If you think of a house as a stock or bond, will you still consider whether you like it or not? The only thing to consider is its return on investment. More attention has been paid to overseas investments in recent years, and Chinese investments seem to have been favouring in the real estate industry. But to do a good job in real estate investment, first, we should get rid of the traditional thought bondage, secondly, we should understand the jungle law of the real estate market and avoid some potential pitfalls.
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First, several common misunderstandings of investment thoughts
Second, there are several pitfalls in buying houses overseas.
Third, the suggestions given by the experts on housing purchase
A few common misunderstandings of investment ideas focus only on the areas you are familiar with or used to
Most Chinese come to Australia to rent their homes and wait until the right time to buy their own. When choosing a home-buying area, the most common phenomenon is a greater willingness to focus on areas that you are familiar with or used to. Inertia is powerful, and it is understandable that people pay attention to their own familiar or customary areas, but habits do not mean the best fit, let alone the best. Many people are not so-and-so district houses resolutely do not consider, but too late to find a suitable house for their own, as a result, abandoned for a long time, missed the best opportunity to enter the market.
If the Australian housing market is booming, a year is enough to raise your budget by tens of thousands or even hundreds of thousands, and some even have to step back and lower the standard of buying a home while increasing the budget. Therefore, it is necessary to look wider, not just in the perfect areas, but also in the areas of investment value, which are likely to surprise us when we are not so familiar with them.
Choose to invest in real estate with subjective preference
On the choice of investment housing, it should be emphasized that the choice of self-housing is different from the criteria.
Countless times I heard investors complain that the balcony of an investment house was too small, that the bathroom had no windows, that the carpet was not a floor, that the appearance of the house was not novel enough, why not face the north and south, and so on, but in fact, for real estate investment, The house itself is just a product, a medium, a tool to help investors get investment returns.
If you think of a house as a stock or bond, will you still consider whether you like it or not? The only thing to consider is its return on investment. And how to use the least funds to bring the greatest return. In other words, property appreciation potential, rental returns, long-term holding costs, as well as your cash flow.
Will the house go up?
I am afraid this is the most common question. What I would like to ask is whether rent will rise, whether wages will rise, whether utilities will rise, whether prices will rise, and whether there will be inflation. If all of this rises, then how can house prices not rise?
In fact, the house price is the combination of all these things. At present, in Australia, inflation alone is about 4 percent per year.If the economic situation is good, if the investment house is chosen in a good location and has various potential factors for appreciation, then it can completely double in seven to 10 years. It`s even more than double. In addition, the most important point is the increase in immigration, with Melbourne increasing by about one hundred thousand a year, and the demand for housing has increased considerably.
For example, five hundred thousand of real estate, conservatively estimated to grow at an average annual rate of return of 8% within 10 years, would reach about 1.08 million after 10 years.
The mentality of "copying the bottom"
Almost every investor wants to buy at the lowest point and sell at the highest point. But where exactly is the lowest point? Believe that no matter professional, no matter how good investment experts can not answer this question. Only when house prices rise, we look back to know: Oh! It turns out that the last time I wanted to buy or not, it was the lowest point!
High throw low suction is every investor`s dream, but Buffett also said, want to copy the bottom is God`s things, not people do things. Investors should give priority to value rather than price.
The misconception of Public Transport
One of the most important things to consider when choosing a place to buy a house is public transport, but it is not desirable for many people to consider trains in many modes of transport as a single measure and ignore other modes of transport.
Australia`s public transport is a comprehensive network of trains, buses, light rail, ferries, and all kinds of public transport, not to mention Melbourne`s Myki has been fully popularized. With the continuous improvement of the public transport network, the difference of various public transport costs becomes smaller and smaller, and the price advantage of the train will no longer exist. So as long as transportation is convenient, it does not have to be confined to some form.
Some pitfalls in overseas Housing purchase
In recent years, the threshold of overseas home purchase has been gradually reduced, which makes the adaptive crowd develop downward from the top of the pyramid. In the overseas home buyers, many buyers in order to emigrate, study, investment and many other needs driven, they want to use an overseas property as a door to achieve their goals. But many big immigrant countries have the habit of easily adjusting immigration policies and thresholds, coupled with a lack of understanding of the local real estate market, and many overseas buyers are in trouble.
Buying a house is an empty space for green cards
Many buyers of homes abroad are driven by immigration demand, hoping to qualify for foreign residency, known as "green cards," when they buy property. In the housing and immigration agencies, many buyers believe that this policy is also applicable abroad. But in fact, virtually all western developed countries, such as the United States, Australia, Canada, Britain and so on, do not have a policy of home-buying immigration.
