Whether you’re looking to get a foot on the property ladder or you’re looking to expand your portfolio, property is always an excellent investment opportunity that promises good returns. If you’re considering investing in property, then the goal is to generate the highest return possible and minimise risk.
Get to Know The Market
Buying an investment property is different from buying a home to live in, in many ways. Your investment property is simply a way to profit from your investment, whereas when you’re looking to buy your home, you are looking for somewhere that suits your lifestyle. With an investment property, it’s all about the numbers so purchasing a property outside your own location can make sense. Also, prices in some locations are astronomical, and properties can sit on the market for a long time before they are sold. There are other locations that appear to be a great value, yet the rental demand is low so you are likely to experience inconsistent cash-flow. It’s also a good idea to look at how the market is likely to change in the next few years. While nobody can predict the market with 100% certainty, understand the likely outcome is important. For some locations, prices are expected to stay fairly steady over the next few years while others may be ready to boom.
Choose the Right Property
There are huge differences in prices, demand and returns for apartments and houses. In fact, the differences can be so vast that they are almost entirely different markets altogether! Look at the supply and demand of both apartments and houses in your chosen area, as well as the prices, potential growth and rental returns. As we’ve already mentioned, when looking to invest in property you should always look ahead at the property market to see how likely property prices in your chosen area are likely to perform. The type of property will play a huge part in its performance. What size is the most suitable? Is dual-occupancy an option that will yield higher rental returns? The property you choose to invest in should be a match to your goals, both short-term and long-term. The cost to hold the property must be achievable for you and your circumstances while the likely growth makes the investment worthwhile long-term.
Speak to the Experts
If you are new to investing in property, it’s worthwhile seeking expert advice. Experts have a much better insight into their area of expertise. Speak to your accountant to understand your Tax implications and why it’s often better to build a new property than invest in something that’s already established. Speak to your lawyer to structure your investment strategy to minimise your risk. Speak to your mortgage broker to find out your borrowing capacity and the best investment loans to suit your needs. Also, speak to a property expert such as iBuildNew who can calculate what it will cost to hold a particular property over the long term and at what point the property will give you positive cash-flow.
Make Sure Your Property is Structurally Sound
Property Inspections by professionals give you peace of mind. Both existing properties and new builds can be inspected at the appropriate times. When building an investment property at various stages you can seek the advice of a property inspection. This can also be helpful if you are interstate and cannot attend a builders inspection yourself.
Prepare for the Worst
It can be easy to get overly optimistic when it comes to investing in property. Consider what it might mean to you financially if the property remains empty for a while as you find someone to rent it. Also, consider what might happen if you experience higher interest rates. Create yourself a plan to deal with these scenarios and give yourself some breathing space to minimise your risk.
What Next?
Need help getting started? iBuyNew will point you in the right direction! Whether you are looking for apartments, townhouses or house and land packages, working closely with an iBuyNew property consultant, who understands the market, will help you find something suitable that’s tailored to your needs and requirements. Get in touch with them on 1300 123 463.
Zoe Langenberg
Zoe is passionate about coffee and interior design. You can find her most weekends exploring an art gallery or devouring a good book.
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