PROPERTY INVESTMENT CHECKLIST...

PROPERTY INVESTMENT

Property is one of the best investments you can make, if you know what you are doing. With the market as it is right now, it’s a great time to buy an investment property and secure a house, townhouse or unit while prices are low.

We are seeing a lot of longer days on market and vendors are even dropping prices to try to get the home sold quickly. If you're a property investor, this is the perfect time to buy, as there is also a lot of choice of homes listed for sale. 

A lot of potential investors sit around and wait for the market to be right for their terms, however if you wait too long, the market can change and you might miss out on some really good investments while you wait. Don’t wait for the market to change, if you are ready to buy an investment property - you are ready!

NEGATIVE GEARING

People have been asking me how the upcoming election is going to affect the property industry. If Labour gets in and abolishes negative gearing, a lot of property investors who use this strategy may end up having to sell their investments, as they won't be able to claim the loss on their tax anymore and they will loose a lot of money if they continue to hold onto a negatively geared property. If this happens, and investors put their properties up for sale, it will continue to be a buyer's market and you will be able to pick and choose from all the cheap properties listed for sale.

POSITIVELY GEARED PROPERTIES

If you purchase a property which needs a quick cosmetic renovation, you can actually benefit from the slump in the market. By purchasing a cheap property, renovating it, getting it re-valued and holding onto it and renting it out to pay off the mortgage, you will create a positively geared property that pays for itself.

If you have a property that is positively geared, when property prices rise again, you can sell the property and have a tidy profit in your back pocket.​

property investment checklist

How do you know if you’re in a financial position to invest in property?
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To begin your investment property journey, you need to do a number of things:

• You need to first work out how much debt you currently have. How much you will need to borrow? And how much you can budget for your new investment property once you've bought it?
• As a guide, you should have around 20% of the property value ready as a deposit, (so you don't have to pay Lenders Mortgage Insurance) plus at least 5% for stamp duty and legal costs, as well as a bit extra on top, for any repairs that you'll need to do before renting the property to tenants.
• Property investment entails some serious research time and a solid financial commitment, so you must be completely thorough in your research and even more so in your investment preparation.
• You need to treat a property investment like a business. Buying a home is one thing, but investment properties needs to be bought like you would buy a business. You want to make a profit on your investment, so it should be treated differently than a primary place of residence.
• Make sure you have a quality team around you for advice. This should include a mortgage broker, a financial planner, a real estate agent, an accountant and a builder.
• Always be prepared for the unexpected. Have extra cash saved in your bank account for all the little things that pop up when you have an investment property. Dishwashers could break down and need replacing if the house has been advertised with one. There could be wear and tear over the years that needs repairing. Interest rates could go up. Termites could get into the property if you don't have an active barrier in place. All sorts of things could happen and if you don't have the cash to pay for things, you could find yourself in trouble.​

​Download my property investment checklist to make sure you are prepared when it comes time to buy an investment property. If you have any questions regarding property investment, please comment below or give me a call on 0414 520 853.
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