Some countries in southern Europe, such as Greece, Spain and Portugal, have introduced immigration policies that attract overseas investment to ease the downturn. But this kind of project immigration also has certain threshold requirement, does not simply buy a house can immediately emigrate, therefore the buyer must first understand the local immigration policy before buying a house.
Information asymmetry leads to high risk
Because of the lack of understanding of overseas home ownership, information asymmetry also brings more hidden dangers. As a result of the economic downturn and other factors, some countries` house prices will fall, while Chinese investors often lack knowledge of this, and some domestic intermediaries will hide the truth, resulting in heavy losses for investors. What is more, developers are affected by economic conditions and bankruptcy is frequent, resulting in investors "losing money and losing money", and disputes continue.
According to theory, people are not going to Africa and South America home purchase, most of the Europe and America market, where there is the most mature real estate market, mature enough to stagnate, there should not be so many jungle rules. However, like all business deals, some people want to use "information asymmetry" to blacken you, strange language, very different rules, complicated procedures, there are too many gaps in the process. Moreover, many people buy housing overseas, not only for investment, but also with multiple demands such as immigration, education and so on, which makes it easier to get around the trap.
Some investors` legal consciousness is not strong enough to suffer a great loss.
In addition, he notes, common scams include bad developers asking buyers to remit more than 50 percent of their money to their accounts. When buyers hear of this trading process, be very vigilant.
First of all, overseas property transactions should be remitted to regulatory accounts, which are regulated by local property committees and cannot be moved until the transaction is completed, so it is very safe. First-time payments for overseas properties are typically less than 30 percent, such as 15 percent for first-time payments in the United States and 10 percent for first-time payments in Australia.
In addition, Mr. Yang suggested that all overseas real estate transactions should be checked by a lawyer, who will confirm the transfer information provided by the authorized person during the transfer process, check the identity of the investor passport and the signature authorizer, and if there is an error, Lawyers will be held accountable so that buyers can safely buy their favorite properties even if they are unable to go overseas in person.
Overseas property itself has a 100-year history of development abroad, trading systems, trading processes are approved by government brokers, lawyers to help complete, funds are also unified access to regulatory accounts to ensure the safety of transactions. As long as the project is properly audited and the transaction process is carried out in accordance with the procedures prescribed by the world, there will be no security problems.
What time do you recommend buying a house in a normal and healthy real estate market according to your own situation?
A house bought in a normal and healthy real estate market can be used not only to live on its own, but also as a means of making money, and is safe and effective.
Australia`s real estate market, unlike other countries, has its own unique advantages; for example, high rent returns, relatively small investment, can be negative tax deductions, value-added effects are significant and regular, permanent property rights, no estate tax, and so on. If according to their own situation, investment in a few sets of relatively high value-added potential of the house, the pressure can also have a good return at the same time.
Do your homework in advance and make a field trip
Faced with such a complicated overseas home market, industry experts advise investors to do their homework in advance, understand how to avoid the risk of overseas home ownership, and beware of home purchase pitfalls. Overseas home expert Mr. Yang Ning told reporters that citizens in overseas home purchase had better be personally conducted on-site visits. He said that some illegal agencies, from overseas to obtain information on some projects, with the help of Chinese and foreign information opaque situation in the domestic price increase sales. Buyers should try their best to understand the local market price before buying overseas real estate. If you have the opportunity to visit the site, you should know the property situation and price of the surrounding projects. Mr. Yang Ning said that if it is not possible to get to the site, you can also learn about the real estate market in interested countries, the transaction process and the related fee flow from some official websites and large-scale quality websites.
The Choice of Real Estate Type and lot
McMillan (David McMillan), manager of Performance Property Advisory, a real estate consultancy, said the land portion of real estate was the main driver of value added, while the house part was the driver of cash flows. He said: "buy a house to buy land value account for more than 65%."
McMillan advised investors to avoid small towns, mining towns and areas with poor value-added records. In addition, the location of the property should not be on the main road, not adjacent to commercial or office buildings or gas stations, not adjacent to the railway, but should be near the railway station. Also avoid noise, safety, privacy issues of the property.
McMillan opposes buying "ordinary properties" because of a lack of scarcity, such as modern high-rise apartment buildings. If there are more than 20 suites in a building, and there are many utilities such as swimming pools, gyms, elevators, don`t buy a house in this building because the management fee is too high. And newly built suites are often low roofs, small bedrooms, poor natural lighting, limited parking spaces and storage space. These houses, the owner will not go to live for a long time. Such houses are always in the hands of gamblers.
epilogue
In a word, although there are certain risks in overseas investment, foreign investment can be a very good choice as long as we know enough about the local market and the laws and regulations of various countries to understand the corresponding process of home purchase.
