Successful investing calls for one key ingredient –planning.
A rental property is a substantial financial commitment and the best results come to landlords who take the time to get good advice and plan carefully before they act.
Long before you start checking out ‘Open Home’ inspections, it’s worth considering several important factors:
Your current financial position
- How well placed are you to afford an investment property particularly during the inevitable periods of vacancy?
- Can you afford a quality property that will attract decent tenants and deliver healthy long term price appreciation?
Where are you heading?
- Are you prepared, and can afford, to hold onto your investment for the long term?
- Will you need access to your capital (money invested) at some point in the near future?
How much money will you need?
- As with your home, the purchase of an investment property can involve significant upfront costs and ongoing maintenance expenses.
- For a detailed rundown of likely costs associated with your rental property please contact me for a free investment guide
How much can you afford to borrow?
- Getting an indicative idea of your borrowing capacity is a useful starting point in knowing the type of property and location you can afford to buy
Do you need a cash deposit?
- If you own your home did you know you may be able to use home equity in lieu of a cash deposit?
Key criteria - affordability and tenant appeal
- Your investment property will ideally meet two key criteria – being affordable for you, and holding appeal to a broad spectrum of tenants.
It is likely that in the first few years of being a landlord your property will be negatively geared Put simply this means it costs more to own the property than it earns in rental income. While this can offer tax savings you still need to be confident that your household budget can cope with the outflow of expenses particularly the loan repayments.
For a free comprehensive investment guide please contact me today on 0414 259 699