In order to grow your long-term wealth, Buying an investment property is an excellent option. It can also offer some tax benefits. But as with any investment, buying real estate comes with its fair share of risk. Here are some useful tips for setting yourself up for property investment success.
1. DECIDE YOUR BUDGET
Know how much you can afford to borrow before starting your property search. Besides fortnightly or monthly mortgage repayments, consider upfront costs including stamp duty, legal costs, and immediate property improvements. Also consider any ongoing expenses such as property maintenance, rates, utilities, property management, and insurance.
2. SET YOUR GOALS
Get a clear understanding of your financial goals before you commit to buying a new property. Are you looking to secure an income to support you during retirement? Or do you want to fund your children’s education? Or to offset tax? Whatever it is, create a plan to achieve it and regularly review your situation compared with the current market.
3. DO A BIT OF RESEARCH
Good research is the key to a smart investment. Find out what types of properties are in demand in the area you’re looking for. Research the rental demand and trends in the area by talking to property managers or buyer’s advocates or by searching real estate sites. And find out whether new developments or infrastructure are planned for the area.
Location matters the most when it comes to real estate. Look for properties close to public transport, schools, shops, cafes, gyms, hospitals, and other amenities. Not only will these improve the property’s rental appeal, but they’ll also make it more likely to experience strong long-term growth.
5. GET A BUILDING INSPECTION
If you’re buying an older property, it’s advisable to get a building and pest inspection before you sign the contract. The last thing you want is to discover that your new property is termite-ridden or in need of expensive structural repairs a few months down the track, leaving you thousands out of pocket.
6. FRESHEN IT UP
A 1 coat of paint and new flooring in neutral tones can transform the look. Old properties often don’t come equipped with air-conditioning and energy-efficient heating so these can be good valued-adds, too. Make sure the property is looking impeccable by doing a deep clean, fixing anything that needs repairing, and tidying up the garden. These updates will attract better tenants and higher rents.
8. CHOOSE THE RIGHT LOAN
There are hundreds of home loans to choose from, and it’s vital that you find the best loan for your needs and situation. Enlisting the support of a qualified mortgage broker like The Lending Partner can take the stress and guesswork out of getting a home loan.