Buying Investment Property in Victoria

Buying Investment Property

Buying Investment Property in Victoria?

Looking to buy investment property in Victoria? It’s a sound choice, yet one that must be executed correctly. This article tells you about buying investment property in Victoria, the types of deals available and the likely returns. Remember, buying property in Victoria has, on average, yielded in excess of 8% returns per year, and significant capital asset growth.

Property Investors in Victoria have received a lot of Government and economic support. Much of this support has come indirectly in the form of the lowest interest rates in history. This has been bad news for savers, but of course good news for those buying investment property in Victoria using mortgages.

Buying investment property in Victoria with cash outright is also a sure fire hedge against any rise in interest rates. Some investors look to buy properties in need of renovation or a change of purpose. They then renovate those properties and rent them out on a long term or short terms basis.

Once these properties have been renovated and rented then investors in Victoria may refinance the property by taking a mortgage over the property at a higher value, using the income to pay the mortgage and reinvesting the profit from the deal into more property in Victoria or elsewhere.

How easy is it to make money from buying investment property in Victoria?

Guess what? It may be unsuprising to learn that this model is an absolute pain the backside for potential property entrepreneurs in Victoria.

Which properties in Victoria should you buy? What areas of the Victoria housing market are going to give the best returns? Do you know the planning application process with the council? Or about the change of use regulations?

The question you have to ask your self about buying investment property in Victoria is how hands on you want to be?

If you want a new career as a developer or property project manager then go for it.

If, like thousands of other investors you simply want to take advantage of the UK property market, and earn more than the poxy interest rates available from the so-called people’s banks on the Victoria High Street then there are many investment funds, not readily available to the general public.

If you want a new career as a developer or property project manager then go for it.

If, like thousands of other investors you simply want to take advantage of the UK property market, and earn more than the poxy interest rates available from the so-called people’s banks on the Victoria High Street then there are many investment funds, not readily available to the general public.

Map of Victoria

Victoria is a state in southeastern Australia. It is the second-smallest state with a land area of 227,444 km (87,817 sq mi), the second most populated state (after New South Wales) with a population of over 6.5 million, and the most densely populated state in Australia (28 per km2). Victoria is bordered with New South Wales to the north and South Australia to the west, and is bounded by the Bass Strait to the south (with the exception of a small land border with Tasmania located along Boundary Islet), the Great Australian Bight portion of the Southern Ocean to the southwest, and the Tasman Sea (a marginal sea of the South Pacific Ocean) to the southeast. The state encompasses a range of climates and geographical features from its temperate coastal and central regions to the Victorian Alps in the northeast and the semi-arid north-west.

The majority of the Victorian population is concentrated in the central-south area surrounding Port Phillip Bay, and in particular within the metropolitan area of Greater Melbourne, Victoria’s state capital and largest city and also Australia’s second-largest city, where over three quarters of the Victorian population live. The state is home to four of Australia’s 20 largest cities: Melbourne, Geelong, Ballarat and Bendigo. The population is culturally diverse, with 35.1% of inhabitants being immigrants.

Victoria is home to numerous Aboriginal groups, including the Boonwurrung, the Bratauolung, the Djadjawurrung, the Gunai, the Gunditjmara, the Taungurung, the Wathaurong, the Wurundjeri, and the Yorta Yorta. There were more than 30 Aboriginal languages spoken in the area prior to European colonisation. In 1770 James Cook claimed the east coast of the Australian continent for the Kingdom of Great Britain, and from 1788 the area that is now Victoria was a part of the colony of New South Wales. The first European settlement in the area occurred in 1803 at Sullivan Bay. Much of what is now Victoria was included in 1836 in the Port Phillip District of New South Wales. Named in honour of Queen Victoria, Victoria was separated from New South Wales and established as a separate Crown colony in 1851, achieving responsible government in 1855. The Victorian gold rush in the 1850s and 1860s significantly increased Victoria’s population and wealth. By the time of Australian Federation in 1901, Melbourne had become the largest city in Australasia, and served as the federal capital of Australia until Canberra was opened in 1927. The state continued to grow strongly through various periods of the 20th and early 21st centuries as a result of high levels of international and interstate migration.

Victoria has 38 seats in the Australian House of Representatives and 12 seats in the Australian Senate. At state level, the Parliament of Victoria consists of the Legislative Assembly and the Legislative Council. The Labor Party, led by Daniel Andrews as premier, has governed Victoria since 2014. The Governor of Victoria, the representative of the Monarchy of Australia in the state, is currently Linda Dessau. Victoria is divided into 79 local government areas, as well as several unincorporated areas which the state administers directly.

Victoria’s economy is the second-largest among Australian states and is highly diversified, with service sectors predominating. Culturally, Melbourne hosts a number of museums, art galleries, and theatres, and is also described as the world’s sporting capital, and the spiritual home of Australian cricket and Australian rules football.

What are Property investment funds

These funds are hidden in plain sight. A global network of nods and handshakes at the Rotary club or on the Golf Course. Some people refer to these private investment vehicles as hedge funds or REITS. However, they are not. These are the funds that wealthy individuals and families invest in to get richer.

The barrier to entry to these exclusive clubs is around £50,000 although do remember that these private investor funds have collectively trillions of dollars under management.

And no, these funds are not available at the bank in Victoria, nor are they covered by the FCA. Your IFA or Accountant won’t bring you the opportunities because of course they won’t receive their greasy commissions.

Investment funds are not even allowed to advertise so you’ll never hear of them unless a friend recommends them.

