In the article, written by Paul Bird, REIV Chief Executive Officer, Geoff White, said growth in Melbourne’s north was being driven by buyers seeking affordability.
Low interest rates continue to stimulate demand but the uncertainty about negative gearing is causing some confusion among investors. The Daily Bulletin's property consultant, Jeff Grochowski, the founder of Accrue Real Estate, said today that buyers need to beware of property spruikers who are taking advantage of first time buyers.
"We have come across people who have been disillusioned by real estate agents. They know that they can save money by minimising tax and building a property portfolio but without property education, they can be scammed." Mr Grochowski said today.
In a hot property market with a long term history of steady price increases, people make the mistake of thinking that any property will do, to get started with a negative gearing strategy. That may be true, but all Melbourne property is not the same. There are better suburbs and there and property types that are in strong demand from tenants.
If you are going to buy a property, then any one will fulfill the role as a tax deduction but it may fail completely as an investment. The aim of negative gearing is to reduce the amount of tax that is paid from another income source by suffering a loss on owning while gaining income from property or investments like shares. Anyone can make a loss. The trick is to incur the manageable loss while astutely investing in real estate that will grow in value, be in demand from tenants, be low maintenance and high on depreciation items.
"Watch out for realestate sales people ( often from the major franchises ) who only show you one or two properties in one location and all of the same type. This can be a sign that the sales person is spruiking property that they own or have a more than professional relationship with. There might be bonuses on offer for selling a particular development that has not gone too well in the open market" Jeff Grochowski said.
All property is not equal and quite often the best projects are sourced from the hidden property market where new projects, repossessions and contract fall overs are quickly offered to well connected traders,.
When buying real estate in a growing market, take the time to speak to a lot of sales people, get advice about scams and work with agents that you grow to trust. Look for a trophy location that ticks all the boxes with its position close to key infrastructure like schools, transport and shops and having strong tenant attracting features.
About the author
Greg Rogers has been a property journalist since 1993 and has developed a large number of houses, units, sub divisions and commercial property in Australia. Property news tips wanted. Email firstname.lastname@example.org