If one of your 2017 New Year’s resolutions is to consider building wealth for your future, here are a few tips that could help get you started:
Beware of higher borrowing costs
Rising interest rates throughout the market mean greater research and due diligence is required when looking for the right loan. Be aware that sometimes the cheapest interest rate advertised might not always be the bargain you believe it to be.
In some instances, loans with cheap rates may have other associated costs involved when borrowing for your specific circumstances. There may also be other features you want with your loan type that aren’t available on some discounted loans.
When sourcing a loan for investment purposes it is always a good idea to speak with your accountant. You should also discuss your situation with a mortgage broker to find the right product for you. Getting this wrong could cost you thousands in the long run.
Explore all areas
It can be tempting to only consider buying an investment property somewhere close to where you live. However, the property market in your suburb might not always be the ideal location to suit your investment goals.
Be sure to explore all areas before committing to one location. With the eastern states at record high prices, it may be worth looking locally in South Australia or further south to Tasmania for example to find a property that represents great returns and good value for your money. Looking at options in different states can also potentially reduce the amount of Land Tax you might pay.
Minimising the costs of running the property is also something to make sure you have considered. This could be by considering areas with lower council rates. Torrens titled blocks may also offer reduced running costs as compared to properties on Community or Strata titles, as this avoids Body Corporate fees. You could also consider purchasing house-and-land package options to reduce upfront Stamp Duty costs.
Approvals and construction of apartments, particularly in the Eastern States, is sky-high! Even here in Adelaide developers are following trend. For investors in the short term this can be a scary thought. An oversupply in apartments could mean increased vacancy rates or even distressed prices in the not too distant future. While long term investors may not feel the full brunt of this, it is still likely to hit them in reduced rental incomes.
Focus on the big picture
We all know the saying “as safe as houses”. This will certainly hold true for investors who look to the future. Whilst there is always market speculation, history tells us that property will peak and trough through regular cycles. No matter what the cycle might look like right now, properties should eventually grow in value. The key is being aware of the normal fluctuations in the real estate market cycle and remaining calm and cool while sticking to your chosen investment strategy. Assistance from your financial planner when setting up your structure can take care of some of the fear when investing.
Your expert team
Investing in anything of value involves some inherent risks and property is no exception. It’s your job as an investor to find ways to mitigate those risks wherever possible.
The easiest way to do this is to surround yourself with a team of experts who work with you to achieve your investment goals.
Seek advice from industry professionals such as mortgage brokers, accountants, financial planners and property advisers. Surrounding yourself with an expert advisory team will give you the best opportunity to make the most of your investments.
Call the experts at Nieuvision on 1300 832 554 for assistance and advice on the best ways to achieve your investment goals before jumping in. Or to book a seat at Nieuvision’s next FREE property investment info session click here.
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Disclaimer: We recommend that you seek independent financial and taxation advice before acting on any information in our articles and newsletters. They contain general information only and have been prepared without taking into account your personal objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. Interest rates are subject to change without notice. Lenders terms, conditions, fees & charges apply.