Suncorp Basic Special

Suncorp Basic Product.

0.25% of interest rate for life of loan, at today is 6.61%

No establishment, monthly or annual fees

Full Doc applicants only, minimum loan of $250,000

No additional interest rate margin above 90% LVR

Must be fully approved by 17th September 2010

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Investment Property Expert comments on Investing

What types of investments are best?

There’s no one single right answer as each different investing strategy has it’s own pros and cons. It will depend on how much money you have,… see more  your appetite for risk, how quickly you’re trying to make money and how quickly you want to get there.

For most people that have a reasonable income, I believe the most guaranteed way to make wealth from property is to buy median priced properties in blue chip suburbs 5-15km from a major city i.e Sydney or Melbourne. The 5-15km location from a city is where the majority of people want to live that have high disposable incomes and there is a limit to how high you can build which limits supply.

Buying around the median price means that the majority of people can afford to rent it which means there is plenty of demand. That limited supply and increasing demand is the factor that causes price growth even if the economy is static.

When it comes to specifics on the property I would typically choose:

  • 2 bed units – easy for to people to pay $300/wk rent each for a two bedder as opposed to $450/wk for a one bedder, and most don’t want to share a 3 bedder
  • Parking – parking is a problem now and it will only get worse
  • Quiet st – no one wants to live on a busy noisy main road
  • Block under 12 units – it’s harder to get strata decision made if too many units. Boutique is also nicer to live in No lifts, gyms, pools – very expensive to maintain and tenants don’t pay more for them Second hand – new units sell for a premium and can’t be improved
  • Double bedrooms – no professional wants to be in a single bed
  • North Facing – the more sunlight the better
  • Balcony/Garden – everyone wants to enjoy some fresh air

I think a long term buy and hold strategy will give you a more guaranteed return as opposed to speculating and trying to find the next best suburb which may or may not grow. You can normally get more cash out by refinancing rather than selling and so as long as you can cash flow the property in the short term, you should make money in the long term.

Chris Gray

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Queensland Legislation regarding raising rents.

A big warning for investors. New legislation in Queensland is now in place allowing landlords to only raise rents once a year for existing tenants.

I would strongly suggest that with this in place, you sign up your tenants for 6 month leases only to start with. This means that if we have another year where interest rates start to bite, you will have an opportunity to recoup your margins from rents that will slip if left to be only once a year. We all seek returns, and in this highly letigious environment, lets do simple things to cover our bases first.

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Investor Behaviour

A great statement from Terry Ryder that is so true, the strong determined ones will take action at the right times.

One of quirks of investor behaviour is the tendency to take action at the wrong times. Right now it’s clear the property market is coming to the end of its recent growth phase – not surprisingly, given the loss of consumer confidence amid poor federal leadership on both sides of politics, the calling of an election and the Reserve Bank’s earlier mistakes with interest rates. This is the time for investors to become active: price growth appears to have stopped, market activity has declined and interest rates are stable. This constitutes a buyers’ market. Most people, however, will do the opposite: they will retreat into their shells and refuse to come out until the market is raging again – which is the wrong time to be buying. Remember this: no one ever became wealthy by following the pack. The pack always runs in the wrong direction.

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