So lets check out some strategies that investors can boost their borrowing capacity

1. Consolidate unsecured debts into your mortgage
Unsecured debts such as personal loans and credit cards have short repayment terms that force you to reduce your debts with expensive monthly repayments. These high repayment levels impact the bank’s Ability to Repay calculation for your mortgage because unsecured debt limits the amount of uncommitted funds you have available to repay the proposed mortgage.

2. Reduce excess credit, especially credit cards
If you have any unused credit cards or credit cards with limits that exceed your need for credit, then it makes sense to either cancel the limits or reduce the limits down to a manageable level.

3. Keep financial records up to date
One of the most common reasons borrowers find themselves well short of their anticipated borrowing levels is that they don’t have up to date financial information to prove their income levels to the lender.
Simply completing your tax returns on time can help your mortgage adviser secure the loan you’re after.

4. Select the right loan product
Even within one financial institution there can be a big difference in borrowing capacity levels based on the product you select.

5. Be aware that income type is treated differently by nearly every lender
Lenders can be very selective when it comes to the type of income they include in their repayment capacity calculations. Some income types may be excluded altogether by one lender and fully included by another.

6. Shop around
It may sound obvious but paying a low interest rate will save you hundreds of dollars on annual loan repayment commitments and thus increase your initial affordability.

7. Split your liabilities with your partner
If you’re planning to buy a property under your name only, you can split your expenses on paper with your partner

8. Use your properties as cross collateral
Using your property as cross collateral, or cross security, means you provide an existing property as a security to buy another property.

9. Extend the term of your loan
The longer the loan, the less the monthly repayments.

10. Save, save, save
Build up as much deposit or equity as possible.

So have a word with your mortgage broker or advisor and check out what type of borrowing capacity could suit you and how you can increase your borrowing capacity.

But here are common mistakes that can trip you up. Lets check out the 5 common mistakes a property investor should avoid.

1) Not having a property investing strategy
A lack of a property investing strategy or buying rules is probably the biggest mistake that new investors make.
Many investors will take the plunge and buy a property, and then try and figure out what their strategy is afterwards.  This is doing things in reverse.  To give yourself the best possible chance of success, you need to pick a strategy, then find a property to match it.

2) Lack of market research
If you are a property investor that dives in without doing the research you are making a big mistake.   Here are some of the things you should be considering.
•    Suburb / postcode performance trends – are prices going up or down where you intend to buy, what is the # of mortgage holders vs renters
•    How long properties are taking to sell in your suburb – therefore the level of demand
•    The median price for similar properties in the area
•    Study the area on the council website – so you can ascertain if there is planned developments / infrastructure etc locally which can increase prices in the future

3) Paying too much
Probably the biggest reason why a property investor doesnt make money is by paying too much for the property in the first place.
If you are relying on third party advice it’s easy to see why this may happen when the bank, valuer, vendor, agent etc will all have a different, biased opinion on what a property is worth.
In a market where there are motivated vendors and discounted properties a plenty you should be picking up properties at a discount and getting that instant equity.

4) Going it alone
It is the common mistake of first-time real estate property investor to take a DIY approach. Consider the benefits of having a team of expert professionals in place before making serious decisions about properties to add to your investment portfolio.  If you can get this team together to be called upon when you need them;
•    Contractors such as plumbers, painters, cleaners, pest controllers
•    Solicitor
•    Valuer
•    Property manager
•    Financier / mortgage broker
•    Accountant
•    Building / pest inspector
•    Real estate agent
Choosing the right experts will reduce your investment risk right from the start, and no doubt save you money and mistakes in the long run.

5) Missing out on opportunities because others have got there first
Most investors can tell you a story of an amazing deal that they just missed out on, “the one that got away.”
Hardly surprising when the traditional way to find property investments has been scouring classifieds or trawling through property listings websites, whilst there are over 1 million other property investors out there in the market.

Times and technology have moved on and there is no longer any reason for a property investor to make these common mistakes.

It’s this:  By modelling the success traits of the rich.

So how do you model when you arent sure what to model. Lets looks at the 3 traits of the wealthiest property investors in the country:

Success Trait #1: Don’t follow the crowd – do things differently.
If you follow the crowd and do what everybody else is doing, you’ll get what everybody else is getting.
So if you want a different result, you simply have to do things differently.

Success Trait #2: Be proactive.
Successful property investors are never reactive. They don’t plainly accept what the market or the economy throws at them. Instead, they are proactive and create their own economy. They create hot bargain deals, rather than waiting for them to fall on their laps.
That’s how they’re able to defy the economy and continue to make money – while the average investor loses during the economic downturns.

Success Trait #3: Maximise returns and build wealth safely.
Warren Buffet says:
Rule No.1: Never lose money. Rule No.2: Never forget Rule No.1.
Well, it’s no different in real estate. You want to maximise your returns and build wealth safely. You never want to lose money.

There are many pro’s and con’s to doing this. So let’s take a look at why you may want to purchase property off-the-plan?

What does buying off-the-plan really mean?
Buying off-the-plan means that you are entering into a contract to purchase a property prior to, or during the construction phase of the development of the property. Therefore there is no finished product for you to inspect.

