Choosing to increase your income with investment property is a good idea. In fact, many Aussies decide to secure their financial status by buying a propriety and then reap off the benefits.
Having another property will also get you tax deductions, and you could ensure a better life without worrying about the costs that could come with it.
Now, let’s see the steps that you should take towards investment property.
- Picking the Perfect Property: Buying an investment property has to be done after prospecting the market. Instead of hurrying, take some time to discover the area, the value of the properties in that location and so on. Buy smart, not fast.
- Choose a Long-Term Loan: Think about the fact that it will take some time until you’ll see the financial benefits. Don’t apply for a short-term mortgage that could become a stressful factor and put you under a lot of pressure. Opt for a medium to long term investment instead.
- Hire a Good Property Manager: If you’re new to this domain, ask for advice. Find a property manager that you can trust and let him/her get you acquainted with your new landlord responsibilities, as well as your rights.
- Get to Know the Market: When facing an investment property, don’t think only about the present. You should also consider what could change in the future. New stores, houses, facilities in the area where you’re buying could increase the value of your property.
- Find the Right Mortgage for You: Again, it’s best to appeal to professionals when you’re not familiar with something. Finding the right mortgage for you while considering the costs, taxes, and fees can be stressful. Although an investment property can have its interest pass as being tax deductible, you should still let a financial advisor help you choose a fixed or variable rate.
- Make Use of Equity: If you’re not eligible for the loan you need, you can use the equity in your house as collateral. Borrowing a higher amount of money is possible if you have something that could compensate. Calculate the difference between the value of your property and your mortgage and see how much cash you can receive.
- Appeal to a Building Inspector: Always check the investment property with a building inspector. Until you’re not fully aware of the positive and negative aspects of your future purchase, you won’t realise if it’s a good or bad investment.
- Make Only the Necessary Improvements: Exciting as it may be to switch things up and paint the walls blue or red, keep in mind that going for a neutral palette is best. Take into consideration that your future tenants might not approve of your bold changes.
At the end of this investment property guide, don’t forget to think about the stability of your finances. Keep in mind that you can’t sell a house by pieces, so without a solid plan, things might just go crumbling down.