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Property Investments

Hello I’m Clare from Love Finance and congratulations on looking to purchase an investment property in Australia. Many people often wonder if they can purchase an investment property and if so how do they go about it. Which type of investment property to buy or will a property be a good investment. I love investment properties because I feel we have more control over them than other types of investment strategies that are out there in the market.

I believe property investment is a great stream of recurring income and I personally own many investment properties. My goal is to help my clients through the real estate investing journey in every way possible, walking you through the steps of finding a property, getting a loan and taking your first steps towards helping you with a stronger financial future.

What I want to share with you today are three common property investing mistakes that I have seen people make over the years. I have seen this have a negative impact on their financial situation; I really don’t want to see you make these same mistakes.

1. You buy a property in your own suburb

This can sometimes be an emotional decision rather than a good investment decision. Lots of people feel that they would like to keep an eye on the property, fix little things that need fixing and sometimes even manage it.

I can tell you I did this once and I would never do it again. You will find that you get tenants calling you any time of the day with the smallest of complaints. To combat this, I engage great property managers that take care of all that.

Be a Smart Investor.

I understand all the pros for buying in your suburb and relate that it is attractive to the novice investor as it gives you comfort. However, if you want to give yourself the best opportunity to invest, your decision should be based on research and understanding of property trends. I can help you with the research so that you are confident in your decision based on data and analytics.

2. Old Versus New

What are the differences and how can it affect your bottom line? I feel that new property wins out every time, noted below are a few reasons why:

Strong Cashflow

New properties can definitely give the investor an upper hand when it comes to cash flow in most cases. The Australian Tax Office allows the investor to offset a certain amount of deductions each year. For example materials of the building and the fixtures & fittings.

Usually, the values for the depreciation on older properties have already depreciated and cannot be claimed at the extent of new properties, if at all. This is something that you would need to discuss with your accountant.

I have found that newer properties appeal to a lot more potential tenants, and usually have a higher yield than older properties.

More Choice.

If you are looking to purchase off the plan, either an apartment or house and land package your choice of which apartment or house you want is highest earlier in the life cycle. For example, if a developer markets a 100-unit apartment building, the first purchasers have a choice of all 100.

As the development progresses to completion, the choice for the remaining purchasers is reduced to whatever hasn’t been selected already, that is, the leftovers.
When you look at established properties you only have the choice of what is currently on the market so your decision is made based on the pros and cons of a single asset.

Imagine being able to choose from property that is new and has pre-market access in great areas. This is what I can assist you with.

3. You turn your existing home into an investment property.

Emotional verses good investment decision

Again this can be an emotional decision and not based on a sound financial decision. You have loved living there and the property holds lots of memories. This is thinking with your heart and not your head.

If this is a permanent move from this property and you are purchasing a new property to be your principal place of residence, there are a couple of things to consider.
You may have paid a lot of money into this property and therefore you have a lot of equity in it.

If you plan to use some of that equity as the deposit for your new home, you may then be in the position where your owner-occupied home has more debt on it than your investment property. This really needs to be the other way round.

Tax Savings

Your principal place of residence should always have the least amount of debt while the investment property has the maximum amount. This way the non-tax taxable debt is at a minimum while your tax-deductible debt is at the maximum.

I assist my clients to buy properties in great areas that have been well researched and that are usually off-market – meaning that they haven’t gone to the open market and my clients get access to them first. This allows my clients to get in early on some of the best deals available – giving them a great place to start in property investing.

How do I do this? I’ve built great relationships with companies over the years that actually offer me the opportunity to share these particular properties with my clients. My clients love to be able to see properties pre-release because they get a bigger selection of property to choose from.

If you’re ready to take the steps towards purchasing an investment property, becoming more financially stable and help create a better lifestyle for you and your family in the future then  make a phone call to me now. We’ll have a chat and see how I can help you. Just one phone call could potentially change you and your family’s current financial position to something you have been dreaming about.

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