5 essential tips for stress-free property investing
Mon Sep 05 00:00:00 AEST 2016
Buying an investment property is a big decision that shouldn’t be made lightly. Whether it’s your first investment property or your fifth, there are important things to consider before diving in. Here are 5 essential tips to consider when on the hunt for a new investment property.
1. Investigate your options
An investment property isn’t something to rush into. Take your time and consider all of your options carefully. Put some time aside to investigate the area you’re considering buying in, surrounding property values, recent sales and the growth outlook for that area.
Once you’ve made a decision about a property, make sure you consider any related costs such as council and water rates. If you’re buying an apartment there will also be a strata levy (also known as owners corporation or body corporate fees). These costs will be ongoing.
2. Get professional loan advice
Options and application criteria for investment property loans can differ to those of regular home loans. You might be able to make interest-only repayments for some of the loan term and have the rental value of the property taken into account for the potential to borrow more.
As the owner it will be your responsibility to attend to any upgrades and repairs that the property will need. Although the property might be in good condition when you purchase it, over time it will need a bit of attention. Make sure you budget for these repairs – they can be sudden and expensive. It’s always a good idea to arrange a pre-purchase property inspection. That way, you know about any existing issues up-front.
4. Find a quality property manager
Managing your property can be time consuming. Many people decide that it’s worth the cost to appoint a property manager. Your property manager will help you market the property, reference check prospective tenants and can even offer professional advice about rental areas and opportunities in that location before you make your purchase.
5. Test the property out on yourself
Even if you’re not planning on moving into the property, it’s good to consider yourself living in the apartment as a measure for what potential tenants might be looking for. If the property has poor, outdated fixtures or is located in a less-than-desirable area, this will affect its rental value as well as how long tenants choose to stay.
Get the right advice
A Choice Home Loans mortgage broker can help with any questions about buying an investment property. It’s a big decision to make but it doesn’t need to be made alone.
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