Tips for property investors. If you are considering purchasing an investment property here are 6 tips to review before proceeding.
Tip No. 1
Buy an investment grade property. This means buy a property that is worthy of an investment not a luxurious home that you’d only live in. Buy with your head, not with your heart. Buying a property close to public transport, schools and lifestyle amenities will make it more attractive to renters and from a resale perspective. Look for liveability not luxury. Location is everything, but the home itself doesn’t need the highest graded fixture and fittings. You can easily over capitalise and make no profit on your investment if you do so.
Tip No. 2
Understand your budget. When buying an investment property, you should ensure you have a clear understanding on your budget and borrowing capacity. Also consider the property expenses and outgoings. Having the funds to complete the purchase is one thing, but you also need to be aware that you can afford the ongoing costs. Negative gearing helps with tax offsets but ensure you balance it with cash flow out.
Tip No. 3
Traditional property investment has stood the test of time. A buy and hold strategy (buy for the long term) will allow you to witness the unrealised capitals gains in the property. Don’t invest property with a short term outlook. You may want to crystalise short term gains from certain investment assets, but real estate is also best performed over the longer term.
Tip No. 4
Obtain the right loan product and to ensure you maximise your lending. You want to not only get the best interest rate, you may want a few features to offer you flexibility in the future such as a re-draw facility or an offset account.
Tip No. 5
Obtain good insurance. This may be the most expensive investment asset you own. As a result, you want a contingency plan should something happen to it. Establishing insurance is one of the best solutions to protect your asset. There are lots of different policies to consider, including building insurance and landlord cover to name a couple.
Tip No. 6
Employ a good property manager. A property manager essentially manages your investment property. There service consists of sourcing a tenant, regularly inspect the property, manage maintenance issues and collect rent to name a few. Given the time needed to complete these tasks and the strict laws in place, having a Property Manager a really important adviser. and resource.
What to do next?
At Crest Property Investments we specialise in sourcing brand new and off the plan properties for buyers. If you’d like to learn more about property investment, such as tips for property investors, please feel free to look us up on our website. You can also contact us directly at your convenience.
Our YouTube channel and Market Insights also provide a wealth of information to assist you with many areas relating to property.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
June 2024
