How A Local Mortgage Broker Can Help You Invest In Property?
One of the more popular ways in Australia for wealth creation over the years has been the purchase of property as an investment.
There are many issues that need to be covered off prior to purchasing an investment property in Australia, but using a local mortgage broker can help you invest in property Australia.
Tips On Buying Investment Property In Australia
Buying an Investment Property in Australia? Here are a few quick tips for buying as an investment property so you know exactly what a mortgage broker can help you with.
Understand The Market You Are Buying Into
What properties are available near you? How is this area performing financially? What kinds of people live here? These are all things that you need to understand to make an informed investment in an area.
There are many different ways that you could go about getting this information, first of all, you could try looking at census information and average metrics that are available for any given area from your local government, speaking to your real estate agent or a property manager familiar with the area or you could even do it the old fashioned way and hit the pavement asking local residents what they think of an area and who lives there.
We have access to some excellent Data on current suburb/demographics and sales data across Australia.
We can provide you with free and very useful reports to assist in your due diligence
Also, be sure if you do interview current residents you ask them to highlight any potential problems that they find in an area to really get a sense of what living here will be like.
Check The Age And Condition Of All Homes That You View
Obviously, it goes without saying that it’s unwise to invest in a property that will require huge amounts of time, effort and money to renovate and repair the existing problems.
But can you tell if a roof is leaking in full sunshine? How do you know if there is a mold problem if the walls are freshly painted? Well unless you’re extremely DIY savvy or a professional contractor we would advise having the property evaluated by a reputable and certified building inspector who can judge whether or not the building would be suitable or profitable to purchase as an investment.
But Don’t Let A Little Work Put You Off
Generally speaking, a lot of properties will have some kind of bug to bear. Whether that’s something minor like needing to redecorate to something a bit more complex and expensive like replacing the tiles on the roof.
However, unless the work will set you over budget it might be worth your while to still proceed with a property that requires some TLC and they are more often than not significantly cheaper than their fully repaired or new counterparts.
Another advantage of buying a property with a little work required is that sometimes if you already have taxable income, Australian law actually allows something called negative gearing in which the borrowing and maintenance costs of your property are deducted from your total income meaning that while you are technically still spending money on the house it makes your overall rate of tax less than it would be. And combined with the initial saving from purchasing the property it can still be a good ROI once the work is complete.
These taxation laws are regularly changing and any potential benefit does depend on what your gross taxable income is as well as the costs that can be passed through from the investment property from an accounting perspective. You will need to get some proper advice around this for your own circumstances.