WEALTH HUB JOURNAL

Investing In Property: Tips To Follow

For decades, investing in property has consistently been one of the best ways to invest money in Australia. All the more reason to seek advice on becoming a better property investor. Helping you become a better investor is why we are here, so we’ve created a list of tips that can help you make more educated investment decisions.

Set a Budget Within Your Capacity

This is as important as setting your financial goal. You must do this before looking for properties to invest in. Success in property investment requires goal setting; you need to determine where you wish to end up and devise a coherent strategy to get there. You must know from the outset what your aim is regarding income. Is it going to be a long-term capital growth or short-term yield? In a nutshell, you should prioritise all your financial goals before jumping into anything.

Assess your Credit Report

For every mobile phone plan, utility account, and credit card, there is probably a credit reporting agency somewhere monitoring your credit report. Before any credit provider grants you an investment loan, they’ll inquire about your credit report from the credit reporting agencies. So before inspecting properties, go over your credit history and make sure you aren’t in default because this will hinder your ability to acquire investment loans. Likewise, check your savings and/or equity to determine your loan access capacity.

Do Deep Research Before You Invest

Do deep research before investing. The property should be desirable to potential tenants, but it must also be in the right location. So you have to learn how to do research on neighbourhoods/areas and learn what properties are selling fast in that area; does the neighbourhood have growth potential? Are there any proposed developments nearby that can later affect the price positively? Learn how to identify good properties that have potential capital growth rather than focusing on rental yields.

Get a Property Manager

An investor can’t take care of every aspect of managing an investment property, hence, the need for a property manager. You should note that hiring a manager will come at an average cost of 8% of your total income every week, but it’ll be worth it because the manager will be the one who: advertises the property, screens potential tenants, carries out routine inspections on the property, etc. Local Agent Finder is a good place to locate property managers across Australia.

Account for Miscellaneous Spending

You should have an idea of how much repairs and maintenance are likely to cost on the property before you put your lease price out. Though insurance will cover all major accident damage, you as an investor should still factor in minor repairs and maintenance, like a leaky roof, broken tap, etc. Tax deductions on the expenses made on the property — like advertising costs, council rate, land tax, borrowing expenses, etc. — should be factored in as well. Not accounting for miscellaneous expenses has ruined many investors.

Whether it is your first time investing in a property or you’ve been doing it for a while, these tips can guide you in making educated property investment decisions that will help you achieve your set goals.

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