Unreal Property - Finance

The Unreal Property Tips for Finance.

1. Speak to a broker or your bank early in the process.
2. Preserve capital by using bank guarantees or deposit bonds for 10% deposit.
3. Discourage cross-collateralisation or cross-securitisation. Try to secure one loan with one property- (not always possible).The banks will try and take everything you have to secure their interest.
4. Consider interest only loans again to preserve cashflow.
   
   Many investors refinance their family home to release equity when purchasing investment property. This process does not have to be completed before purchasing, but it is prudent to have a clear indication it is possible.  

"The One Stop Shop"

Companies selling investment property make a virtue out of a one stop shop services whereby everything to do with the property is handled “inhouse”. This includes finance, conveyancing and property management. While marketed as a benefit to the investor, they benefit the marketer by:

1.  Absolute control over purchase process- if everyone the investor speaks to in relation to the purchase is "linked", there is no objective assesment of the transaction.
2.   Provides an additional income stream for the company.

Unreal Property does not recieve kickbacks from any mortgage brokers, conveyancers or property management companies for any work it refers. Work is referred purely on the basis of company's ability to provide a good level of service.

"The Magical Appearance Trick"

The moment it is known you are considering purchasing an investment property, all sorts of people will "appear" to sell you one. Be wary of accountants, financial planners and mortgage brokers who suddenly produce a hot property somewhere for your consideration. For reasons best understood by them, their property is better than anything else you might be looking at. (Hint- it has something to do with a fee!)

Make sure you ask how much commission the property marketer makes out of the transaction. There is no reason for this not be fully disclosed. If the commission level is unusually high, two tier marketing is a strong possibility. As a guide, Unreal Property usually receives a fee of 4% of which we rebate 2% back to the purchaser. We encourage caution for any fee above 5%. Unreal Property has been offered fees of 7-8% and has heard of fees of around 10%. With these fees, a good property investment is an impossibilty.