Detailed information you need to Invest in Property
Buying just any property to rent out can be a hit and miss affair. You need to be well informed and have a targeted approach to what you want to buy.
You need to research all the variables thoroughly.
Most people who buy an investment property buy within 7kms of where they live. That is not a high recommendation because obviously they all can’t be right about the best place to invest. It’s not just a matter of investing where you are familiar with but where your dollars will get the best return.
When a property comes onto the market to sell sometimes it will be the next door neighbour who buys. So why doesn’t the rest of Australia know that this is the best investment?!
The fact is that most people buy where they feel most comfortable or in the areas they know best but this can be very limiting. To the next level you need to look outside of this narrow constraint.
What should you buy?
- Established home on a large block
- Any home with a good rent return
- City apartment for international students
- Quality home within 10km of the CBD
- Outer suburb allotment with potential for future subdivision
- Inner suburb allotment with potential to knock down and rebuild
There are so many variables; so where is the right and wrong in all of this?
If you want to see a general summary to investments have a look at;
To determine what investment is best for you it is important to know what your goals are.
These goals will determine the type of property you should to buy as characterised by the 4 categories below;
1. Quality new or near new home with higher purchase price, capital growth and positive or near positive rent return
2. Older home with lower purchase price, capital growth and negative rent return.
3. Older home with low purchase price, some capital growth and highly negative rent return but some possibility of improving the property to increase rent and tax depreciation claim.
4. Old home with higher purchase price on a large block with highly negative rent return but potential for subdivision and future development.
Of all these 4 categories only number 1: Will give an immediate low cost, neutral or slightly positive rent return. All of the others will cost the owner money each year.
In this exercise we wish to explore the full potential of buying a new or as new property.
The benefit of this type of property is;
• Being in such good condition there will only be a very small amount of maintenance and most of that would be paid for under the builders warranty or product warranty of the fixtures or fittings that might fail
• An owner’s tax will be minimised by a claim for depreciation of the buildings and improvements because it is so new.
• Any property in this condition will be highly sort after and so attract the best tenant profile.
• Once set up a tenancy here should be almost, ‘Set and forget’, with little or no ongoing upkeep and maintenance for the first few years.
This is the ultimate no fuss investment property for those who want the minimum of problems with the maximum profit. True, it will cost more upfront but if it has been purchased in a growing suburb or suburb with a projection of future growth then it should also sell for more especially if it is maintained to the same standard.
So if in selecting any one of the 4 types of properties mentioned above as your choice of the most desirable to purchase you should consider all the reasons why and the exact dollar return you will make. There is always a lot more to this process than might first come to mind but it is worth taking the time to research.
For full details we recommend that you attend one of our Property Investment Seminars.
If you are interested then please ring us on (08) 8186 2777 or email us using the form below
(We anticipate that gradually this website will have more details online once updated)