diversify your real estate portfolio through diversifying your investment strategies. You can vary your hold time – have a property that you would buy-and-hold and have another that uses the BRRRR (buy, rehab, rent, refinance, repeat) strategy. You may also buy a property in anticipation of selling it for a higher price after a year or two.

Even within a single property type or geographical market, you could counter downturns by diversifying your strategies.

As the real estate market is cyclical, it is important to spread out your investments so you may maximize growth and potential. Start by taking some time to review your current investments and strategies. Take your notes and identify potential risks and benefits. Lastly, remember that in the long-term, diversification will contribute greatly to your investment’s strengths.

If you are planning to expand your real estate investment portfolio and are looking for the next  best property to purchase, the professionals from Buying Perth Real Estate are ready with a free consultation. To find out more, give us a call at (08) 6215 0200 or email us at clive@buyingperthrealestate.com

Why You Shouldn’t Skip Having a Home Inspection

Before you finalize any home purchases, make sure that you conduct a professional home inspection first. Having a home inspection is important to gain a clearer understanding of the property’s condition. Professionals can also uncover any hidden problems and save you from potential pitfalls that might cost you in the future.

To explain further, here are some reasons you shouldn’t skip having a home inspection:

1. It establishes confidence in your purchase.

By having a pre-home inspection, you’ll be able to understand the current condition of your home. It will help you verify if the property you are planning to purchase is in safe and good condition. Everyone definitely wants to move to their new home with peace of mind. Without a professional pre-home inspection, aside from safety, you won’t have the confidence that what you are investing in is worth the huge amount of money that you are putting in. 

2. It can help you weigh options.

Pre-home inspection can reveal the pros and cons of the current condition of the home. In case the pre-home inspection report reveals too many issues and needed repairs for the property, you get to have a chance to weigh other options. Would it be better to buy a different property or build a new home? If the house you are planning to buy requires a lot of fixes, how much will be the overall cost? Also, consider the hassle and work needed for it to be repaired. If you think it will cost you a lot of time and money, you may want to reconsider making an offer on the property. 

This is why pre-home inspection is necessary – its results become one of the factors that you should consider when shortlisting property options and deciding whether or not to purchase a specific property. If you are not available to do the inspection before making an offer, make sure you seek the advice of an experienced buyer’s agent.

3. It gives you the power to negotiate a lower purchase price.

By knowing the current condition of the property, you get to have the power to negotiate a lower purchase price. An inspection report compiles the condition of the home in many aspects. If there are more issues, more repairs are needed. You can either have these issues fixed by the seller or agree that you are going to take care of the repairs only if they lower the property price. Hence, having a home inspection will give you the upper hand on the price negotiation. On the other hand, if it turns out that there aren’t many issues in the property, you are able to verify that you are getting your money’s worth. It will benefit you either way.

4. It can help you plan future repairs and replacements.

A pre-home inspection can give you knowledge of both minor and major issues that the property might have. Having these early warning signs can help you prepare and avoid problems from getting worse. You can plan how to repair and replace these items in the house and be able to budget and schedule them accordingly. An experienced buyer’s agent can tell you the best steps you can do for these issues.

5. It can save you money.

Having a pre-home inspection can save you money in different ways. First, you are saving money by avoiding buying a house that has many hidden and deeply-rooted problems. Second, you’ll be sure that the house you are buying is of high quality. Third, you’ll be aware of all the issues of the house, therefore, being able to prepare for future repairs and replacements. You’ll also be able to tackle these problems before they get worse and before the problems become more expensive.

Don’t ever skip having a pre-home inspection. You might not realize it now but having a pre-home inspection will definitely benefit you in a lot of ways and save you from future woes. You’ll be able to clearly understand the condition of the house you are buying and save money in the long run.

For more property tips and real estate consultations, make sure to contact Buying Perth Real Estate at 08 6215 0200 or send an email to clive@buyingperthrealestate.com.

4 Reasons Why You Should Retire In Perth

Want to move to a different city when you retire? Perth could be the ideal city for you. While each person will consider distinct factors when looking for a place to retire, Australia’s sunniest city is likely to tick most, if not all, of your boxes. Here are four reasons you should retire in Perth. 

1. Weather

If you want to retire in a warm city where you can enjoy plenty of time under the sun, then Perth is your best bet. With an average of 8.8 hours of sunshine per day, Perth is the sunniest city in Australia. December and January are the sunniest months in Perth, with an average of 12 hours of daily sunshine.

Perth’s idyllic weather makes the city a great place to enjoy the outdoors. You can take walks around the city’s numerous parks, enjoy al-fresco dining in a wide variety of open-air restaurants, or take a swim in one of several picturesque beaches. Regardless of the type of outdoor activity you like, Perth’s warm weather is sure to embrace you.

2. Affordability

When you retire, you want to make the most of your retirement income. Affordability is a major concern for any retiree, which is why it makes a lot of sense to retire in Perth. 

According to data, Perth is currently the most affordable capital city in Australia to buy a house in. As of June 2021, figures show that Perth has the lowest median house price among Australia’s capital cities. If you want to buy a retirement home in Perth, then now is the best time to start planning.

