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Buying Investment Property
Why To Buy Investment Property?
Buying investment property for many Australians is their major source of wealth creation. In 2008 $68 billion was invested in this sector as it is perceived as a secure safe haven with considerable upward potential. Some investors initially buy flats or units to rent out while others enter the market using syndicates and property trusts.
Buying Investment Property Procedure
There are number of steps you need to complete when buying investment property. Move methodically and with care.
- Thoroughly assess the property location, infrastructure, style.
- Determine how much you can afford to spend buying investment property.
- Analyse the terms and methods of finance available.
Margin lending, variable or fixed loans. - Allow up to 10% for expenses incurred additional to the purchase price.
- A property valuation will be conducted by the lender – if a loan is involved - who will also require insurance on the property from settlement date.
- When buying investment property ensure a solicitor or conveyancer is secured to handle the legalities of your investment property purchase.
Things to Remember When Buying Investment Property
There are number of things you should remember when buying investment property:
- Initially, investors often use the equity in their house as collateral to help finance their investment property purchase; increasing the amount they can borrow and reducing the deposit needed.
- Capital growth on investment property over time has proven to be good value.
- When, looking to buy investment properties sniff out new planned developments freeways, shopping centres and infrastructure all of which will enhance the value of your purchase.
- Constantly monitor and assess your property investment loan to ensure that it remains the best option for you over time.