We have put together a cheat sheet to help avoid the common pitfalls.
Pick A Clear Strategy/Goal
Am I purchasing this property for yield or growth? It’s not realistic that you will be able to achieve both equally. If you want to purchase multiple properties considering purchasing a property to add value via minor renovations to get equity may be prudent. Conversely, if you’d like to purchase a lock up & leave an investment that is relatively cash-neutral buy into buildings or properties that have low upkeep.
Put together a Property Brief
By having a list of priorities it will enable you to make the right purchase.
What size apartment/house, how much renovations do I want to do, what areas, budget, aspect, distance to transport/amenities, what timeframe would I like to purchase and lastly do you have a comparable property that sold that fits your specifications. 5 Must haves are what you need before beginning a property search and this will help you avoid emotion throughout the process.
Create Cashflow Spreadsheet
Since it’s an investment knowing your financial position before making the purchase is vital. Key figures such as expected rental income, ongoing costs, target yield, renovation allowance, property management fees and weekly cash flow should be considered at any opportunity. Another good tip is to always be conservative in your budgeting, if you calculate off a higher figure that isn’t achievable the investment will turn out to be less lucrative in the long run.
Take Advantage of Tax Benefits
By using an accountant, they will be able to help you maximise any tax benefits available to you. Some key benefits to be aware of: negative gearing, depreciation reports, claiming interest charged through mortgage, management costs and maintenance costs. Speak with a mortgage broker to confirm your financial position.
We want to hear more about how we can help you achieve your goals. Send us an email or call us and let's talk about your property needs.
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