There are a variety of different reasons why people decide to invest in the property market, so it’s important to be clear on both what your property investment strategy will be and what you’re looking to achieve with your investment.
Developing clear goals allows you to consider the kind of areas and properties that are most suited to your needs. Broadly speaking, if you’re considering purchasing an investment property it would be for one of three reasons:
The other key factor which will impact which property you purchase is your investing timeframe. For example, you might want to invest with the aim of generating an income stream for your retirement. The timeframe may be 20 years into the future, and this will impact which properties and areas you choose to buy in.
The more you know about what’s involved with investing in property, the better you’ll be able to make informed decisions to best achieve your goals.
Our full online Property Reports clue you up on suburb statistics such as median house prices, rental returns, historical suburb performance as well as specific property information such as proximity to public transportation and schools.
Many potential tenants also seek areas that are close to recreational areas and shops, so it’s a good idea to include these features in your research. Other things to be mindful of include vacancy rates and any potential developments in the area that may affect future property prices such as amenities, zoning changes, housing, public transportation, parks, hospitals and stores
There are all sorts of ways you can up-skill – read books, take a course or look at reputable online sites. It’s also a good idea to speak to other property investors about their experiences. Consider speaking to your accountant or financial planner if you’re considering taking advantage of the tax benefits from an investment property.
There’s far more to buying a property than just the purchase price. Although you may receive a rental income, this may not be enough to cover all the expenses associated with the property. There may be property management fees, extra maintenance or repairs over time, and it’s also a good idea to budget for vacant periods when your property could be untenanted.
Make sure you’ve got a good grip on your personal finances before investing in property. Take a look at all your assets, your income and expenses and discuss them with your lender. They’ll be able to give you a good idea of how much you may be able to borrow to invest and you can then start looking at areas that suit your budget and goals.
Decide what you want to achieve before you make an investment. Is your goal to build wealth from capital growth? Will you buy using equity in your current property? Are you interested in rental income or negative gearing?
When you invest in property, it’s wise to plan for both the initial outlay and the ongoing costs before you make the purchase. Here we explore some of the key costs to purchase and maintain an investment property..
A home loan expert will call you once you have submitted your application to talk through next steps.
This information has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information and, if necessary, seek appropriate professional advice. Read the terms and conditions before making a decision if the product is right for you.