With interest rates lower than they’ve been in years, property prices on the rise and rental returns on the up-and-up, you may be thinking that securing an investment property has never better. And you may well be right!
Thanks to the combination of low-interest rates and high rental yields, property investment may now deliver cash flow neutral or even cash flow positive returns and that could mean that your property can pay for itself.
Moreover, there may be significant tax breaks as well. Successful property investment does require homework and a little prudence. But don’t be put off , it is by no means too complex for the average Australian.
So whether you’re a seasoned investor or a would-be first timer now may just be the ideal time to make it happen.
Know your capacity before you decide what to buy, you need to establish your budget. With a clear idea of what you can afford to borrow you’ll be in a strong position to decide what type of property to focus on and in which price bracket.
Not only can a mortgage broker give you an indication of your borrowing capacity they can even help you secure a pre-approved loan. This service by most mortgage brokers doesn’t cost you anything, just your time or a quick phone call.
Decide on what type of investment property
Once you know your buying power you can think about what type of investment property to buy. Most investors favour residential property, typically a house or a unit. Each comes with its pros and cons and there’s no right or wrong decision, it really depends on the buyer’s preference.
Do your homework regardless of the property type, the location can make the difference between a good investment and a lemon. While there can be exceptions, you’re generally looking for a property that is close to public transport, has easy access to shops, parks, schools and restaurants, plus serviced by good road infrastructure.
With a clear idea of the right location you can set about researching the market. The internet is without doubt one of the most effective research options available to investors. As well as researching all the properties that are for sale you’ll also be able to assess what kind of rental values other properties in the area are achieving.
Be sure to use the skills of an experienced mortgage broker, who will run you through the various financing scenarios and products available to match your investment goals.
Remember, for the greatest success an investment property shouldn’t considered as a short-term endeavour, rental values will always increase over time with a well located property and so too will your returns.