The primary mistake that beginning property investors make is that they do not look for experienced investment property advice and information. They tend to act alone and think that they have a good enough understanding of how to buy property. This is often because they have bought and sold the properties that they have lived in.
But, many new investors will hesitate before they go in and buy a property because they become concerned about the real or imaginary potential problems that may arise.
The primary 'What If's' that hold back a lot of first time property investors are;
Probably the main worry for new investors is the possibility to losing a job.
What happens if I don't have tenant?
Another worry is in regard to interest rate increases which could then start to make repayments costlier.
Also, what if the tenants are bad and default on their rent payments?
These are not unreasonable issues to consider and if any of them occurred to an individual or even a family member it would have an influence on their finances.
The truth is there are thousands of property investors in Australia and very few of them get into any serious financial trouble as they go down the road into the future.
However, in order to feel comfortable and to in fact minimize any down side issues that concern 1st time property investors and to ensure their investment is going to be safe, secure, affordable and lucrative it's important to obtain and follow sound investment property advice.
There are seven ways to make property investing successful, here is an outline of them.
1/. The first is capital Gains: Capital gains refers to properties that are in locations where there is growth. Buying property in high capital growth locations will ensure that the investment enjoys high capital gains and constantly makes money.
2/. Excellent investment property advice is to make your investment decisions with your head and not your heart. Seekout and acquire property in regions that have financial and population growth which will deliver steady capital gains.
3/. Also, with the current market experiencing housing shortages as well as low vacancy rates it is important to only invest in properties that will provide a positive cash flow. Unless a property has potential to experience a massive amount of capital gain, do not invest in negative cash flow properties.
4/. Another important point to consider is the tax structure. Australian tax laws allow investors to benefit from the depreciation on newer properties, including the interior fixtures and fittings that were installed after 1987 as well as the depreciation on the building itself. So a new property will provide the investor with lower income tax rates. And they can use this extra money to further support the cash flow of the property.
5/. Investing in property should always be affordable and therefore be treated just like a business. A good business needs a good business strategy and a realistic budgeting scheme. So it is vital to get excellent investment property advice from a specialist who will be happy to put together a financial plan for you that reflects your financial profile.
6/. Property management also needs to be considered. A good property manager will work on your behalf to manage the property effectively. You need to do some research in order to find a reputable and honest property management company as this will save you time, money and headaches in the long run.
7/. Personalised financial strategy: Any plan should be calibrated to ensure that any property purchase makes sense for your financial position and that it also minimises your taxes. Also, it's wise to get investment property advice on how to establish the most effective loan structure for your finances, not just for the new investment property loan, but to inter-connect it with any other property loans you already have, like your home loan. Because, if structured properly it can in fact assist you pay to off any home loan you may have remaining, much faster (yes, it can be done).
But, many new investors will hesitate before they go in and buy a property because they become concerned about the real or imaginary potential problems that may arise.
The primary 'What If's' that hold back a lot of first time property investors are;
Probably the main worry for new investors is the possibility to losing a job.
What happens if I don't have tenant?
Another worry is in regard to interest rate increases which could then start to make repayments costlier.
Also, what if the tenants are bad and default on their rent payments?
These are not unreasonable issues to consider and if any of them occurred to an individual or even a family member it would have an influence on their finances.
The truth is there are thousands of property investors in Australia and very few of them get into any serious financial trouble as they go down the road into the future.
However, in order to feel comfortable and to in fact minimize any down side issues that concern 1st time property investors and to ensure their investment is going to be safe, secure, affordable and lucrative it's important to obtain and follow sound investment property advice.
There are seven ways to make property investing successful, here is an outline of them.
1/. The first is capital Gains: Capital gains refers to properties that are in locations where there is growth. Buying property in high capital growth locations will ensure that the investment enjoys high capital gains and constantly makes money.
2/. Excellent investment property advice is to make your investment decisions with your head and not your heart. Seekout and acquire property in regions that have financial and population growth which will deliver steady capital gains.
3/. Also, with the current market experiencing housing shortages as well as low vacancy rates it is important to only invest in properties that will provide a positive cash flow. Unless a property has potential to experience a massive amount of capital gain, do not invest in negative cash flow properties.
4/. Another important point to consider is the tax structure. Australian tax laws allow investors to benefit from the depreciation on newer properties, including the interior fixtures and fittings that were installed after 1987 as well as the depreciation on the building itself. So a new property will provide the investor with lower income tax rates. And they can use this extra money to further support the cash flow of the property.
5/. Investing in property should always be affordable and therefore be treated just like a business. A good business needs a good business strategy and a realistic budgeting scheme. So it is vital to get excellent investment property advice from a specialist who will be happy to put together a financial plan for you that reflects your financial profile.
6/. Property management also needs to be considered. A good property manager will work on your behalf to manage the property effectively. You need to do some research in order to find a reputable and honest property management company as this will save you time, money and headaches in the long run.
7/. Personalised financial strategy: Any plan should be calibrated to ensure that any property purchase makes sense for your financial position and that it also minimises your taxes. Also, it's wise to get investment property advice on how to establish the most effective loan structure for your finances, not just for the new investment property loan, but to inter-connect it with any other property loans you already have, like your home loan. Because, if structured properly it can in fact assist you pay to off any home loan you may have remaining, much faster (yes, it can be done).
About the Author:
Dave Fleming has been a popular investment property/mortgage specialist for more than fifteen years. For a limited period you can access his excellent complimentary mini-course on Positive Cashflow Properties Also, be certain to check out other vital property investing information at The Fundamentals to Successful Property Investing
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