Hi Property Lover's
I came across this article on Australian Property Investor today which I thought had some food insight for people who are thinking of selling a property or holding on to it for an investment.
Rising interest rates aren't preventing people from considering an upgrade to a more expensive home, according to mortgage broker Loan Market.
Since the start of the year the company has experienced a 38 per cent increase in enquiries from owner-occupiers wanting to upgrade, says Loan Market chief operating officer Dean Rushton.
"Around 60 per cent of our customers are considering selling to then upgrade to a bigger property," he says.
"They mostly have a high level of equity in their existing home – sometimes as much as 75 per cent – and are wishing to upgrade into the next price bracket."
Rushton says interest rates are still below traditional average levels and the previous four increases haven't had an overly adverse impact on the residential property market.
Those considering upgrading to a new home may want to hang onto their first property as an investment because of the potential to gain from capital growth, healthy rental yields and tax breaks, according to Mortgage Choice.
Senior corporate affairs manager Kristy Sheppard says upgraders should consider Australia's housing shortage and strong population growth leading to more buyers competing for a limited number of properties.
She says hanging on to your property for a number of years and then selling it in a 'sellers market' will increase the likelihood of making a solid profit and having greater capital gains to work with will propel you further towards purchasing a more 'deal' home.
"However, keeping your first home as an investment property can be beneficial," she says.
"Holding on to what is often a smaller, less expensive property may be a profitable long-term investment if it's in a desirable location that sees strong demand for rental properties."
"Of course, you must be able to afford to repay a larger or second mortgage plus ongoing expenses and maintenance costs."
Sheppard notes that in this case the equity built up in the initial property can be used to secure finance for a second property and might help overcome today's stricter lending criteria.
This information was gathered from:
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Thanks for the post Property investment has always been one of the most common methods of investing capital. Many people know that investment property can be a lucrative business option and hence many investors consider it an integral part of their diversified portfolio.
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