Yellow Brick Road Castle Hill we know there are many reasons to own
investment property: you might want an asset for retirement, you might wish to
rent where you live and own a property elsewhere, or property might be your
choice of wealth-creation. Regardless of your reasons for investing, there are a few
things need to keep
GOAL: Be clear about what you want to achieve, and by when. Before you buy a
property, you should decide on your earning goals: will this be a negatively or
positively geared investment? Will you invest in renovations to increase your
rental return? And in what
time-frame should I achieve these objectives?
Write detailed plans about what funds you have available to spend, how much you will think you will need to
borrow, and what those
borrowings will cost. Be
sure include the cost of renovating, repairs and maintenance as well as
the predicted costs of management, insurance and rates. And then calculate
rental income. If you need
help determining your budget, make an appointment with one of our friendly
advisers at Yellow Brick Road Castle Hill today.
RESEARCH: Do your research before you buy a property. Visit real estate
agencies in the area and pick up their ‘for rent’ sheets. Try to get an idea of
what rents are being asked for what kind of properties. Consider asking agents what properties they
would like to manage. Go to some open days. Get a sense of which agents are on top of their game.
INSPECTIONS: If you’re buying a place to rent to
others, basic things must be in perfect order that you might’ve let slide if you lived there yourself.
Always have an inspection done by a qualified expert.
● TAX ADVICE: don’t rely on casual barbecue chatter for your tax advice. If
you intend to negatively gear your rental property, and claim the loss you make
against your taxable income, then you should be advised by a solicitor or
accountant like your local
Yellow Brick Road Castle Hill mortgage broker or adviser.
● FIXED OR VARIABLE: Budget a scenario for a fixed rate
and a variable rate. Fixed rates are currently very low, and give you interest
rate certainty for two, three or five years. But variable rates provide you
with flexibility. Many lenders allow you to split your mortgage between fixed
and variable. If you’re unsure
of the type of rate is best for your situation then make an appointment with
your Yellow Brick Road mortgage broker as we can easily compare rates these
rates for you.
RENOVATION: Do your best to assess the renovation
requirements before buying the property, and put these in your budget. Don’t
get carried away with renovations – stay within your budget.
● INSURANCE: Landlord insurance is imperative and you
should contact a broker if the inclusions and exclusions confuse you. Renting
property is a business and some of the features of landlord insurance might not
be familiar. It’s vital to
get this right as it can save you in the long run. Speak with your Yellow Brick
Road Castle Hill adviser today to find out more.
● MANAGEMENT: There’s a clear choice. You either decide
to manage the property yourself, doing basic maintenance and repairs. Or you
use a managing agent who will charge a percentage of the rent. DIY managers of
property can usually do the handiwork, but inexperienced owners usually stumble
on tenant law and collecting rent.
Investing in property is an excellent way to build wealth,
but it should be approached like a business. Have a goal, have a plan, and
stick to your budget. And
remember, its always best to get some expert advice before you buy, so speak to
one of our advisers at our Yellow Brick Road Castle Hill branch today.