Did you make a new year’s resolution? What are you looking to focus on this year?

We spoke to property experts to see which areas buyers, sellers, and investors focus on in 2017. Here are the key issues and areas your property strategy should address.

What five things should buyers focus on?

What new infrastructure or developments might affect the property you wish to purchase?

In 2017 buyers, should look at future developments and infrastructure projects that could have an impact on properties they wish to own, says buyer’s advocate and qualified property investment advisor Cate Bakos.

Here are the five things Bakos says buyers should keep in mind in 2017

1. How sure are you of your finance? 

“Lender scrutiny has increased. It’s not as easy to get a loan as it was,” Bakos says.

Lenders are now pickier about who they lend to and how much they lend, following APRA’s changes to borrowing criteria.  Off-the-plan and apartment buys are now heavily scrutinised by the banks.

2. Where is the market moving?

Despite the talk of demand and high prices, buyers need to look at where prices are actually heading.

“Assuming that prices will fall or remain the same is a little bit naive if we still have the same forces driving our market.”

3. What’s the real value of the property?

Look closely at what is going on in the area, to work out the value of the property you wish to buy.

“Be prepared to do your own research and track what properties sell for, or looking at recent comparable sales is really important if you want to be able to understand where you need to pitch your offer or prepare yourself for an auction,” she says.

4. Is it located in an appealing area?

Bakos says buyers should try to secure a property in an area that is desirable to residents in the long-term.

Factors such as proximity to public transport, good local cafes, parks and leisure facilities will attract more buyers to your area in the long term. This helps with the resale value of the property.

5. What zoning may apply to the purchase?

Bakos says buyers should check the zoning for the property and make sure the bank is comfortable with it, before signing an unconditional contract.

What five things should sellers focus on?

Make sure you have done all the repair jobs the house needs before you list the property for sale.

Buyers should do their homework and be ready to make their move in 2017, says LJ Hooker Head of Real Estate Christopher Mourd.

Here are the five issues he thinks sellers should focus on to make the most of market conditions this year.

1. Clearly identify the next step

Many people may sell the family home first before buying the next property. Mourd says sellers need to be prepared for what happens next, which could involve things like renting until the right property has been secured.

“Be clear on the next step. So you cannot make a decision on selling your home, you cannot make a decision on price on your home, until you understand where you are going to. Many people leave that quite open and hope to sell and then clearly research what they’re going to do next. I say research that up front,” he says.

2. Be sales ready

Buyers notice when all the little maintenance tasks and repair jobs have been completed before a property is put on the market, Mourd says.

Make sure the house isn’t cluttered and the garden is clean and tidy. Consult an agent first if the home requires major repairs to avoid over capitalising.

3. Know the competitive stock in your area

The price the bloke down the street got for his place isn’t that relevant, says Mourd. Go to open for inspection for homes that are similar, better and priced lower than your own to get a full picture of the competitive stock in the area.

4. Attend auctions before and after listing your home for sale

Be disciplined and attend all the local auctions, both before and after you list your home for sale.  This helps with things like demand, realistic price comparisons and buyer demographics for homes like yours.

5. Is site amalgamation an option?

Love thy neighbour and thy neighbourhood when you go to sell.

Research the zoning in your area, and if your home is in an area that is earmarked for higher-density housing, are your neighbours also willing to sell? If so you could attract a much higher price than selling on your own.

What five things should investors focus on?

Regional areas can offer good returns. Propertyology’s Simon Pressley says 2017 will be a big year for investors who need to look beyond the headlines.

1. Look forward, not backwards

“Don’t be a creature of habit and make a decision based on what’s happened in recent years. You need to look at the front windscreen, not the rear-vision mirror,” he says.

2. Be realistic about cash flow

Given the amount of investment loans that have been approved for new buildings, particularly in Melbourne and Sydney, investors need to be realistic about rental returns.

“Don’t be surprised if rents actually ease in those two big cities,” he says.

3. Take a good look at regional Australia

Pressley says regional towns with good essential infrastructure and a range of employment opportunities across different industries often have more affordable housing with strong rental returns, particularly areas with a local hospital or university.

He says places like Cairns (QLD), Bendigo (VIC), Tamworth (NSW), Busselton (WA) and Launceston (TAS) can offer great opportunities for investors.

4. Look closely at housing supply

The supply of housing stock, particularly in places like Sydney, is set to change. Investors need to thoroughly research the housing developments in the area where they wish to buy. It could be that four new apartment blocks have already been approved for construction in the same street.

5. Ignore your personal taste

Investors are buying a property to make money and you won’t live there says Pressley. Ignore how suitable the property might be for your tastes and lifestyle and think about what potential renters want.

– Danielle Cahill – Realestate.com.au

If you need any advice or assistance with the finance for your property strategy,

please give us a call on 1300 252 088

Rising house prices are making it increasingly difficult to enter the market. Parents who guarantee their children’s loans can help, but it is important to understand how this can impact the parents’ retirement or investment plans.

Being a guarantor generally means using the equity in your own property as security for your child’s home loan. It can help a first-home buyer to secure finance for a property they can afford but may not have a large enough deposit for, and to avoid the added cost of lenders mortgage insurance.

There are other advantages as well. By guaranteeing a loan, you’re helping your child enter the property market sooner and your child may be able to buy in a more desirable location and a home that better suits their needs. If they did it on their own, they may need to go further out of the city or perhaps settle for fewer bedrooms.

The risks

You may want to help your child but it’s important you don’t go into the transaction blindly.

The main risk of guaranteeing the loan is that, depending on the structure of the guarantee, you could be liable should your child default on the payments, either by taking over the repayment schedule or handing over a full repayment.

If you can’t make the payments, the lender may sell the home used as security. If this is still not enough, the lender may also require you to sell assets to meet outstanding debt.

Another major risk is a bad credit rating if default occurs.

Plus, if you need to borrow money for another purpose, your property cannot be used. If later you want to buy an investment property, you can’t use the equity in your home because it’s already tied up in the child’s loan.

Minimising the risk

There are ways to minimise the risks. The most common is using a monetary gift or private loan. This involves borrowing money against your property in your name, and then gifting it to your child. You should have a legal agreement in place.

Another way to avoid the risk is to buy the property jointly with your child. This means your name is on the title and you have a certain percentage entitlement.

When it comes to guaranteeing a loan, it’s always sensible to speak to a professional. You should also consider asking a legal professional to draw up a formal loan document outlining all conditions of the loan, interest rate and expected repayments.

Finally, outline an exit strategy. Financial situations change and, as the loan decreases with repayments, there may be an opportunity for you to withdraw your support to free up your assets without impacting your child’s loan.

To find out more on this and other mortgage related issued please give us a call on 1300 252 088.