It isn’t just housing that’s cheap in Perth. The general cost of living in Perth is also affordable, and the prices of goods and services have significantly decreased over the last few years. Furthermore, the Economist Intelligence Unit has ranked Perth as Australia’s most affordable capital city. Perth is definitely an excellent choice for anyone looking to stretch their retirement money.

3. Healthcare

When deciding on a retirement city, easy access to healthcare should be one of your top priorities. Australia’s healthcare system has always ranked as one of the world’s best, and things are no different in Perth.

If you choose to retire in Perth, you’ll have access to numerous private and public healthcare. Some of the biggest hospitals in Perth include Royal Perth Hospital, Fiona Stanley hospital, Sir Charles Gardiner Hospital, Princess Margret Children’s Hospital, and Joondalup Health Campus. Plus, numerous Private hospitals such as the Mount Hospital, St. God of Johns Murdoch, and Hollywood Hospital.

As you age, you’ll also be able to get the services of specialists when necessary. Perth also has a large network of specialists for retirees and the elderly such as cardiologists, neurologists, ophthalmologists, and physical therapists.

4. Arts, entertainment, and culture

Perth is a great city for you if you want to spend your retirement admiring paintings, sculptures, and other works of art. The city has a ton of great art museums such as the Art Gallery of Western Australia (part of the Perth Cultural Center), the Museum of Performing Arts, and Linton and Kay Galleries.

If you’re a fan of concerts and live music, Perth offers many of those events as well. The Perth Arena (RAC) has hosted world-famous artists like Elton John, Journey, Michael Bublé, Cher, Celine Dion, Mariah Carey, Fleetwood Mac, and many more.

Prefer sporting events to live music? The Perth Arena also hosts sporting events that include basketball, tennis, and even mixed martial arts.

If you’re looking for the ideal retirement home in Perth, the experts at Buying Perth Real Estate can assist you. Our experienced buyer’s agents can help you find the best deal for the retirement home you’ve always wanted. Feel free to give us a call at 08 6215 0200 or send an email to clive@buyingperthrealestate.com.

11 Questions To Ask Yourself Before Buying Your First Home

Buying your first home is both a daunting task and a big milestone in anyone’s life. It’s not always a smooth journey, especially if it’s your first time. You need to prepare and equip yourself with enough knowledge about the home buying process so you can avoid any problems that you might encounter along the way.

Consider asking yourself these questions before you take the plunge.

1. Why am I buying a home?

You need to figure out your purpose for buying a house and to make sure that it’s a realistic reason to avoid any regrets in the future. Many young homebuyers regret purchasing their first homes because they later realized that the mortgage payments were too high, they were unaware of the closing costs, or they were unprepared for the home maintenance.

Make sure that you think long-term when buying a home. Consider all the financial factors and make sure that you are prepared to pay your mortgage, settlement fees, and home maintenance fees even if sudden changes in your life take place. 

2. What do I want in a home?

Aside from figuring out your purpose for buying a home, you need to decide on the features that you need. Are you looking for a single-family home? Do you absolutely need to have a garage or a laundry room? Are outdoor living spaces important for you?

Decide on your non-negotiables before looking for listings. Again, make sure that you are thinking long-term so that the house you buy will still be comfortable for you to live in for the years to come.

3. How is my current credit rating?

When buying a home, one of the most important things that you need to make sure of is your credit rating. Having a good credit rating can be the difference between having the ability to buy a home and not. If you don’t have a good credit rating, your might find it more difficult to find a loan that can finance your home.

4. How much is my savings?

You should have a considerable amount of savings before you purchase a home. Aside from saving up for the deposit, you also need to consider unexpected expenses such as emergency home repairs and broken appliances. Aside from home expenses, consider other emergencies such as losing a job, getting married, having a child, or getting in an accident. Before you buy a house, make sure that you’ll have enough emergency savings left to get you through surprise expenses.

5. How much can you afford to pay?

Set a budget. Decide on how much deposit you can afford to pay and how much of the monthly mortgage you can shoulder without straining your finances. Consider other day-to-day expenses, any current debts, and your savings goals. 

If you are paying more than you can, you are risking the possibility of losing your home. Don’t force yourself to buy a house that you can’t afford. Consider taking the time to prepare and save up more money so you can peacefully buy a house without the risk of straining your finances.

6. How will you finance the loan?

Determine the length of the loan you plan to avail. If you choose a short-term loan, you’ll be able to pay it all off after a few years only but that means you need to pay a bigger amount every month. If you choose a loan that can be paid within a longer period, the monthly payment will be lower but the interest rate may be higher and you will end up paying more money in total. 

To identify the best financing option for you, ask yourself how you will finance the loan. If you have a lot of extra money per month, it might be better to get a short-term loan. If you are on a strict monthly budget, it would be best to opt for a lower monthly fee arrangement. Discuss your financial situation with your buyer’s agent so he/she can help you decide on the financing option that’s best for you.

7. Have I considered all costs associated with purchasing a home?

The property price isn’t just the only cost that you need to consider when purchasing a home. There are many additional costs that come when purchasing a home such as settlement costs, property taxes, homeowner’s insurance, settlement fees, association fees, utilities, home maintenance fees, structural reports, and others. Make sure that you know about all these costs and take these into consideration when planning your finances.

