Generally one of life’s most important financial decisions will be buying real estate, whether it is the family home or an investment property. Home ownership has many advantages both financially and from a personal perspective. At Brock Harcourts Gold, we help people on a daily basis make this decision.
An investment property from Brock Harcourts Gold may earn you significant tax savings as you can deduct mortgage interest and property taxes from your income tax.
The equity you build in your home through the life of the loan may help you plan for goals like travel, education and retirement.
Investment Property
It is wise to remember when buying an investment property you are making a business decision, so think with your head and not your heart. Common mistakes made when purchasing an investment are that people end up looking for the same things they would want in a home.
When you search for an investment property it is important to consider three things;
- Look for a street that is appealing. A mixture of conflicting building types can lower the desirability of the street.
- Property should be within easy access of all amenities.
- The street needs to have potential. The worst house in the best street may have more potential than the best house in the worst street.
From a business and investment perspective, it is important to make your purchase in a methodical way;
Confirm your financial position and shop around for finance
- Assess the financial capabilities of the property
- Consider the area you where you want to buy
- Obtain legal advice on investments and the potential tax deductions
- Obtain professional property management services
Assessing your financial position
When making any investment it is important to consider your financial position, your cash reserves and the equity in your current property all play an important part. Consider your long term objectives, will the property be part of your retirement plan?
Potential changes to your current situation all need to be considered. The birth of a child or loss of income can impact greatly. Always seek advice from a financial planner or investment adviser to help set your goals.
Decide On Your Strategy
Some property are great for rental return but will provide little equity growth, where others the reverse may be true.
Consider what is best for you long term before you start your search.
Finance - Shop Around
The importance of the loan you choose can be as important as the home you buy. In this competetive environment is important to shop around.
Professional Property Management
Having a professional property manager allows you time to concentrate on your property portfolio. Leave the tenant issues and credit checks to a company that specialise in this area.
At Brock Harcourts Gold, our professional property managers are up-to-date with the Residential Tenancies Act and better suited to nogotiate on your behalf if any issues do arise. Give them a call to discuss your specific requirements.
In the end the debate rages strongly whether to buy or not, particularly for first home buyers where the prices are rising and many may be precluded from the market. A first home buyer may need to consider the option of disregarding the first home grant in preference for purchasing an investment property. The clever first home investor may gain equity that can be utilised as a deposit for their own home when the time is right.