Top 10 Tips for Buying an Investment Property

piggy bank with house

Property is one of the safest long-term investments you can make. Here’s our top 10 tips to help you move toward buying an investment property.

  1. Assess Your Investment Goals
    Are you buying for a quick financial turnaround or purchasing for a long-term rental? During boom times, it is much easier to ‘flip’ a property for a quick profit. In slower economic times, it may take years to make a profit.
  2. Find Out Your Borrowing Capacity
    It’s important to find out your borrowing capacity first as a loan for an investment property is different to a loan for a home that you are planning to live in. Ask your bank for a pre-approval or assign a mortgage broker to source the best deal for you.
  3. Budget for Extra Costs & Hidden Fees
    Along with the cost of the property you need to factor in additional costs such as: rates, insurance, land tax, stamp duty, solicitors fees, building inspection and, depending on the condition of the property, repairs and general maintenance.
  4. Do Your Research
    As an investor you’ll want to get the most out of your asset, so look for suburbs that are either set to ‘boom’ or are already experiencing steady growth. Some areas in Melbourne’s eastern suburbs that have experienced high capital growth in the last twelve months are Malvern, Surrey Hills and Hawthorn, as well as suburbs near the potential North-East Link – Kew, Balwyn North, Box Hill, Donvale and Ringwood East.
  5. Talk To the Professionals
    Chat to local property managers; find out what areas have strong demand for rental accommodation. Ask about school zones and amenities such as public transport and shops.
  6. Decide What to Invest In
    The eastern suburbs now offer a diverse range of properties from new apartments and townhouses to outer suburb homes with backyards, therefore, you will need to assess your budget and suburbs of interest, as well as decide what type of investment property would most suit you.
  7. Attend Open for Inspections
    When buying any type of property you should view it in person or have a nominated friend, family member or associate do so for you.
  8. Get a Building Inspection
    When you’ve found a suitable property it’s recommended you obtain a building inspection. Building and pest inspections are tax deductible and probably one of the most important things you will do in terms of safeguarding you asset. The inspection should find any structural defects, as well as any signs of pest infestations like termites.
  9. Weigh Up Positive & Negative Gearing
    Borrowing to invest is called ‘gearing’. The more you borrow, the more you will pay in interest. If you have borrowed to invest and you’re making a profit, you are positively geared. If you’re making a loss, you are negatively geared. Either way, gearing is still costing you money and needs to be factored in with your property purchase.
  10. Manage Your Investment
    Whether you wish to appoint a professional property manager or handle the lease privately, management is the key to preserving your asset.

If you’re interested in purchasing an investment property talk to one our of sales team today.

Share:

More Posts

Preparing your property for sale during covid-19

In Real Estate, almost nothing goes hand in hand better than spring and the Melbourne property market. But in keeping with the theme of 2020, even this is looking a little different this year. As part of Melbourne’s reopening roadmap, we have now seen private inspections and auctions recommence, as well as property appraisals. So, what can you do to

8 things you might be forgetting to spring clean

Aside from the usual weekly cleaning such as vacuuming, mopping and cleaning the bathrooms, there are other areas of your home that might need some much needed attention. Now that spring is well and truly here, get inspired to do a more deep clean to really make your home sparkle. 1. Door knobs & light switches Let’s face it door

Easing of restrictions for metropolitan Melbourne’s real estate industry

Easing of restrictions for metropolitan Melbourne’s real estate industry When it was announced that a number of real estate services were to be permitted under Step 2 of metropolitan Melbourne’s reopening roadmap, a sense of relief was felt by industry professionals, as well as a collective of buyers and sellers whose best laid plans have been severely impacted by Melbourne’s

Renovating your investment home for best results

Renovating your investment home for best results So, you have just purchased an investment property or maybe your tenants have vacated and your property needs a refresh? Renovating can be expensive and there can be many pitfalls. You want to make sure you get as much value for your dollar as you can, so read on for smart and money-wise

Send Us A Message