Selling Houses Australia

Things To Consider When Buying An Investment Property

Property is one of the biggest financial investments you’ll ever make but the criteria for choosing an investment property are quite different from those for choosing a home.

A home is an emotional purchase whereas an investment property is a commercial enterprise, so you need to put on your accountant’s hat and do your sums before parting with your hard-earned cash.

- First of all comes the location. In order to be tenant friendly, it needs to have good access to public transport, shops and schools. It also needs to be appropriate for the local demographic.

- Units are a great investment near a university for example. But beware of studios and one bedders less than 40 Square meters, as banks won’t generally lend more than 80% on a property this small.

- Look at statistics on realestate.com.au to find out information about property prices and rental returns in the area. A good rule of thumb is if you buy a property for $450K, you should be able to rent it out for $450 a week.

- Don’t forget to factor in costs for repairs, letting fees, landlords insurance… and those times when you may not have a tenant to help cover the mortgage.

- On the bright side any improvements or costs associated with your property can be claimed as a tax deduction; Making investment properties a great way to reduce your annual tax bill.

- Finally, keep your eye on the market; if prices start to shoot up, it may be a great time to sell. But remember, the tax man will want a slice of any profits.

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