There are many key differences between buying an existing property and buying off the plan:

1. Contract Details: A contract for purchasing off-the-plan will be much more detailed. The contract generally includes everything from proposed body corporate assets and expenses to an outline and schedule of finishes for each property.

2. Settlement Time-frame: While settlement for an existing property generally occurs 30 days from the contract date, purchasing off-the-plan allows more time (approximately 12 to 18 months or more) between contract date and settlement.This can always be used to your advantage as you can get yourself into a more stronger financial position in this timeframe.

3. Price: You will normally achieve a lower price for buying off the plan. Mainly due to developers wanting to encourage a faster sales rate.  But after the property starts constructions and the developer has met their financial obligations, the price will start to rise accordingly. So if you are to do it, get in early!

4. Tax benefits: There are tax benefits with new property due to depreciation. This benefit is greatest when the property is bran new, so this is maximised when you buy off the plan.

5. Secure property at today’s price:  When buying off-the-plan, an investor can secure property at today’s price yet often not have to settle for up to 18 months, or in some cases even longer. So you may only pay a small deposit when you sign the contract, but you dont need to pay back the balance until the property is complete. Therefore you can generally expect to make money in this timeperiod of construction. (not always the case if prices fall!)

6. Stamp duty savings: Depending where you buy in Australia there are more savings to be had here. For example Victoria will offer stamp duty savings to encourage new development. The concession is always greatest if the property is bought before construction commences.

7. Savings: If you buy property during the planning stages, or early on in construction, the extra time before settlement can be used to save money. You will only be paying the deposit upon signature of the contract and the balance of the purchase price does not have to be paid until construction is complete.

8. Greater choice: One of the greatest benefits of buying off-the-plan is that you get to choose your property from everything that is available in the development. It’s quite common for example, for penthouses, corner units, those with the best views and ground-floor apartments with private gardens to be sold first. This in turn, can offer better potential for strong capital growth and maximise rental yields.

Here we are showing many positive attributes about buying-off-the-plan but please ensure you do your research first before you commit to any investment stategy.

Getting started
Find someone who is doing what you want well and learn from them, try and avoid
learning the hard way. Find a mentor or program and learn.

Purchasing
If you plan you will have the time to find the right price for any item, the people who
do not plan normally have very limited time frames and are always forced to pay
higher prices. Research and compare your purchase prices so you know are getting a
fair or good price for whatever you are buying.

Property Feasibilities
Research and check your figures. It’s not just about adding up the figures, its about
adding the RIGHT figures. Know your numbers, and you will know your profits. It’s
not just about the financial side either, you need to know what the market is doing.
Understand the market first and work backwards.

Consultants-Engineers
Always allow for your consultants and engineers to inform the builder of the type of
design proposed, remembering the builder has to build the structure or building in
accordance with such design. The design will have a direct link to the cost to build.
Make sure your consultants can work with your builder, you need to help manage
these relationships.

Builders
When selecting a builder carry out thorough research on the builder including
previous clients projects and subcontractors used. You should get references of people
they have built for and worked for. Ask for addresses of sites that they have done, and
go and see for yourself. Make sure you site their current license and insurances so you
are protected.

Maximum Profit
To maximise your profit you need to use the space effectively, know the market and
meet the market with your product. You can hire consultants to help you ensure you
do this effectively. Architects and town planners can help you get the best use of your
land. But at the end of the day you will have to make the final decision, so do your
own research and know yourself what the market wants and what is selling well. Its
about supply and demand.

Communication
Treat people with respect, show integrity and honesty and be positive; this will bring
the best out of people. You need to have regular communication with your builder and
consultants. Problems will always arise; that’s the industry. Its about how you deal
with them and managing the problems to create a solution and feasible outcome.

You’re Team
Words of advice; do not fall into the trap of trying to be an expert at everything and
taking on too many roles. It’s like a great football team; use the right player in his or
her correct position at all times. This will ensure you deliver the outcome you are
after. So build your team and use the right person in the right discipline at the right
time. When it comes to to renovating or re-developing an existing property, it is
imperative to have a team of skilled (people) services to which you MUST tap into.

Property development can be fun – as long as the right research, and time has been allocated.

When you initially started out on your development project you would have done alot of research within the local market to determine supply and demand. This would have determined whether the suburb has the legs to suit the redevelop strategy’.

With all property strategies there will be elements of risk however, it is imperative to
understand risk-reward-ratios. Part of the due diligence carried out on a particular
project will also touch on the risk analysis on the type of strategy proposed. Generally,
the main risks involved in a redevelopment area are;
1. Redevelopment end sales
2. Time the products are on market
3.  Build and construction price increases
4. Unforseen work, services to boundaries and underground works
5. Market changes
6. Incorrect numbers within feasibility
7. Interest rate rise movements

Ensure you understand all the above before your price equation has been taken into effect. You will clearly understand what price point you can sell your project at if you take into consideration all the above.

