Things to Know before making a Property Investment
Buying an investment property in Australia is one of the best ways to invest, which helps in increasing your wealth and securing your financial future. You need to keep in mind that how effectively you manage your investment will determine whether or not the investment helps you reach your financial goals. In this article, we try and look at things you should know before you make a property investment.
Choose the Right Property
Property investment is one of the best ways to financial growth. Choosing a property that is more likely to increase in value is the most important decision you will make, so buying at the right price is absolutely critical. Be careful purchasing real estate in an area that you are not familiar with, unless you have a property consultant that can assist in educating you, to actually know the area, and reasons to consider it. Good Property Consultants, some Lenders and mortgage brokers have valuable data on different locations and property developments. You should try and access this information to avoid picking the wrong investment property.
Know the Market
Look for properties in that area where there is potential for capital gains. Property experts regularly provide tips on up and coming suburbs. Also, you can access a lot of information on the internet. Things like planned development can affect the future value of a property. A planned bypass near to your property may mean traffic will be reduced and this may increase the value of your property quicker than expected, or improved infrastructure could see the area become more attractive and as a result increase in value.
Established vs New
Purchasing established property that is not in peak condition is an opportunity to improve the value of the property by fixing the place up can also increase your returns for both capital growth and rental income, however it can provide challenges surrounding renovation issues,planning limitations and your budgetted costs getting out of control.
Buying New property & property off the plan can limit the management, provide 3 – 12 months defect mitigation and 6 – 7 year building insurance, so you won’t find that the hot water service or fence need replacing when you haven’t planned it in your budget. From an investment perspective, the depreciation benefits to your tax position can be so beneficial that the ongoing cost of your investment can put money back in your pocket sooner rather than just if you sell.
Find the RIGHT Property Manager
A property manager is usually a licensed real estate agent that is a professional in their field and their job is to keep things in order for you and your tenant. They can manage your tenants and get the best possible rental return from your property. The property manager will also help you find the right tenant, conduct reference checks and make sure the tenants pay their rent on time. The good news is that the cost you pay for your property consultant is usually a percentage of the rent paid, is deducted from the rent and is tax deductible.
If you’d like to get some individual advice, please feel free to contact your trusted property management specialist at Carter Property Enterprises.