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What To Consider When Investing In a Property Investing in property is a way much safer financial decision than getting involved in the stock market. But although it is considered a much better and safer option especially for first time investors, investing in property is not a very easy way to earn money. There are several factors that are involved in this type of investment. Just like any other investment, you need to do a lot of research about the advantages and consequences in property investment. And just like any other investment, you must need to know how to play it. There is a great necessity that you should research on your target property carefully. You must need to understand the pros and cons of a specific property before you make your purchase. Appreciation isn’t always a good sign to make your investment property profitable. You need to go through a thorough local market research and choose a property in an area with the greatest demand. Other than that, you still to examine other aspects of property investment before you even make your financial decision. Property investment isn’t only about residential properties. When you talk about property investment, commercial properties are also considered. Investing in commercial properties can be a good option for a property investor, that’s if it is more favorable than investing in residential properties. Investing in commercial property can be a good option due to several reasons. Lease terms on average are much longer on commercial property as compared to residential property. Also, rent on the lease is usually reviewed yearly and will increase the inflation rate by 4 per cent, whichever is greater. The management and maintenance of the rental commercial property usually can be included in the lease terms and puts the maintenance responsibility on the tenant. The investor can save money from managing the Investing on residential properties property and that means more income and less expenditure.can also be beneficial in a way that the initial deposit outlay is usually smaller than that of a commercial property. Some lenders even allow an investor to borrow for as much as 100 percent of the purchase price. Also, the borrowing criteria for residential property are less strict when compared to commercial. At the same time servicing loan repayments on a residential property is easier to manage because the interest rates are generally set at a lower rate. Here are some of the more specific reasons why investing in property can be ideal for investors. 1. Gain in capital growth – investing in property can be a potential source of capital growth because the value of property increases over time. 2.

Rental income and rental yield – annual rental income less any costs divided by the purchase of the property.

3. Tax advantages with negative gearing – you can deduct the costs of owning your investment property through negative gearing, thus, reduce your tax. Property Type There is quite of property types to choose from. From the beginning, you should determine which type of property can give you the benefits you want. Apartments, new properties, old properties, urban units, holiday homes etc. can provide different types of rental returns and growth. Rental Return As an investor, you should thoroughly consider the rental return and potential capital gain of your investment property. Other property investors prefer a particular area and property which promises high long term growth but lower rental returns. Others prefer a property and area that offers stronger cash flow but lower capital gain. So as an investor, you should first look at you financial and investment position and examine your investment goals to efficiently identify which type of arrangement will benefit you more and fit your needs.

National Solutions Group: Investing In Real Property - Head Office 5 Capital Place, Birtinya QLD 4575

T (07)

5438 8005, http://www.nsg.org.au/


Location Location is one of the most important factors to consider when investing in a property. The location of the property will determine how the property will work for you. The area where the property is located will establish the success of the investment. As a common rule, it is an edge to gain potential renters if the property is located near public transportations, local amenities, business centers, schools and universities, and other public facilities that may deliver convenience and ease to residents. As an additional tip, it is always good to look at properties that are near your own home. This will offer a more efficient hands-on approach to your investment property. Time frame It is also necessary that you have set time frame on how long you can hold the property. You have to examine your investment goals and you current financial position because they can help determine and influence the length of your investment term. Keep in mind that property investment is a long term investment. It is about the duration of your ability to hold the investment and not the economic cycles that will determine your gains and your long term wealth. Selling your property sooner may not be able to get you back all your fixed costs. The Risks It is undeniable that everyone who gets into investments has these fears of racking debts and the fear of loses if something goes wrong. Things can go wrong, yes, that’s a fact. Especially for first time investors, it is greatly advised that you have to do a lot of research and make a lot of analysis. The affordability of the property and the economic cycles which come and go can affect the growth of your investment. Others It is best to by a property that suits your strategy. It is very important that you understand all the expenses including stamp duty, strata levies, council and water rates, real estate commission etc. also, you might want to consider getting a landlord home and contents insurance to cover you if something happens unexpectedly. It is also advised that you give your tenants a suitable length of lease within a contract. Make sure that you can cover all the repayments if ever the property is not rented over a period of time. When borrowing, choose a loan that suits your financial capability and prefer an interest only option as this will help lower repayments and increase your on-going income flow.

National Solutions Group: Investing In Real Property - Head Office 5 Capital Place, Birtinya QLD 4575

T (07)

5438 8005, http://www.nsg.org.au/

What To Consider When Investing In a Property  

Investing in property is a way much safer financial decision than getting involved in the stock market. But although it is considered a much...

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