The Real Estate Institute of Queensland found that properties in the southern part of Brisbane’s CBD are among the fastest selling in Queensland.
Here is the average time to sell property in these areas:
- Cranley – 14 days
- Glenlee – 26 days
- Mansfield – 29 days
- Carina Heights – 31 days
- Annerly – 31 days
- Holland Park – 33 days
- Keperra – 34 days
- Chermside – 35 days
It is
clear that there is strong demand in these areas. Typically, whenever there is
strong demand, consumer confidence grows and when that happens, everyone just
wants to jump in the bandwagon.
However,
whenever demand is strong, it follows that prices will creep up. For most
people, rising house prices is a good thing. After all, that is why their
investing in the first place. They want to benefit from the appreciation of
their investment.
On the flip
side, when house prices are rising, it also means you have to pay more in order
to get in and not a lot of investors have that kind of money to invest, which
certainly makes building a property portfolio all the more difficult.
When
following the traditional process, the higher the sale price, the bigger the
upfront payment and the bigger loan. So in a rising market, it’s very easy to
overcommit to an expensive mortgage and once you are committed to an expensive
mortgage, you become at risk of going negative if the housing market suddenly
turns.
That is why
seller finance becomes a more practical alternative when investing in a rising
market. When using seller finance, you are capitalising on the flexibility of
payment terms to make the buying process much more convenient. For instance, in
the traditional method, an investor typically gets 80-90% financing from the
bank and then shoulder the remaining balance out of his own pocket. If house prices
average from $400,000 – $600,000, you’re talking about an upfront payment
ranging from $40,000 to as much as $120,000. And those numbers are staggering.
But
suppose you can adjust the way you pay. Rather than taking out a new bank loan,
what if you assumed the existing financing and then negotiated to pay the
remaining equity in increments? Isn’t that an easier alternative? And because
you don’t have to take out a huge hunk of your savings to get in the property
market, you are in a better financial situation to adapt to ever changing
conditions.
http://webuyhousesradio.com/why-seller-finance-makes-sense-in-a-rising-market-rick-otton-analysis/