Thinking of purchasing your first investment property, but not sure where to start? You’ve most likely worked extremely hard to put away some savings and to get yourself in this financial position for wealth creation. Well done!
Considering you’ve worked so hard to get here we want you to hit the ground running. In this article we’ve shared our Top 5 Tips For Getting Started in Property Investment.
Identify Your Budget
So you’ve saved up a decent little nest-egg and are ready to put it to good use. Before rushing into anything you must have a thorough understanding of your cash flow. If you don’t have enough savings or equity to buy a house, you can immediately refine your investment search to units or apartments. It’s also a good idea to get a pre-approval of your investment loan so you know just how much you’re able to borrow before you start looking for properties.
Your budget will also restrict what locations you can afford. This is where international investment properties can be far more affordable and offer you the edge when entering the property market. Consider Australia as just another suburb of the world. Be sure to look at all options available to you as some of the best opportunities are too often overlooked.
Chat to one of our Property Experts today about our international property opportunities that offer:
- Low Entry Deposit
- No Capital Gains Tax
- No Mortgage Fees
- No Stamp Duty
- No Loan Required
Buy in a growth area
Once you’ve determined your budget, you can narrow down your search to locations which meet your investment objectives. These are generally properties that will have the greatest potential for capital growth, rental return and a high demand from tenants. Properties with good access to public transport, a wide range of public amenities like shops, schools and leisure facilities, and access to employment opportunities are most attractive to renters.
Consider Ongoing Costs
Owning a property comes with many expenses. If the rental income is greater than the mortgage, many investors just assume the property will provide positive cash flow, but that’s not necessarily the case. Things like rates, insurances and general repairs can catch investors off guard if you don’t plan for such ongoing costs.
To help prepare yourself, here is a list of fees to keep in mind that may be applicable to your property.
- Landlords insurance
- Council Rates
- Strata Fees (Body Corporate)
- Rental Management
- Water Rates
Think Carefully Before Negative Gearing
Negative gearing simply means that your costs (repayments, fees and related repair and maintenance expenses) are more than the income you receive from the property. Property sprukers will tell you a negative return (or loss) may help take you down to a lower tax bracket, reducing the overall tax rate and the amount of tax you pay. This is essentially losing money to save money on tax. Don’t fall for these tactics.
Make Decisions With Your Head Not Your Heart
Never follow your heart when it comes to property investment. Property investing is not necessarily easy money and can be quite hard to turn a profit. That’s why you cannot afford to make decisions just because you love the feel of the space. Ensure you have weighed up all the pros and cons and decisions are based on thorough analytical research with sound professional advice.
Avoid picturing yourself living in the property and instead envision your tenant and what their appeals are likely to be. Putting yourself in your tenant’s shoes will give you a much better chance of becoming a successful property investor.
If you have any questions please do not hesitate to contact us here!
Legal Disclaimer: Any advice given is general in nature and has not taken into account your personal objectives, financial situation or needs. Because of this, before acting on any advice, you should consult a financial planner to consider how appropriate the advice is to your objectives, financial situation and needs.