Remember – as always – engage your consultants to look at putting up your development sites for sale. They may take a few % off of your asking price, but at the end of the day – if they have the market waiting to buy your development sites – you then have a market waiting. This would have been worked out at the beginning of your project and associated costs would have been inserted into your project feasibility.

So why do you need one.  If you want to start on site you may apply for a demolition certificate / approval to demolish an existing dwelling or building and carry out surveyors works, install temporary fencing ready for building etc.

But to build new structures or make major structural changes you will need an
approved development approval (DA). When it comes to redeveloping and statutory
authorities there are strict guidelines, which must be adhered too. A Development Approval (DA)  maybe required depending on the type of work to be carried out. There are a few paths to take when submitting an application to a local council; Exempt Development, Complying development or Development Consent.

A Development Approval DA is a legal document that allows you to undertake a development. Development Approvals specify the design and other documents that the development must follow i.e plans for the location and design of the buildings and the structural details for the building such as the depth of footings, this will form part of the Construction Certificate (CC) or Building Approval (BA) documents. The Development Approval will also specify the timeframe that the development should occur, including when can you start work on the development and when should you finish the development.

Development Approval can be made up of one or more types of Consent. There are
three types of Consent which are:

1. Development Plan Consent (planning consent)
2. Building Rules Consent
3. Land Division Consent.

Before discussing the DA requirements the level of authority when it comes to the Environmental Planning and Assessment Act 1979 No
203 (EP&A Act) and the Environmental Planning and Assessment Regulation 2000
(EP&A REG) is
This act’s have produced a number of instruments called;
1. State Environmental Planning Policies (SEPP)
2. Regional Environmental Planning Policies (REPP)
3. Local Environmental Planning Policies (LEPP)

Development Control Plans (DCP) The relevant planning authority may prepare a
development control plan (or cause such a plan to be prepared) if it considers it
necessary or desirable. To make more detail provision with respect to the development
to achieve the purpose of an environmental planning instrument applying to the land
concerned.

The development consent process can be approved, approved with imposed
conditions, rejected, and for further information required.

The acts have established two types of Developments;
1. Integrated Developments – is a development (not being a complying) that in
order for it to be carried out requires development consent and a number of
pprovals from each relevant approval bodies (roads, fisheries, rural, fire,
heritage, etc).
2. Designated Developments – are agricultural produce industry, aircraft facilities,
aquaculture, artificial water bodies, bitumen pre-mix and hot mix industries,
Breweries and distilleries, cement works, chemical industries, coal mines,
contamination soil treatment plants, electricity generating stations and the like.
Therefore, the integrated development will be used for residential renovations,
redevelopments and developments.

The level of authority when it comes to Development approvals and their instruments
from the top down;
1. Minister of Environmental Planning & Assessment
2. Corporation Body Ministers Vehicle
3. Director General, Department of Infrastructure Planning material Resources
4. Planning Assessment Commission Body Corporate
5. Local Councils

Therefore, at the residential level would only be dealing with local council level.
Redevelopers, developers and renovators require a level of understanding towards
council requirements, like the type of development applications and approval
processes. Research showed that the Murray Bridge, South Australia government
website provided a great insight into development approval procedures;
Development Approval cannot be achieved or granted until the different types of
Consent which is required for a development have been attained. Types of consent
required depend on the type of development project.

Developments that may impact on others will require Planning Consent. Planning
Consent is dealt with by a planner who assesses the application against the
Development Plan, the Act and the Regulations.

There is alot to take in when you read the above. If you aren’t sure… ensure you discuss this in detail with your team when it comes time for you to start thinking about this.

1. Structural adequacy
2. Fire Safety
3. Health and amenity
4. Equitable access for people with disabilities,
5. Energy efficiency.

Building consent can be issued by either Council or a “private certifier known as a
PCA”. A private certifier is an independent consultant. Land Division Consent is
Development that involves the movement of boundaries between properties generally
requires Land Division Consent.

Development projects may often require two and sometimes all three types of consent.
There are different types of consent because different professionals need to assess
different types of development applications.

Once a DA is approved, then we move towards the Construction certificate  and or Building Approval. This is an
important stage where it can have a direct impact on the cost to deliver, meaning this
is the designing stage. Understanding the project has been designed to achieve the DA
however, the architectural drawings supplied to council for DA level are only to show
the overall site layout, number of dwellings, floor square ratio (FSR), gross floor area
(GFA), height levels, shadowing, setbacks, site hydraulics – stormwater, sewer
diagrams and landscaping plans. The Construction certificateor Building Approval are the same pending on what state the project is in will determine either Construction certificate or Building Approval). This CC and BA stage will require
the working drawings which need to work within the DA drawings and conditions.

The working drawings are detailed drawings which will meet the building codes of
Australia and the relevant Australian Standards. Generally you will require the
following type of Engineers and or consultants to produce the necessary reports,
design briefs and drawings;
1. Structural Engineers
2. Geotechnical Engineers
3. Hydraulic Engineers
4. Electrical Engineers
5. Mechanical Engineers
6. Landscaping designs
7. Fire services Engineers
8. Acoustic Engineers
9. Building Consultants
10.Private Certifier