Starting with Property Investment
1. Should I buy a home or investment property first?
Buying a home is an emotional need to have a shelter of your own but buying an investment property is for creation of wealth for your future. People can have different lifestyle and work requirements. If you are not sure how long you are going to stay at a place because of your circumstances, investment property can give you the opportunity to use your tax and rental income to create an asset which grows while you keep switching locations. You don’t have to live in your investment property, but if you have fixed plans to stay at a place, then buying a home and then using the equity of that home to buy an investment property will be a good plan as well.
2. Should I choose an old or new property for investment?
Choosing a property for investment has to be a careful decision. If the property you choose, doesn’t fulfil your objectives, then it can put you under financial stress. Old properties have less tax deductions to claim, more repair and maintenance (depending upon the age and condition of the property), more competition from other rental properties and less appeal to the tenants. Brand new investment property can get you all what the old property is missing. We can help you to make a better decision.
3. Is a positively geared property better than a negatively geared one?
When your investment property related expenses are more than the income you receive from it, the property is called negatively geared and when the opposite happens, it is positively geared. Every person has a different financial situation in terms of the income they generate and the liabilities they are under. The main reason for buying an investment is to have sustainable capital growth over a period of time and rentability to manage the expenses. We can discuss your goals and situation to work out a customised option for you.
4. How do I know if I can afford it?
Whether you can afford an investment property or not, is a serious concern for any investor. And it should be ascertained at early stage of investment process. We can sit with you and work out through our licensed mortgage brokers to see how much you can borrow and set a budget for you . Then we will calculate the income expense from the investment property option to check if it sits in your budget. Matching the right option without upsetting your current satiation is our primary objective.
5. How much money do I need to be an investor?
If you are renting then of course you will need a deposit or you can use the equity from your mum or dad’s place with their consent. If you are having your own home, then you can use the equity of your home to buy an investment property. All these options are subject to the finance approval by a bank or a lender. We can work out the exact amount of equity or deposit you will need to get started.
6. Is it a good idea to buy a renovated property for investment purposes?
As mentioned previously, old properties have their own set of issues. Buying something with cosmetic changes, doesn’t increase the structural age. With new changes coming into force regarding what you can claim on fittings and furnishings for depreciation purposes, it will be difficult to make things work in your favour. We can explain to you in detail how the tax deduction on fittings and furnishings can impact your cash flow from the property if you are using the tax refund from negative gearing.
7. My friend bought an old place and subdivided it to make money. Is it a good idea?
Buying an old place to subdivide and selling it for a profit is a process dependent upon many factors such as zoning regulations, council restrictions, demand in the market, economic situation etc. There are costs involved in doing all the hard yards such as council fees, demolition cost and selling cost. If it worked for you friend, it doesn’t guarantee that it will work for you as well. Everyone has their own risk appetite and budget to play. We can discuss with you the opportunities in the market and how they can work in your situation.
8. What if a tenant trashes my place or stops paying rent?
Investment property is meant for a tenant to live. Choice of demographics when you choose a property plays a big role. You will need a good property manager for tenant selection and for looking after your property. Insurances such as landlord insurance can cover you for loss of rent if a tenant does malicious damage and goes absconding without paying rent. Buying investment property at a location which is in demand increases your chances of tenant throughout the year. We can discuss in detail the property options suitable for you based upon demand and supply reasons.
9. How do I get started with Acquired Properties?
You just have to contact us and we will explain you the step by step process for investing in property. We can discuss your personal situation at your home in your own privacy or you can come and see us at our office. We will tell you way things are. If you don’t qualify, we will let you know straight away. We value your time and future plans and design a road map for your objectives.
10. Do Acquired Properties handhold me till I get the keys?
We understand your concerns as an investor. We stay with you right through. Starting from first meeting, we will be with you to let you know about the updates on settlement, construction and handover. You will have the same investment property consultant all the time communicating with you from start to finish