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One of the most popular ways to invest in Australia is through investment properties.
Whether you’re considering a house or a commercial building, investing in property can be an excellent way to increase your wealth and secure your financial future.
However, property investing is not always a sure thing. Plenty of people lose money instead of profiting because of bad decisions. If you’re investing in a property, you need to know how to manage your investment and avoid suffering losses effectively.
If you make smart, informed choices, your investment property shouldn’t be losing you money – unless this is part of a calculated negative gearing strategy.
If you plan to rent out your investment property, you will be earning rental income and entitled to tax deductions. If you are planning to renovate and resell, you may potentially benefit from capital growth and increase your investment returns.
Here are some essential tips to consider when buying investment properties in Australia:
1. Buy at the Right Time for the Right Price
The key to investing in real estate is buying a property that is likely to increase value. It takes patience, research, and timing to get the perfect deal.
Real estate properties can be tricky to price; that’s why you need to keep an eye out for the properties you’re interested in. If you’re patient and vigilant, there is always a chance to buy the property you want below its actual market value. The research will also teach you how to spot good deals.
Suppose you are not confident in selecting a suitable property. In that case, you can seek out the services of a buyer’s agent who specialises in the property market and will be able to identify opportunities based on your requirements and act on your behalf throughout the purchase process. Your financial adviser should never directly advise you to purchase a specific property.
2. Study Your Numbers
To earn from an investment property, you must have a steady and stable cash flow coming in. You won’t see much return on your investment when it is unoccupied. However, once tenants occupy or live on your property, the rental income will start coming in.
Just be careful not to buy before you’re secure in your finances. It will be regretful if you end up selling your property for less than its value or at the wrong time because upkeep has become too expensive.
Also, remember that you will need to have a cash reserve and budget for rates, property management fees, strata fees (for multi-dwelling properties) as well as potential repairs or ongoing maintenance.
3. Hire a Good Property Manager
You start investing in property independently, but it opens the door to mistakes and risks. When you’re saving up to buy an investment property, make sure to hire a good property manager.
It’s their job to settle and manage things between you and your tenants. Having them with you can guide you towards the right decisions. They can also act as a mediator that lightens the load and allows you to focus on other things.
4. Research the Market
Do your due diligence and make sure you know what other properties are available in the area you’re interested in. Chat with the locals to get helpful information that you won’t otherwise find online. It’s essential to know the dynamics of the area of your property.
5. Invest in the Property as part of a Strategic Investment Portfolio
While property investment planning can be an intelligent, rewarding financial strategy, you should consider other investment opportunities.
A well-balanced investment portfolio can help safeguard your money and investments. The aim is to invest in different asset classes. This way, if one of your investment planning drops, you will be protected by your other investments.
Buying an investment property is a potential strategy to increase your wealth and secure your future – but it requires effort, research, design, and patience. You need the help of professionals you can trust to make informed decisions.
Newcastle Financial Planning Group provides trusted financial advice for people in Newcastle and the Hunter. Visit our page and contact one of our financial advisers who can work with you to formulate wealth management and investment planning strategies that can help you achieve financial goals. Take the next step to financial security: make an appointment with our financial planners today.
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DISCLAIMER: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group Pty Ltd which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.