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August 2014

Experts Share Property Investment Tips

For the serious investor, there are few investments that are better than property. Residential property weathers the economic, social and political cycles better than most other types of investment. Whatever your age or stage of life, property has both the flexibility and the wealth-building power to deliver an earlier, more secure, or more prosperous retirement.

The internet has a wealth of property investment tips and advice from experts, so it's a good place to start your research and do your homework. Websites such as Realestate.com.au and REIWA also provide helpful calculators and tools to assist you in your planning process.

We have scoured the web for some excellent property investment tips from the experts:

TIP 1: Don't shy away from new properties

Many investors feel they need to touch, feel and see a property before they buy. It has to be “real” and established. As there are so many established properties on the market to choose from it must be easier. They may have the misconception that new properties are more expensive and not suitable as an investment. However it may surprise budding investors to know that there are many savings to be made in buying a new property. Savings can be made on the entry price if buying early into an off the plan development. Savings on stamp duty can also be made when building a new investment house & land package, and there are also home buyer incentives in some states for new properties. Tenants are very attracted to new properties and are willing to pay higher rents, and there are higher tax benefits on new properties that increase the positive cash flow. Amazing!

Lindy Lear - Reader’s Choice Award in 2009, 2012 & 2013 for Property Investment Advisor of the Year.

TIP 2: Create a purchase plan

What does an ideal purchase plan look like?

It should facilitate your goals of growing your portfolio to a point where it’s producing the growth or income you’re aiming for. It should serve as a structure for you to stay in the game.

Here’s an example of a purchase plan you can follow:

  • Define your strategy
  • Set up your criteria
    • Do your research
    • Cull your list
    • Get appraisal
    • Do your due diligence
    • Make and offer and negotiate

Nila Sweeney - Managing Editor of Australia’s leading property investment magazine, Your Investment Property

TIP 3: Protecting your Investment

While you don't need to pay for home contents insurance, you will need to organise building insurance. This covers you for full building replacement if, say, the house burns down. If you buy a unit, building insurance will be paid from your strata levies.

You should also consider taking out landlord insurance. This protects you if your tenant damages the property or if they run off without paying the rent. The cost of landlord insurance is tax deductible.

If you are relying on part of your employment income to cover the interest cost and expenses, make sure you have adequate income protection insurance. Your ability to earn an income may be the most important asset you have.

Moneysmart - ASIC

TIP 4: Do your Homework

There are always sources within the property industry stating which locations are the up and coming hot spots. Although this information can give you an idea of the state of the market, the information is often generalised and can be out-dated. Doing your own research about a location is always the best approach. Looking at the fundamentals of a particular area like demand for housing that you are considering purchasing in, employment, population statistics, future development and proximity to essential services, will all help you compare potential locations. Once you have done your homework on paper, there is nothing like visiting the location to get a first-hand impression.

Gavin Smith - Director & General Manager of State Custodians

BONUS TIP:

For more info on property investment in Perth, contact the One Agency South team today and see how we can help you. If you would like to receive more property investment tips, follow One Agency South on Facebook!

 

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