Buy an investment property
Australians love to invest in property because it's tangible - you can drive past and look at it whenever you like. But what makes a great investment property?
Australians love to invest in property because it's tangible - you can drive past and look at it whenever you like. But what makes a great investment property?
Investing in property has grown in popularity over the past few decades. The growth in property markets and demand for rental properties growing in many cities, particularly Canberra has spurred this growth. There are many reasons why buying an investment property could be a strategy to hep your build wealth.
Well at least the basics are – buy a property, rent it out, watch your wealth grow – simple! Simplistically this is right, and many have successfully invested in property by doing it themselves. However there are tips and traps that are essential to be aware of, before jumping in and purchasing a property. Milestone Lending has a straightforward, step by step process to ensure the best chance of success.
It’s not just you paying off the home loan. Tax Deductions and concessions actually help to reduce the time it takes to repay your loan. Often the taxation benefits provide 40% or more of the ongoing contribution towards the investment of holding a property. On many properties, there are additional taxation benefits available from Depreciation Allowances. This provides additional tax benefits, further assisting with cash flow. Tenants pay rent which helps significantly with cash flow and repaying the loan.
Getting the right finance in place is essential to ensuring the best possible outcome from the investment.
Properties are harder to buy and sell. While this may sound like a disadvantage, it can also be beneficial, as there is less chance of selling based on emotion. Often investors don’t stick with a share investment long enough to reap the returns, as they are tempted to jump in and out with market movements. This is not usually the case with property investments.
There are a few steps involved in buying an investment property. Our checklist and contact us for an appointment to see if you could benefit from investing in property.
It is now possible to purchase an investment property in a superannuation fund with borrowings.
There are a number of risks involved with investing in property. Some are more easily managed than others, which is why obtaining good advice is so important. Read more about the mistakes to avoid when buying a property.
Like to learn more? We hold Property Workshops regularly which are a great opportunity to expand your knowledge and confidence. Contact us to find out more.
If you have built up equity in your own home, through repaying your mortgage early, or due to the increase in value of your property over time, you may be able to use your home equity to invest. This investment might be an investment property, or perhaps you would like to invest in shares or managed funds.
In conjunction with your Milestone financial planner, we can help with a strategy to realise your investment dreams. Typically we can use the equity in your current home as the deposit on an investment property or investment portfolio. This is what we term the ‘80/20 rule’, 20% via your equity and 80% secured by the investment.
However, it’s really important to choose the right lender and product, as the strategy you use will give you greater flexibility when it comes to managing your finances.
What makes a great investment property?
Buying an investment property is very different to buying a home. You should view an investment property like any other investment—based on its merits to generate a return and some long term capital gain. Before you take the plunge, think about whether the property you have chosen meets these criteria.
Contact Milestone Lending today and let us help you buy an investment property.
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