If you don’t know about these firms, and opportunities then these investments aren’t for you.  You will need at least some experience with previous investments to be eligible and of course they are extremely picky about the investors they accept. They can afford to be. They don’t need your money, but they can put your money to work for you like never before.

Some of these funds don’t invest in property at all. You’ll know them as hedge funds. However, there are a considerable number of Asset backed Investment vehicles delivering significant income and long term growth.

Top three international investment properties realtors in the UK and Victoria

Physis Realty

Apollo Asset Management

The Carlyle Group

Is buying property investment in Victoria a good idea?

The top three actively managed funds directly significant offshore funds into the UK market seem to think so. Of course there’s much speculation about whether rates will rise and the uncertainty around buying property investment in Victoria. One fact remains often overlooked though, during the frantic and heated investment discussions around the dining tables of Victoria

Many individuals and families in Victoria want a safer, long term investment. They realize that property is a relatively illiquid investment and they simple was a property secured investment that provides a nice balance of income and capital appreciation.

Many people looking at buying investment property in Victoria have plenty of business and investment initiatives already in play, whether it be in Victoria, further afield or in a safer offshore investment fund.

Types of investment property in Victoria

It is important to understand the main types of property investment in Victoria

  • Undeveloped land in Victoria
  • Greenbelt land in Victoria (speculative investment)
  • Brownfield land around Victoria (and apply for planning)
  • Commercial property in Victoria
  • Direct Booking Vacation rentals in Victoria
  • Residential real estate property in Victoria
  • Operating property investment in Victoria
  • Distressed property investment in Victoria

Types of property investment deals in Victoria

The main types of property deals in Victoria are:

  • Buy to let in Victoria
  • Buy to hold
  • Serviced Accommodation in Victoria
  • Old Peoples Homes
  • Car Parks
  • Commercial Property in Victoria
  • Buy to change purpose

Buy to let in Victoria

A buy-to-let mortgage is a mortgage loan designed specifically for this purpose. Buy-to-let is the process of buying an investment property in Victoria that is specifically let and is one of the most common types of mortgage in the UK and many other countries. Obviously buy-to-let in Victoria does not have to be done with a mortgage and the sector does attract a significant number of cash buyers.

The purchase – to – rental of real estate is usually a residential property in Victoria, but some terms also include a small number of commercial properties, such as office space and retail space. As with a lease, the benefits of buying a rental property in Victoria as a landlord can include the ability to build up assets as house prices rise over time, as well as the benefit of a low interest rate.

The main risk is that a landlord may borrow to buy the property in Victoria, expecting the house to be sold at a higher price later, or that rental income will cover or exceed the cost of the loan.

Once the price has fallen, this lever could push the landlord into negative equity and, if he cannot meet the terms of his mortgage repayment, the bank will try to take possession of the property and sell it to get the money he borrowed. Banks in Victoria can lend to both landlords and tenants, suggesting that the capital is being used for investment rather than rental income, as a professional investor might do.

Buy to hold in Victoria

Long-term rental property in Victoria is widely considered one of the best ways to diversify your property portfolio. So buying and owning property means much more than just investing in a single property, it can bring you a variety of benefits, such as access to a variety of investment opportunities and the benefits of long-term ownership.

While some investors in Victoria may be confused or intimidated when they start, buying and owning property can be one of the best investments you can make if you do your due diligence before you start.

Buying and owning real estate is an investment strategy for investors in Victoria who buy and hold real estate over a long period of time. The owner usually intends to sell the property later, but leaves it to you to help you buy or finance it.

The rental income from the property in Victoria generates short-term income that can be used to pay off a mortgage or to invest money. The strategy of buying and holding property is one of the most common investment options.

The value of the Victoria property will increase over time and the investor will benefit if he is willing to sell it later. The investor benefits from being bought in the expectation that the value of the property will rise over time.

Investors considering a Victoria property purchase and holding strategy should do their best to calculate the potential income from renting out the property. The bottom line is that monthly income should exceed the cost of rent in the first year of ownership and annual rental income over the next five years.

If the investor plans to sell the Victoria  property later, possible profits should also be taken into account. Finally, any losses from taking out a mortgage or other type of property financing must be taken into account, as well as any gains from the sale.

Convert Victoria property to Serviced Accommodation

For property investors in Victoria, converting a home into a serviced apartment would mean higher rents than the normal rent increase. As a result, many people are buying investment property in Victoria and then converting these homes into serviced apartments to maximize yield.

The types of property used for serviced accommodation in Victoria are often the same as those you would use to buy to let. Where you have a guaranteed short-term rent, it’s not as rigid as renting out a property.

Disadvantages of investing in Serviced Accommodation in Victoria

  • Serviced accommodation is more of a business strategy than a property strategy, and the workload is far more intensive. Seasoned veterans liken serviced accommodation investing in Victoria to the same as running a traditional bed and breakfast. It’s no surprise that the other name for Victoria serviced accommodation is a holiday let.
  • You’ll need to furnish your serviced accommodation in Victoria
  • You’ll need to clean the rooms and change the sheets every time your guests leave.
  • Who does all the laundry?
  • Who does all the cleaning?
  • Who’s going to do all the work for you?
  • How are the guests actually going to get in?
  • Massive Payments to Online Travel Agents
  • Are you going to have somebody to do a meet and greet?

Buying investment property in Victoria to convert into serviced accommodation or holiday lets is not really considered an investment, because the amount of work involved make it a full time job.

Buying Investment Property

Buying Investment Property in Victoria