New immigrants in Australia avoid losing money from resale of real estate, three misunderstandings to be aware of
"Chinatown" news.china.com.au-Official media of Chinese Australians
Real estate resale usually makes more profits than losses, but real estate expert John McGrath reminds investors that resale losses may be due to wrong choices.
According to the Australian Property Observer Network, McGrath believes that the main reasons for the loss of real estate resale are the following three:
1. Sell the property too quickly after buying
For ordinary buyers, they should hold real estate for a long time. After buying the property, keep holding it, maybe make some improvements halfway, and don't consider selling it for at least 7 to 10 years. This is because in the past century, the value of Australian property has doubled in an average of 7 to 10 years. Given the cost of buying a house, you need to negotiate a good transaction price before you consider selling it. Therefore, a good rule of thumb is to hold real estate for at least 7 to 10 years, which is usually enough to experience a complete real estate market cycle.
If the buyer is really lucky, the property purchased before the boom in the property market may be sold in a shorter period of time and will be very profitable. But even so, he still recommends holding the property for as long as possible.
2. Purchase real estate in second-tier locations
This can be avoided through rigorous research.
Don’t buy real estate in towns with declining populations or areas that depend on one or two major industries, especially unstable industries such as mining and tourism. When choosing an area in an urban area or street, chat with an agent and try to become an expert in the neighborhood in your chosen area to ensure that you make the right purchase decision.
3. Excessive use of budget
Avoid using your budget beyond a reasonable situation when buying a house. Looking forward to the next 7 to 10 years, can you afford to repay a loan with an interest rate of 7-8% (long-term average)? For example, can you keep up with the repayment requirements when you are unemployed or taking long vacations to take care of children? Do you have enough savings for other unexpected expenses? Before buying a house, you need to answer all these questions in the affirmative. If not, you may end up selling the property to repay the debt, which usually results in losses.
He said: "Real estate is an expensive asset class, but it is also one of the safest and most reliable ways to create wealth in Australia."
"If you keep things simple, buy a good quality house in a good location, and hold it for a longer period of time, you have every reason to expect a very good result."
News compiled from "Australian Real Estate Observer Network"
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