Buying an investment property can be financially rewarding, allowing you to live a more comfortable lifestyle and retire earlier.
While that alone is enticing for upcoming investors, property investing can still get tricky as not all real estate is projected to go up in value. Multiple factors can easily affect the financial direction of your property investment.
To help you choose the right property to invest in, here are 8 Tips to Consider When Investing in Property in Newcastle.
1. Choosing the Right Property at the Right Place at the Right Price
Capital growth is the obvious goal when investing in property. To attain this, it's essential to choose the right property at the right place in the correct location.
The increase in value depends on the location of the property. Like basic economics, sought for properties in specific locations increase in value due to the demand. Areas that are not as desired won't grow in property value as much as those that are "commercial" or those that are longed for.
Price is also relevant as some properties could already have reached their maximum valuation. Looking at the price and projected future valuation will give you a good idea of how valuable a property investment is.
2. Cash Flow is Always Key
Property investments are long-term. In most cases, it takes many years to pay for properties fully. While it can be considered a key to long term wealth, it is also essential to consider the costs and the individual financial capacity.
When looking to purchase a property, it's crucial to take into careful consideration the mortgage plan. It's vital to make sure that you can afford to maintain your mortgage repayment over time and make allowance for repairs, maintenance and improvements to the property over time.
3, Pick the Right Mortgage to Suit You
Speaking of mortgages, another tip is to choose the right mortgage plan for you. Even if the property is a great deal, if you cannot meet the financing needs for the mortgage, it will prove to be a liability.
Before purchasing or investing in a property, see to it that you discuss this matter with an expert to get sound advice on the mortgage plans. This can make a significant impact on your financial well-being. We regularly work with Nick Ball from Invoyt Finance, who is more than happy to help and chat about your individual needs to ascertain the right mortgage to suit your needs. Nick can be contacted on 0407544649 or nickb@inovayt.com.au
4. Understand the Market and the Dynamics Where You are Buying
Like in the fundamental law of supply and demand, areas that are "wanted" or "in demand" tend to have a more significant investment. Have a good look at the area you are planning to invest in and look around for other options.
For better insights, you can consult with us to keep updated on the current market. We are happy to provide an unbiased rental appraisal on any property you are considering purchasing. Contact Casey Healey, our director anytime on 0425257003 or casey@c21newcastle.com.au
5. Use the Equity From Another Property
Tap into the assets that you currently have. Leveraging the equity in your home or equity from another property can be an effective way to buy an investment property.
To calculate your home loan equity, take your property's current market value and subtract the remaining loan balance. For example, if your home is worth $700,000 and there is $300,000 remaining on your home loan, you have home equity worth $400,000
6. Make the Property Attractive to Tenants
Part of making the most out of your investment is being able to sell it to tenants. It's good practice to highlight the property's features to make it more attractive. Examples of ways you can make it attractive are taking good photos/videos of the property and showcasing it in a good spotlight.
Making your property attractive attracts the right tenant. Better quality tenants lean on well-presented and maintained properties. The last thing you would want is a bad tenant.
7. Take a Long-Term View and Manage Your Risks
Just like any investments, assessing the risk factors attributed to your property is essential. This will help you manage risks that may arise in the future.
With properties being a long-term investment, it's advisable to not rely on property prices to rise straight away. Some properties take time to reach their potential, so keep that in mind and assess the risks to manage the investment better.
8. Find a Good Property Manager and Let Them Do Their Job
Managing a property is a full-time job and one best left to the professionals. If possible, don't overload yourself or risk essential tasks falling by the wayside - hire an experienced property manager who can take the reins for you. Remember, a good property manager will make you money on your investment and is an impartial party who can ensure the health of your valuable asset.
If you're searching for an award-winning Property Manager for your investment property, our Century 21 Newcastle team can assist. Not only do we leverage technology to obtain our clients the best possible results, but we're backed by a strong marketing strategy and a dedicated team that exceeds expectations. For a free copy of our Property Investors Guide or for an obligation-free chat, email our Director, Casey Healey at casey@c21newcastle.com.au or phone 02 4928 7400 today.