Top tips for buying an investment property

Top tips for buying an investment property

Do the math.

When buying an investment property take all the costs associated with it into account, this may mean talking to your accountant to work out the tax implications. You need to look at the mortgage, body corporate fees, agency fees, water, council fees and all the associated cost in buying your property. Once you have worked out your on-going costs you need to look at the local market and see if the rental income you can expect will cover what is needed.

Understand the local area.

If you are buying a property know the area, you are buying in. You want to choose a place that has steady growth and also where the rental potential is high. Having a vacant investment property can put a lot of stress on your resources if you rely on the rental income to pay the mortgage. Choose an area that is in high demand, or one that you foresee will be becoming a popular suburb because of planned building or changes in infrastructure.

Find a good property manager and let them do the work.

A licensed property manager will help you manage your investment, it is in yours and their interests for them to never have it vacant. They will ensure that all tenants are properly vetted and keeping up with their rental payments. A good property manager will be able to advise on the best time to raise rental prices. Their fee is tax deductable and they can take the headache out of managing your property, especially if it is not in close proximity to you.

Chose the best mortgage for you.

A financial advisor will be able to assist you with this, but you will have the option of fixed and variable rates, whilst fixed rates give you the chance to budget without any guess work involved, variable rates are known for being cheaper over the long-term of the loan. Interest only mortgages are ideal for investment properties as it will be a more tax effective.

Check the age and condition of a property.

When buying an older property, the first few months where you are renovating can make a dent in your income. It is definitely advisable to work out the costs upfront to make sure you can budget in advance and not overstretch yourself.

Engage a Quantity Surveyor.

When you need a more in depth look into the construction costs and contracts within your project and the construction industry, you are going to need the help of a professional quantity surveyor. SC Tax Depreciations Gold Coast have an expertly trained team that can provide you with an accurate analysis of any current industry trends while making sure that your project falls in line.

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