1. Know Your Budget
Before taking a plunge into property investing, it is essential that you have an in-depth understanding of your cash flow. Plus, ask your bank for the pre-approval of your investment loan so that you know how much you can borrow prior you hunt your properties.
2. Don’t Skip Ongoing Costs
Ensure that you have sufficient budget for the insurance, rates, and general repairs. When you have bought your perfect investment property, know what you can do to stop costly maintenance problems like as replacement of old taps.
3. Purchase In the Growth Area
Pick an investment property in the areas where there is strong demand for the rental accommodation. So, purchasing an asset to transport, schools or universities will make it more alluring to the renters.
4. Be Practical About your Investment Goals
If you are hunting for the long-term property for fast capital growth, then it is easy to renovate properties and convert them for a quick profit. In slow economic times, it may take many years to get the same growth.
5. Create Sweat Equity
Paying tradesman to renovate your investment property is a costly affair. But if you are prepared to get into this, you can boost your profit margin and save money by doing the work on your own.
6. Hunt For the Liveable But avoid the Grand One
Note that the rental property only has to be neat, clean, and functional. Don’t get into buying a luxury asset as it has stylish decor and interior.
7. Don’t Get Emotional When Buying
When hunting for the house, you have to buy with your head not with your heart as some people might get caught up in the emotions easily. While home on the steep block might offer you mesmerizing views but it could be a nightmare for you to renovate due to the excavation or retaining costs. Also, make sure that you know the advantages and its risks.
8. Think Before Negative Turn-out
Your asset may get negatively geared if your repayments on the investment loan won’t entirely covered by the rent. While this can offer tax benefits, it can also result in the financial distress if you don’t have sufficient cash flow to cover the loan repayments. So, you need to consider your budget carefully before purchasing.
9. Inspect Your Building
Before signing any buyer contract, take your time to understand the building report well to avoid any high-cost repairs. Also, the termites are one of the leading issues that you need to look out.