The number one mistake new property investors make is they don't seek out experienced investment property advice. Generally they go it alone thinking they understand how to purchase property. After all, they've purchased and sold homes to reside in before, in most cases.
However, some people will hesitate before making an investment in property, this is usually because they may be aware of the risks involved and start worrying about the worse case scenarios.
The primary 'What If's' that hold back a lot of first time property investors are;
One of their main worries of investing in property is the potential loss of employment.
What happens if I don't have tenant?
Another is interest rate increases that may make repayments impossible.
Also, what if the tenants are bad and default on their rent payments?
These obviously could be potential problems that if not researched could put off a potential property investor as these worries start to overwhelm them about the investment possibly giving them financial problems.
In reality though, many tens of thousands of people own investment properties in Australia and most weather any of the above economic bumps without undue calamities befalling them.
The best way to prevent problems is to have excellent investment property advice in the first place.
There are seven essential fundamentals to profitable property investing and following we have supplied a short outline on each of them.
1/. The first is capital Gains: Capital gains refers to properties that are in locations where there is growth. Buying property in high capital growth locations will ensure that the investment enjoys high capital gains and constantly makes money.
2/. Excellent investment property advice is to make your investment decisions with your head and not your heart. Seekout and acquire property in regions that have financial and population growth which will deliver steady capital gains.
3/. It is important to invest in a property that will be easy to rent throughout the life of the investment.The ideal area is somewhere that is desirable to live in. The area should also have service, transport and amenities that are easy to access. Properties that will always provide a positive flow of money should always be sought after, otherwise there are more risks.
4/. Exceptional tax structure: Australian tax laws allow the individual to reap the benefits of the depreciation on new properties including the fixtures and the fittings that were constructed immediately after 1987as well as the building depreciation. Therefore, new property enables the individual to enhance their position by substantially reducing their income tax they now pay and channelling these resources to their very own benefit.
5/.The affordability of the property is very important. Property investing in just like any other business; it requires a business plan and an appropriate budget. Therefore, it is extremely important for potential property investors to get sound investment property advice from an independent and knowledgable expert in the field of property, who can help put together a finance plan that will be appropriate for the investors financial situation.
6/. Property management: A skilled property manager will be professional in all aspects. It may require some homework on your part or recommendation from someone to find just the right one. Any extra effort you put in here will be well worth your effort in time, money and headaches.
7/. A personalized financial strategy is important too and will make sure that any properties considered will meet your financial situation without too much risk and that will substantially reduce your taxes. Another essential aspect is putting together an effective loan structure that will work for all your repayments including your home, car or business requirements. A good loan structure may well help you pay off your home mortgage earlier, which provides the ultimate peace of mind.
However, some people will hesitate before making an investment in property, this is usually because they may be aware of the risks involved and start worrying about the worse case scenarios.
The primary 'What If's' that hold back a lot of first time property investors are;
One of their main worries of investing in property is the potential loss of employment.
What happens if I don't have tenant?
Another is interest rate increases that may make repayments impossible.
Also, what if the tenants are bad and default on their rent payments?
These obviously could be potential problems that if not researched could put off a potential property investor as these worries start to overwhelm them about the investment possibly giving them financial problems.
In reality though, many tens of thousands of people own investment properties in Australia and most weather any of the above economic bumps without undue calamities befalling them.
The best way to prevent problems is to have excellent investment property advice in the first place.
There are seven essential fundamentals to profitable property investing and following we have supplied a short outline on each of them.
1/. The first is capital Gains: Capital gains refers to properties that are in locations where there is growth. Buying property in high capital growth locations will ensure that the investment enjoys high capital gains and constantly makes money.
2/. Excellent investment property advice is to make your investment decisions with your head and not your heart. Seekout and acquire property in regions that have financial and population growth which will deliver steady capital gains.
3/. It is important to invest in a property that will be easy to rent throughout the life of the investment.The ideal area is somewhere that is desirable to live in. The area should also have service, transport and amenities that are easy to access. Properties that will always provide a positive flow of money should always be sought after, otherwise there are more risks.
4/. Exceptional tax structure: Australian tax laws allow the individual to reap the benefits of the depreciation on new properties including the fixtures and the fittings that were constructed immediately after 1987as well as the building depreciation. Therefore, new property enables the individual to enhance their position by substantially reducing their income tax they now pay and channelling these resources to their very own benefit.
5/.The affordability of the property is very important. Property investing in just like any other business; it requires a business plan and an appropriate budget. Therefore, it is extremely important for potential property investors to get sound investment property advice from an independent and knowledgable expert in the field of property, who can help put together a finance plan that will be appropriate for the investors financial situation.
6/. Property management: A skilled property manager will be professional in all aspects. It may require some homework on your part or recommendation from someone to find just the right one. Any extra effort you put in here will be well worth your effort in time, money and headaches.
7/. A personalized financial strategy is important too and will make sure that any properties considered will meet your financial situation without too much risk and that will substantially reduce your taxes. Another essential aspect is putting together an effective loan structure that will work for all your repayments including your home, car or business requirements. A good loan structure may well help you pay off your home mortgage earlier, which provides the ultimate peace of mind.
About the Author:
Dave Fleming has been a leading investment property/mortgage professional for more than 15 years. For a restricted period you can access his excellent complimentary mini-course on Positive Cashflow Properties Also, be certain to check out other vital property investing information at The Fundamentals to Successful Property Investing. Also published at Revealed- the Seven Fundamentals for Successful investment properties.
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