Thinking of Investing in Property?
Buying a home to live in and investing in property still remains the favourite strategy of wealth creation in Australia. If you are looking to invest in your first rental property, there are many things to consider.
Why Are you Buying An Investment?
Is your strategy to gain capital growth; or a solid rental return? Knowing this may determine where you will look to buy and what property to chose. Choosing a small unit like student housing will generally have a good rental return, but maybe not so great capital gain. Choosing a property with a large land holding may give good capital growth, but if the property is old and in need of work, the rental return along with repairs, may mean you are putting in a large amount of money each month from your own pocket.
Equity or Cash
Do you have equity in an existing property or are you using cash funds to make the purchase? Do you know how to work out your property equity and how it can help you buy an investment property.
What are the up-front costs? How will you be covering these? As an investor you will definitely have stamp duty on top of normal bank and settlement costs meaning you will need to borrow more than the property is currently worth. Do you have cash or equity to cover these?
Can you afford it?
Do you have enough cash flow to meet the monthly repayments should the property be vacant for a period of time? You also need to allow for the cost of holding the property (local government rates, water rates, repairs) as well as management if you are getting a Real Estate Agent to do this for you.
You may be eligible for tax benefits as a result of buying and owning a property. Anything that costs you money to hold your investment is generally able to be a tax deduction. This includes repairs, Real Estate management fees, interest on your loan, council and water rates. Make sure with any investment decision you obtain quality advise from a financial adviser or your tax account. We can help you with all the answers and organise your Pre Approval before you go house hunting.
The Home Loan Comparison Co. compares home loans from a much wider variety of banks than most people have time to consider, and we find the loan that suits your goals.
We are experienced, knowledgeable and dedicated to building ongoing relationships to keep on providing personal and valuable service that is rarely experienced when dealing with the banks.