Future proof your wealth through property investment
With interest rates hovering around record lows and Queensland’s property market performing fairly well of late, now is a great time to be a property investor.
Done well, property investment can help set you up financially for the future and help you to future proof your wealth.
But while property investment is a sound wealth creation tool, if you haven’t purchased an investment property before, it is a little different to buying an owner occupied property and there are certain things you need to consider, such as:
- What are the capital growth prospects for the area?
- Is there a strong demand for rental properties?
- Does the property need a lot of maintenance and am I willing to take care of that aspect?
If you can answer all of these questions, and are keen the get the investment ball rolling, it is a good idea to follow these tips to ensure your property investment experience is successful:
Is there equity in your home?
With the recent housing boom seeing increases in property prices, you may find you have a significant amount of equity in your home that you can tap into to purchase an investment property.
Positive vs negative gearing
If you have been reading the news, you may have seen there is a real debate surrounding the future of negative gearing. While there are certainly benefits associated with both positive and negative gearing, it is important to consult a professional such as myself to ensure you are opting for the right investment strategy for your needs before you make any final decisions.
Picking a suitable loan
There are a number of different types of loans available to residential property investors, and the most suitable loan will depend on your investment strategy. I can work with you to help you identify which loan type may be most suited to you and your future financial needs.
Interest only or principal and interest
When deciding on what loan type to take out for your investment property, think carefully about interest only vs. principal and interest options. Although interest only loans will not reduce the loan amount, they will result in less monthly repayments and allow you to make greater contributions to your principal place of residence, allowing the investment property to grow in value through capital gains.
Implement a long-term strategy
As with all investment strategies, a long-term approach should be taken when purchasing an investment property. While property prices are currently booming at the moment, the fact is that property should always offer you a good return. As such, depending on market conditions and personal circumstances, you should look to hold onto your property for 7-10 years.
For further information, and to put yourself in the best position with valuable information and guidance, contact a trusted consultant from Mortgage Choice on 07 3286 7711.