Do you know the rules?
Rule 1: Pay the right price for the property
It sounds obvious but it is something that is often overlooked. It is usually considered one of the most crucial steps in achieving a successful investment.
Ensuring that you pay the right price for property can be achieved by getting a valuation prior to making a purchase. There are now websites which previously were only available to valuers which can help you establish the value of the property prior to purchase.
Rule 2: Transport and Infrastructure
Investing in property in an area that will be subject to future infrastructure improvement can certainly be beneficial in terms of potential returns. There are now many websites which provide information in regards to areas which will be receiving significant future infrastructure investment.
Rule 3: Increase the value of the property
Investing in a property that you can add value to is usually a great option. Sometimes simple renovations can increase the value of the property substantially. For example installing new blinds or carpet can be a cost effective way of adding value to property.
Rule 4: Do your sums
Prior to purchasing property have a good understanding of the financial impact of the property transaction prior to investing. Investors must ensure they have sufficient funds to cover the property’s purchase price, stamp duty etc.
Usually, investing in property is a medium to long term investment, so it is important that you make sure that you are able to afford the mortgage repayments over the course of the loan.
Generally, owning an investment property can be quite inexpensive to keep and to service the loan. This is because you are earning rent and also obtain a tax deduction for majority of the expenses associated with owning the investment. Rent tends to increase over time which may also make servicing a mortgage easier over time.
Rule 5: Do your research
You should read property-related and investment articles before and after you purchase an investment property.
Speak to the relevant experts, such as property research companies, experienced investors about the areas you wish to buy in. Gather information that will help you compare suburbs’:
- Tenant demands;
- Rental yields;
- Residential demographic; and
- Past property value growth.
It is crucial that you continue to do research after becoming a landlord to ensure that you are always up to date on the latest trends and cycles that may affect your investment property.
If you need help in this regard or would like more information on property investment please contact us at The Quinn Group on (02) 9223 9166 or submit an online enquiry.