Want to own a pile of bricks and mortar that pays dividends both now and in the future? Then it’s time to brush up on these 5 key tips to guarantee a successful investment!
Whether you’re thinking of becoming a landlord, or you’ve already taken the plunge and bought an investment property
, one thing’s for sure: real estate is a proven performer when it comes to wealth creation.
Not all property is created equal, however, which means that some property investments will be more profitable than others.
If you want to make sure you have the best possible chance of success, financer brokers Mortgage Choice offer the following hints and tips:
1. Think long-term
The property market moves in cycles, meaning it has highs, lows and steady patches. “Always ensure you are comfortable with the possible pros and cons of property investing and think hard about how they match your goals,” Mortgage Choice advises. “You will need to budget for interest rate rises and property agent fees as well as the usual ownership costs, and lost rent if you struggle to find or keep a tenant.”
2. Keep up the research
Read property-related and investment articles – both before and after you buy. Talk to people in the know, such as experienced investors and property research companies, about areas you are contemplating buying in. Compare suburbs’ rental yields, resident demographics, tenant demand, existing and planned infrastructure, past price growth and predictions and everything in between. It’s vital that you continue to keep researching the market after you become a landlord, so you’re always up to date about the latest trends and cycles.
3. Tap into your equity
According to Mortgage Choice, “Tapping into another property’s equity can be a strong launching platform”. If your home is valued at $700,000 and your mortgage is $350,000, you may be able to invest up to 95% of your equity ($332,500) to purchase a new property, depending on your borrowing power and serviceability.
4. Choose the right loan
There are dozens of different property loan products available to you, so it’s important that you consider your financial situation and investment strategy. Do you want a tax-deductible, interest only facility, or principal and interest loan? Fixed loan or variable rate, or perhaps a split? Which features do you need? Remember, a professional mortgage broker
can help you compare a range of different home loans so you can narrow down your options.
5. Meet an expert
Many investors shy away from using buyers’ agents, but they can be a very valuable resource. After all, buyers’ agents know the market and can be a great source of advice, and for negotiating with sellers and their agents. Best of all, if you’re buying the property as an investment, their fee may be tax deductible.
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