Investment property – are you ready?
Get sound advice before you decide
Investing in property can be a wise financial move you can make in Australia today, but you need to do some very careful homework before you take the plunge. The professionals at ITP Home Loans can guide you through the pros and cons of buying an investment property, and negotiate your loan type and rate if you decide to go ahead.
Property for the right price
Capital gain is, of course one of the main reasons for investing in real estate, so getting the right price is crucial. Again, research is key. You should get to know your buying area and its recent property sales intimately, so you’ll be able to spot a bargain when it comes up. You should also investigate upcoming changes to the neighbourhood. For example:
- Major construction nearby could make your property harder to rent
- A planned nearby park may increase the value of your property
Other factors to consider include:
- The benefits and pitfalls of different property investment types – land, apartments and houses
- Prestige areas will yield higher rents, but may well give less capital growth
And of course it goes without saying that your investment property should provide you with a reliable rental income flow!
Cash flow is critical
Property is a medium to long term investment, so make sure you can keep up your loan repayments right into the future. You don’t want to have to sell your property at the wrong time purely for reasons of financial hardship. On the benefits side, your rental income and the tax deductions associated with your investment usually make servicing the loan relatively painless. Plus the fact that rents (and your income) tend to increase over time, making repayments easier as time goes on.
The right investment loan for you
Structuring the right type of mortgage and rate for your investment is of the utmost importance – best left to the professionals at ITP Home Loans. Your loan options include:
- A fixed rate or a variable rate loan
- An interest only loan. These nearly always apply to investment mortgages, for cash flow reasons
- Using equity from another property
- Negative gearing. This path can be very effective if you’re a high income earner
However, one thing is certain – you should never buy investment property purely for tax deduction purposes.
At ITP Home Loans we take your whole life stage and financial situation into account, so we can help you make the right decision stress free. Most importantly, your professional ITP advisor will help you find a balance between buying your property and lifestyle. So email us, or make an appointment to see an advisor face to face. Alternatively, give our helpful ITP Home Loans consultants a call today on 1300 387 487.