Suppose you have spotted a property that suits your investment strategy or thinking about diversifying your property portfolio. In that case, this guide gives you a better understanding of what is involved and the factors that you need to consider obtaining a successful ROI (return on investment).
Before Deciding To Invest In Property
Investment property can be a low-risk and proven way to build your wealth. However, it carries a certain level of risk. Before making a property purchase, we always advise our clients to prudently evaluate the risks and benefits to decide whether it will be a practical investment.
By consulting our investment property experts and educating yourself by enrolling in our free mini courses, you can easily do a self-assessment to ascertain how much risk you can take and look clearly at the opportunities, so you know what lies ahead
Here are key considerations before buying an investment property
After speaking with our investment property specialist, you will need to form an idea of how you will profit from the investment.
The most common property investment strategies are:
- Capital Growth
- Rental Income Stream
- Depreciation of the asset
- Rental Gurantee
- Tax Variation to keep outoging low
2. Locating The Right Property
You will need to make the decision based on the following components:
- Property Type: Unit or Townhouse or may be Freestanding House
- Established Dwellings or New Buildings
- Choice of Suburb
** Rental Return And Capital Growth **
Another critical element is assessing potential capital growth and rental income. It would be best to make sure the returns you generate with investment property are comparable to the returns you would have realised had you invested in shares or another asset class.
1. Rental Return
Study the median rental price for comparable properties in the area and consult with one of our property specialists to better understand the maintenance costs, rental growth and other concerning factors.
2. Capital Growth
Capital growth exemplifies the growth in the property’s value over a period. It is one reason why most people buy an investment property—the Australian property market functions in the cycle with periods of growth, including stagnation and decline. And 2021 is the right time to buy your first or maybe next investment property in SA.
Be aware that Capital Gain Tax can apply when disposing off the asset.
** Getting An Investment Property Loan **
Before applying for an investment loan, make sure you do the following:
- Evaluate your borrowing capacity
- Compare mortgages to find competitive interest rates
- Try to get the loan pre-approval, preferably with a credit check.
- Consider where you might like to invest
Let's help you minimise your risks
Savvy property investors take steps to minimise their investment risks and diversify their property portfolio.
We would love to help you make an informed and confident decision. Connect with us today to discuss the best available suburbs to invest in 2021.
Contact Us today for a Free Strategy Session!