Before purchasing an investment property, it is best to invest some time into researching and planning for it to be a success. Here are some property investment tips to help you!
Do your research and due diligence
Researching the property market, the suburbs and the types of property really will help to clarify your options and pinpoint what is the best decision for you. Its always best to try and buy in a growth area and where there is a strong demand for rental accommodation. This not only helps to ensure that your house will be occupied but also if there is rental demand you may have a selection of eligible candidates to choose from.
Set a budget
Lenders will usually require a minimum deposit of 10% to 20%, however it’s important to remember the added costs such as stamp duty, legal and conveyancing fees, insurances, building and inspection report, repayments, and the interest on borrowings. To calculate some of the buying costs try this calculator.
Don’t underestimate ongoing costs
Some of the things to worry about are construction, maintenance, material, and loss of rental revenue. It may be wise to think about rental insurance.
Owning a property in any manner still requires more than just the loan repayments to be made. We have touched on some costs that may be encountered, but some others to be mindful of are:
- council rates
- water rates
- strata fees
- repairs and maintenance
- property management fees
- estimated vacancy costs, including lost rent and advertising
- insurance, such as landlords’ insurance
- other charges, such as land tax.
Decide if you need property management
You may want to appoint a property manager or real estate agent if you are time poor or you live a some distance from your investment property. Bear in mind that this would incur property management costs.
If your looking to invest in property or your looking to buy or sell a home, Our property law team have successfully helped countless people with property law matters, call 03 5941 1622 for more information.