8. How long do I plan to stay in my new home?

Purchasing a home is a long-term investment. If you plan to live in a home for a few years only, buying won’t be a good option for you. It might be more practical for you to just rent.When buying a home, it is ideal to stay in your home at least five to seven years before reselling the home. To determine how long you plan to stay in your new home, think about your plans for the next five years. Will you be changing jobs? Are you going to start a family soon?

9. Do I feel secure about my current job?

Aside from the additional costs that come with purchasing a home, being a homeowner also entails some expenses. In maintaining your home, you will eventually need to have some repairs and upgrades. Make sure that you have a stable income that will be able to finance all the expenses associated with owning a home.

10. Are you ready for all the responsibilities of being a homeowner?

If you’re used to renting, your landlord might have always been the one who took care of all issues related to the property. Once you have your own home, you will be your own landlord. You’ll need to take care of any issues that may arise – broken pipes, leaks, or broken appliances. Ask yourself if you are ready to take on the responsibilities of being a homeowner.

11. Do you have an experienced buyer’s agent?

The process of buying a home can be overwhelming. From planning, actually looking for the perfect home, and negotiating the deal, it would be better if you have someone who can help and guide you throughout the whole process. A credible buyer’s agent can make things go smoothly. They are more knowledgeable about the real estate market and will be able to come up with the best recommendations. They can help you negotiate with the seller and give you the best deal based on your needs and preference.

The experts at Buying Perth Real Estate are the best people to go to if you want to purchase a home in Perth. With multiple years of professional experience in Perth real estate, their skills and knowledge make them a credible buyer’s agent who can help you find your first home.

For a free consultation, do not hesitate to contact Clive at (08) 6215 0200 or 0412 926 190 or sign up here.

4 Financing Tips for First-Time Homebuyers

Before buying a home, coming up with a financial plan is one of the first crucial steps. With factors to consider such as mortgage and home loan plans, getting preapproval, and putting down a deposit, it can be overwhelming especially for first-time homebuyers. Making time to research and have a financial plan for your home buying journey is essential. Learning about financing basics lets you plan your steps properly and can help you save time and money.

Here are four financing tips for first-time homebuyers:

1. Build a strong credit score

Before you even start looking for your dream home, build a strong credit score first. This means clearing your debts, increasing your credit limit, and paying your bills on time. A credit score is a crucial factor that lenders look at when deciding whether or not a borrower is qualified for a loan. It directly affects the mortgage deal that your lender will offer. 

Borrowers with high credit scores are considered by lenders to be of lesser risk as they appear to be more credible in paying loans on time. This results in the lender offering a lower interest rate. Hence, you’ll be paying a lesser amount of money in total throughout the loan period. On the other hand, if you have a low credit score, the lender might not approve your application or give you a higher interest rate to compensate for the risk of the mortgage loan.

2. Choose between a fixed-rate or variable-rate mortgage

Another financing basic that you should know about is what type of mortgage is right for you. You’ll most likely be choosing between a fixed-rate mortgage or a variable-rate mortgage. In a fixed-rate mortgage, the rate does not change throughout the entire period of the loan. This is beneficial as you get to plan and stick to your monthly budget as you know how much you need to pay per month for the loan period of the fixed loan.

A variable-rate mortgage, on the other hand, is for buyers who expect to have an increase in their income throughout the course of the loan period. In a variable-rate mortgage, they may provide you with a lower introductory rate for the first few years of your loan. However, this type of mortgage is highly dependent on market interest rates. Hence, it can be risky if your income doesn’t grow along with the growth of your loan’s interest rate. 

3. Choose the right type of loan

There are different types of mortgage loans in Australia to choose from depending on what type of property you want to acquire and on your financial needs as a home buyer. It is important to take your time in researching the different types of loans that you can apply for and to carefully weigh which one will benefit you more.

For home loans based on property type, the most basic mortgage is the owner-occupier home loans for homebuyers who intend to live in the home that they are purchasing. If you are selling a home while looking to buy one to move in, the bridging loan might be right for you. Meanwhile, a construction loan is for those who opt to buy land and construct a new home from scratch. Investment home loans, on the other hand, are for buyers who intend to rent out their property.

There are more types of home loans to choose from depending on your situation. Each type of home loan provides special conditions for each situation, so it’s best to know the best mortgage loan. An experienced buyer’s agent can help you choose a reliable mortgage broker that can help you meet all your needs and financial capacity.

4. Prepare for the deposit

Before you decide to buy a house, it is important that you save up enough money for a deposit. A deposit is one of the first things that you need to pay for once you secure your mortgage. While saving up for a deposit, you also need to make sure that you have a secure source of income and enough emergency funds after you’ve paid the deposit. 

Make sure that you do thorough financial planning before purchasing a house to avoid straining your future finances. The buyer’s agent at Buying Perth Real Estate has the expertise and experience to help you get started in your home buying journey. Contact us at (08) 6215 0200 or 0412 926 190 or send an email to clive@buyingperthrealestate.com for enquiries.