While owning a home can be very rewarding for some people, it doesn’t usually come without sacrifices.
Investment properties (including projects and developments) are no different.
In fact, even more consideration needs to be given to investment properties for the more inherent risks they carry, as opposed to say just owning the home you live in.
When looking to purchase an investment property, careful consideration must be made to ensure;
You don’t overcapitalise by spending too much to buy, improve and hold
You know what type of loan will work best for you and it’s features and benefits
You know how much you can borrow and afford to repay
You’re buying in a desirable area that has historically shown low vacancy and good capital growth so you’ll be building reliable equity over the time you have the property
You’re managing the tenants correctly and keeping them happy
You’re not just paying the bills but staying well and truly on top of them
You can manage periods of time with a vacant property and still keep up repayments
You have sufficient funds to cover costs, fees and charges as they come up
You’re aware of and familiar with the taxes and structures associated with investment properties
You can reasonably endure times of financial hardship, property, economic and political uncertainty
You’re aware of general maintenance costs and ongoing applicable rates and fees
You’ve made a proper and complete financial plan that is custom tailored to suit you and your requirements to put you in the best position possible for the foreseeable future
As you may already be able to see, not everyone will suit property investment and development and that’s okay – it’s better to know what you’re up for in advance before making the financial decision and then only discovering in the future that it was a costly mistake.
Looking to sell, buy or lease? Click here to contact John
This information is of a general nature only and does not take into account your objectives, financial situation or needs. We are not financial, legal or tax advisers. You should seek appropriate professional advice specific to you before acting on this information.
