September 23, 2015
Australians are big fans of investing in residential property. Generations have built their wealth on bricks and mortar, secure in the knowledge that residential real estate can deliver regular, tax-friendly rent returns and long term growth in value.
Breaking Down 'Investment Property'
An investment property is like any other investment: the goal is to generate a profit. In real estate, this is achieved through income (rent, for example) or through a profitable resale. The way in which a property is used has a significant impact on its value. Investors sometimes conduct studies to determine the best - and most profitable - use of a property. This is often referred to as its highest and best use. Certain properties can be developed in more than one way (commercially zoned property, for example) and investors can maximize returns by determining the highest and best use.
Benefits of investing in property
- Regular rental income
Unlike other investments like a term deposit or shares, property has the potential to deliver a return from day one.
- Scarcity plus ongoing demand
By its nature, land is in limited supply and this helps to underpin long term growth in the value of residential real estate.
- Tax Benefits
You are able to claim a tax deduction for a variety of expenses associated with owning a rental property.
- A diverse investment
Australia offers a diverse property market that offers choices between different states and territories; apartments versus houses; and regional or capital city locations.
Maximise your investment returns
With hot competition amongst property investors across Australia, it’s never been more important to carefully think through your investment strategy, do your calculations and ensure you find the investment property loan that will maximise your returns.
Shopping for your investment property...
Use your head not your heart by this stage, you know how much you can afford to spend on a property and you have worked out your investment strategy. Now comes the exciting part – choosing the property that is right for you as a landlord. Buying a rental property calls for quite a different approach to selecting your own home. As an owner-occupier you need to find a home that meets personal requirements such as proximity to work, kids schools or friends and family. As an investor you need to find a property that will suit a broad range of tenants. Of course you have the freedom to buy in any state or territory though buying in a suburb near home gives you the benefit of local knowledge.
The key is to research locations carefully, looking at important factors like;
- Population growth
- Tenant demand
- Local price growth and
- Developments & Infrastructure planned for the area
It is critical to consider the type of property best suited to fulfilling your goals. Think about whether you prefer an existing or new dwelling, and the sort of features that you believe are desirable. First and foremost, make a decision based on fact not emotion - after all, as an investment your property needs to make money for you.
For a free, property report or to find out what that property is really worth talk and expert advice contact Mortgage Choice Bundall today on 07 5504 5569 or visit www.mortgagechoice.com.au/antonymuir