LOOKING TO INVEST IN PROPERTY?
- Written by Melanie Toye, April 27, 2013
Is this you? You already have a mortgage and are thinking about investing in a second property.
If yes, the first step would be beneficial if you met with our friendly and professional Mortgage Managers to review your individual circumstance and provide you with the options to make your dream happen.
Already having a property can be an advantage, as the equity from your property can be used as a deposit for your investment property. If you have proven with your current mortgage that you are a good payer on the mortgage (i.e. pay on time without default, this will also help your argument in gaining a second property to your portfolio.)
The other point to note is the location of your second property. Some investors prefer to live in close proximity of the property investment for ease of maintenance and to keep an eye on the place. Whereas some investors are happy to invest interstate and sometimes overseas. Although it is noted, to always visit the property prior to purchasing it. The further away the property is, can equate to higher expenses such as flights to the destination for an emergency.
When looking to invest, look in high demanding areas. This will ensure top dollar rent is paid and short waiting periods from one tenant to the next. Also an investment property on the beach for use as a holiday home, may not work for your situation if you need continual turnover of rent. With low season periods, you would have to prove that you could have the financial back-up to cover the slow times.
When looking to purchase an investment you have to determine what you want out of the investment. Are you looking to hold onto it for the rest of your life to pass onto the next generation or after five or so years hope for a peak in the market and sell, sell, sell for the capital gains? It is also a good idea to consider the return on investment. In the long term will you have spent more on the investment than received in return in income? Again this depends on if you want your property to be negatively geared or positively geared.
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