Property investments are a popular choice for many Australians as they provide a regular rental income, long term capital growth and some tax saving benefits.
However, there are also a number of considerations you should make before you buy an investment property.
1. Do your research
Do your research some locations or types of properties make a better INVESTMENT choice than others.
Before you start searching for a particular property to buy, make sure you understand what to look for when selecting an INVESTMENT property
Do your research some locations or types of properties make a better INVESTMENT choice than others.
Before you start searching for a particular property to buy, make sure you understand what to look for when selecting an INVESTMENT property
2. Know your budget
When deciding how much you can afford to spend on your INVESTMENT property, make sure you include the ancillary costs such as:
- Property valuation fees
- Mortgage set-up fees
- Stamp duty & search fees
- Inspection fees
- Legal fees
- Ongoing maintenance & repairs
When deciding how much you can afford to spend on your INVESTMENT property, make sure you include the ancillary costs such as:
- Property valuation fees
- Mortgage set-up fees
- Stamp duty & search fees
- Inspection fees
- Legal fees
- Ongoing maintenance & repairs
3. Find somebody you can trust
A good property manager, or real estate agent, should always have your best interests at heart. They should advise you on aspects such as property law; landlord and tenant rights and responsibilities through to maintenance issues and whether or not to raise rent prices!
A good property manager, or real estate agent, should always have your best interests at heart. They should advise you on aspects such as property law; landlord and tenant rights and responsibilities through to maintenance issues and whether or not to raise rent prices!
4. Get talking
You can find a lot of information on the internet, but this may just be statistics. Talk to the locals in the area. They will be able to tell you about any problem areas; streets to avoid; local parks etc. Talk to us if you would like a free RP Data report. This will provide insights on average rent, property values, demographics and suburb reports.
You can find a lot of information on the internet, but this may just be statistics. Talk to the locals in the area. They will be able to tell you about any problem areas; streets to avoid; local parks etc. Talk to us if you would like a free RP Data report. This will provide insights on average rent, property values, demographics and suburb reports.
5. Ensure you can afford the loan repayments
Before you purchase a particular property, you need to consider the likely rental income it will generate.
- Will the rent be sufficient to cover the loan repayments?
- Can you cover the difference (if necessary)?
- How will you manage the loan repayments when the property is vacant?
- Will the rental income be sufficient to cover expenses such as managing agents’ fees, rates and strata fees (if applicable)?
- Can you afford to pay the on-going expenses if the rental income is insufficient?
- Explore your options with our mortgage calculator here.
Before you purchase a particular property, you need to consider the likely rental income it will generate.
- Will the rent be sufficient to cover the loan repayments?
- Can you cover the difference (if necessary)?
- How will you manage the loan repayments when the property is vacant?
- Will the rental income be sufficient to cover expenses such as managing agents’ fees, rates and strata fees (if applicable)?
- Can you afford to pay the on-going expenses if the rental income is insufficient?
- Explore your options with our mortgage calculator here.
6. Evaluate your borrowing options
When it comes to purchasing an INVESTMENT property, you have a number of loan options that may not be available when purchasing your own home.
These options include interest-only repayments and line of credit loans here.
As every option has its own benefits and disadvantages, it’s important to obtain sound advice that relates to your specific situation.
Explore your options with our mortgage calculator here.
When it comes to purchasing an INVESTMENT property, you have a number of loan options that may not be available when purchasing your own home.
These options include interest-only repayments and line of credit loans here.
As every option has its own benefits and disadvantages, it’s important to obtain sound advice that relates to your specific situation.
Explore your options with our mortgage calculator here.
7. Consider what you already have
Do you currently have equity in another property, be it another property INVESTMENT, or your home?
You could use this to help purchase your new INVESTMENT property.
Do you currently have equity in another property, be it another property INVESTMENT, or your home?
You could use this to help purchase your new INVESTMENT property.
8. Not every expense is a tax deduction
Be careful when assessing the tax benefits of purchasing an INVESTMENT property. The law changes regularly and is quite complicated.
For example, INVESTMENT property costs, like loan application fees and lenders insurance premiums, may not be an immediate tax deduction. In addition, if you use the equity in your own home to purchase the investment property, you may not receive the full benefit of any tax savings.
Before you start calculating the tax savings you expect to receive from your investment property, seek advice from your accountant or financial advisor.
Be careful when assessing the tax benefits of purchasing an INVESTMENT property. The law changes regularly and is quite complicated.
For example, INVESTMENT property costs, like loan application fees and lenders insurance premiums, may not be an immediate tax deduction. In addition, if you use the equity in your own home to purchase the investment property, you may not receive the full benefit of any tax savings.
Before you start calculating the tax savings you expect to receive from your investment property, seek advice from your accountant or financial advisor.
9. Assess the property
Get a full inspection of the property. Yes, it may be an extra cost, but wouldn’t you rather know about the faulty water service now, and budget accordingly, rather than discover this after you have purchased the property?
Get a full inspection of the property. Yes, it may be an extra cost, but wouldn’t you rather know about the faulty water service now, and budget accordingly, rather than discover this after you have purchased the property?
10. Look into the future
Property is a long-term investment. Prices will fluctuate, but the longer you can afford to commit to property, the better. New migration levels and a rental property shortage are crucial factors to consider when Investing in property.
Property is a long-term investment. Prices will fluctuate, but the longer you can afford to commit to property, the better. New migration levels and a rental property shortage are crucial factors to consider when Investing in property.
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