Continued from Investing in prestige real estate: Part 1
A critical step on your prestige property journey is ensuring that you have the available finances. Naturally, these vary from person to person, but you need to ensure that the finance cost is both manageable and competitive. If you are taking out a loan, you want to ensure you are getting the best possible rate and not overpaying on your mortgage. If you are buying to let, then a poor mortgage rate could seriously affect your income stream from the property on an ongoing basis. At the same time, do not let the interest rate blind you to other more nuanced mortgage details. What are the early repayment fees? What are the hidden costs when you come to sell the property?
So you have found a property on the market that is within your budget, but is the right price to ensure a viable investment? It can be challenging to accurately assess the price of prestige and luxury property, especially in the current market. You need to ensure that you have a real estate agent and accountant that are experienced in prestige property appraisals in that area. In considering the property’s value, they will consider the value of the land and buildings, materials, fixtures and fittings, the pest and building reports, as well as the current property market trends.
A significant proportion of prestige properties are sold before ever hitting the market. So whilst domain.com.au and realestate.com.au are great places to start, do not limit your search to these platforms as these do not show all the available properties. So when you have narrowed down your preferred location, contact a local real estate agent in the local area who specialises in luxury property sales. They will often have a network of buyers and sellers, and thus properties for sale that are not being advertised on the general market. Not only will you be widening your pool of available properties, but you may find yourself as the sole buyer, which is a preferential position.
The key to real estate investment is knowledge, patience and timing. The most significant errors that investors tend to make is overpaying for a property and/or underestimating the cost of renovations and repairs.
It is impossible to predict the future, but by doing your research, not acting impulsively and ensuring that you have a team of experienced professionals at your side, you are on your way to sound property investment.
At Mercer & Cooper, we love all things prestige. If you’re looking to find your dream property on Hope Island, work with the experts who live, work and play on the Northern Gold Coast, and connect with us today.
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