At REMAX Hills Lifestyle we believe that getting the right property investment advice is crucial. Here are some steps you can review before making your decision.
1. Check your borrowing capacity
Before investing in property it’s vital to have a thorough understanding of your cash flow. Also, ask your bank for a pre-approval of your investment loan, so you know how much you’re able to borrow before you start hunting for properties.
2. Budget extra for ongoing maintenance costs
Make sure you budget enough for rates, insurance and general repairs. Ensure you are well prepared to prevent costly maintenance issues arising.
3. Buy in a growth area
Try to choose an investment property in an area where there is strong demand for rental accommodation. Buying a property close to transport, universities and schools could potentially generate a higher rental return as these locations tend to have a stronger demand for rental accommodation.
4. Define your investment goals
Are you looking for fast capital growth or wanting to hold the property long-term? During boom periods, it’s much easier to renovate properties and turn them over for a quick profit. In slower economic times, it may take many years to achieve the same growth. Be sure you comfortable with the decision you are making.
5. Build sweat equity
Paying tradesmen to renovate your investment property is costly. If you are prepared to get your hands dirty you can save money and increase your profit margin.
6. Look for a clean and functional property
7. Think carefully before negative gearing
If your repayments on the investment loan won’t be fully covered by the rent, your property will be negatively geared. While this can have tax advantages, it can also lead to financial stress if you do not have enough cash flow to cover the loan repayments, rates or strata fees. Remember to consider your budget carefully before buying.
8. Contact a REMAX Agent for more information.
At REMAX Hill Lifestyle we welcome all questions property related. We understand there are a lot of factors to consider when purchasing a property and are happy to help.