Property Investment: Getting Started
Property investment is a pretty common practise these days across all age brackets. Depending on how you play it – it can be a great long-term investment practice that reaps many benefits beyond another source of income. Today, our real estate agents in Williams landing are going to take you through the basics of property investment – including what it is, some of the benefits and how you can get started. Let’s dive right in!
Property investment is when you invest your money in a property (or multiple) with the expectation that you’ll see a financial return. These can be fixer-uppers – where you purchase a rundown property and pay to fix it up and then sell/lease it – or just purchasing a brand-new property to then lease out to others.
Benefits of property investment
There are several benefits that come with property investment that our Williams Landing real estate agents think you should know about.
- Rental income – You’ll have a second income at your disposal from the tenants you’re renting the property out to. This can be great if you want to put a bit of extra money aside or to pay off the mortgage of the property.
- Fairly stable – As opposed to cryptocurrency and other share investments, property is much less volatile and will retain its rough value throughout long periods.
- Capital growth – If you ever look at selling your property and it has increased in value, then you’ll receive a capital gain when you sell. Keep in mind though, you’ll also have to pay a capital gains tax (CGT).
- Tax benefits – You can offset the expenses of an investment property against your rental income. There are also other tax associated benefits such as negative gearing that you can take advantage of. Have a chat with your tax accountant as each case varies
- It’s a tangible investment – Unlike some other investment options, property is a physical object that you can see and touch.
- Anyone can do it – With property investment, there is not a lot of technical or specialised knowledge required. Essentially, anyone can do it with the right attitude.
- Williams landing Property Management team are experienced, professional and multilingual to manage your property
When you decide to take the leap into the investment world there a few things that you should keep in mind so as not to make any mistakes. That way, your first investment experience can be as lucrative and smooth as possible.
What do you want to get out of property investment? Is it a secondary cash flow or are you looking to grow your portfolio? Maybe you just want to establish an investment portfolio so you can pass it down to your children. Whatever the reason, it’s good to establish the why before anything else.
Research the market area
Pick an area and look at price trends as well as amenities that are located around the properties. Are there bonus incentives that will entice more people to buy or rent in the area? How have properties generally sold in the area and do they increase in value or, at the very least, hold their value?
Use your head and not your heart
Try to avoid falling in love with a property and basing your decision off of that. Use hard statistics to fuel the majority of your decision rather than what you prefer.
Don’t bite off more than you can chew
Depending on your financial situation, you may not be able to afford to buy a property outright. If this is the case, then once you find something to purchase, you’ll have to put an effective plan into place.
This includes how you’re going to finance it and if you’ll be able to meet monthly payments with the rental income you’ll be receiving. Don’t buy an expensive property just because it looks incredible and you want something luxurious. If you aim for something above your means, then you could end up in financial trouble.
Don’t expect to become a millionaire overnight
Be realistic about your new investment venture. Whilst you might get lucky and it could become a short-term investment – it will most likely be a long-term one. It’s about being patient and waiting for the perfect opportunity to sell.
Do you need real estate agents in Williams Landing?
Red 23 Real Estate are die-hard real estate agents in Williams Landing that can help you get into property investment. Our experienced and friendly agents can offer you advice and tips as well as guide you towards making your first investment purchase – whether you’re new to it or would just like some outside, expert opinion. We also offer property management services if you require some assistance with management further down the track.
If you would like to know more about what our Williams Landing real estate agents can do for you, then please give us a call on 03 8372 2122. Alternatively, you can contact us via the form on our website.