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Buying & Investing Tips

Choosing the property for you

It is often an exciting event when it comes to purchasing a new home. First off you will need to decide on what suburb/area you would like to live in. Consider how important locality to schools, transport and general amenities are. How much accommodation would you like your property to offer. Do you require a large yard for children to play or desire vehicles of street.

With investment properties it more comes down to purchasing a in an area with the best capital growth and a steady rental return as the earnings will make holding the property more affordable.

Different types of residential property can outperform each other over time. For example vacant land purchased in an area of limited supply may appreciate quickly however doesn’t offer any income in the mean while. Or investing in an apartment may offer a fantastic rental yield and mean less maintenance costs in comparison to a free standing home. It is important to note that properties in some young areas which are still being established offer great rental returns however may take longer for the investor to benefit from great capital growth opportunities.

Interest Rates and Mortgages

When purchasing a 1st home or investment property it is good to have already organised exactly how much you will be willing and able to borrow. Speaking with a finance broker is fantastic as they will be able to shed a lot of light on where you stand with finance and often will be able to best guide you in terms of what type of load will best suite your circumstances, and possibly arrange your finance pre-approval. 

There are many different options when it comes to choosing the right home loan. Generally with an investment property “holding costs” are normally tax deductable. It is wise to keep your investment loans and home loans separate so that it will be easier for your accountant to claim your tax benefits.

It is also important to when taking out a mortgage to consider a fixed or variable interest loan. Choosing a fixed interest rate can really pay off if the timing is right, however variable interest rates tend to be cheaper overall.

Age and Condition of the property

It is wise when purchasing a property to employ a licences builder and/or timber pest inspector to complete written reports on the property so that you have “peace of mind” that you know at settlement that the property will be free from termites and complies with the Australian Building Standards. Depending on the age of the property and overall condition.

Understanding the market where you are buying:
It is important to monitor the suburb, the more property you are able to view in your subject area the greater insight you will have on pricing of listings and negotiating your purchase. 

It is not a bad idea to speak with a member of planning at the local shire and find out what major developments or changes maybe occurring in the future. For example an improvement to the local parkland or school located nearby, to a widening of a road/by-pass. These factors may influence the overall market worth of the property in time. 

Consult professionals and depend on information you can trust. You can log onto the Real Estate Institute of Western Australia (REIWA) website where you will find information such as market indicators, suburb profiles, price and rental data. Giving you a greater understanding of the current market in your subject area.

Take a long-term view

Property unlike other investments are to be considered over a longer-term. Property is renowned to be a stable investment however, don’t rely on prices to rise rapidly in a short period of time. As the longer you can afford to hold on and commit to the property the better.

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