It is approximated that about 20 percent of the Australians invest in property. However, of the 50 percent of the 20 percent who invest usually sell their investments within the next five years. Most of these people are typically the first time investors who make mistakes by purchasing the investment grade. Melbourne off the plan townhouses are one of the most sought after assets in Australia. Let us address some of these pitfalls that investors in Australia make when investing in property such as the townhouses.
Choosing property that has been flagged down by banks
Numerous assets are usually flagged down by the banks because of the risks that they carry. Some of the property that is often considered as risky by banks include commercial property in a mixed zone, small apartments, defense housing, student accommodation, and serviced apartments just but to mention a few.
The banks usually raise the red flag against such banks by restricting the loan to value ratios or declining to offer loans against a particular property. Such property should be viewed as risky, and the investors should tread carefully when purchasing such property.
Brand new property
The brand new property is also referred to as the off the plan property in the real estate field. When scouting for a townhouse to avoid the real estate agents that offer free holidays or free cars once you buy the asset. In most cases the price of such incentives is usually added to the buying price of the given property.
Most of the buyers usually choose to go for the “off the plan” because of the significant stamp duty savings that they will be able to make as a result. The truth of the matter is that this amount is usually well calculated with the buyers ensuring that it is recovered in the purchase price.
Buying property in the wrong entity is another common pitfall that many individuals make. Most investors usually sign the agreements and contracts in haste without reading the available clauses. After signing the contract, they will then proceed to consult the financial experts on the ownership structure. There are different types of ownership structures that investors use when purchasing various assets.
Many investors buy property but by using the wrong ownership structure. The investors should discuss some of the advantages and disadvantages of the different structures with the financial experts before appending their signature to the agreement.