• Risks and Rewards

Understand what you want to achieve from your investment, both now and into the future. Your property could benefit from capital growth, earn rental income and even provide taxation benefits. Make sure you speak with your accountant about the taxation implications. This should include negative gearing potential as well as future implications of Capital Gain Tax or not. Don’t forget to understand the expenses of an investment property and the legitimate deductions. Know what you are wishing to achieve before you buy will help with what type of property and even where best to buy.

• Get approved

Invest a little time on yourself and obtain finance pre-approval if you need a loan to buy your investment property. This will give you the confidence when looking and will also help to kick start your budget planning. You are not obligated with a pre-approval so having this sorted will allow you to focus on acquiring your property.

• Do your Homework

Ask your mortgage broker for a free property report, these often include current rental yields, latest statistics of the area and this information is broken down comparing houses and units. The report can also provide unit and home sales history for your area of interest and specific property types.

• Shop far and Wide

Looking for an investment property is different than looking for your own home. You should consider, does the area have a high rental demand, do the demographics match the type of tenant you want, is public transport conveniently accessible? Look around to see what might turn a tenant off such as noise or a busy road can be a major factor. Is the property private and secure? Lastly, but by no means least, is the property in need of work, will it become time consuming to maintain?

Managing your Investment

You have 2 options that most people ponder,

o   do I manage it myself,

o   or should I give it to a professional rental management agency

Most investors do not have the time to properly manage a property. Would you have the time to change a light bulb on demand or arrange a plumber in an emergency? Don’t forget a management agency will also vet the prospective tenants on your behalf and make sure they keep track of rental payments. If payments are late, or not in-full, they will chase up as required. They are also willing to pay the bills for the property on your behalf. Investing in a quality management agency can pay dividends

• Get Covered

As the owner of the property you will still need insurance to cover the building. Specific landlord insurance is available. Look into the detail of the policy as not only can it cover the building it can also cover loss from non-payment of rent, protection against malicious damage, even damage to the building in the event of theft.