Investing in property can prove to be one of the best decisions you could have made, because of the high returns you can get over time. Although, investing in different properties can prove to be beneficial, there are some things you need to know before undertaking any investment. It is recommended that you seek the advice of a professional financial adviser who would be able to guide your investment decision. Advice for investment property hunting from a professional can prove to be very helpful, and it could end up saving you lots of money.
It is important to determine your goals before buying any property as this will play a huge role in determining the kind of property you would buy. You should find out if you are more concerned about the increase in value of investment properties through capital growth, or if you want to focus on rental yield from your investment. Normally capital growth is quite strong in properties found in capital cities and nearby areas, while rental returns are high in suburbs where capital growth is lower.
You also need to consider the type of investment you would prefer. It may be better to consider buying an apartment or unit since these tend to be more affordable and easier to maintain when compared to a freestanding house. However, houses normally benefit from the capital growth of the land on which they are built on. Therefore, you can evaluate the two possible options and consider what works best for you.
You may have the option of investing in an old house or in a new one. Although a new house can have a great market value and you may make a considerable amount of money from its sale, older houses also have an opportunity to improve in value after renovations. Therefore, you can buy an older house at a low cost, renovate it and sell it at a higher value while making a margin from the sale of the house.
Buying an investment property is usually a capital-intensive expenditure; hence, you may likely not have the money. In such cases you may need to take a loan. Taking the right kind of loan is very important, as it will determine your returns. So make sure you choose a loan that offers a range of options that can be useful to you as an investor. Such features could be a combination of fixed and variable rates and interest-only, or principal and interest loan. You can seek financial advice so as to settle on a suitable loan.
There are times when you may be unable to get a loan to buy a property. However, in such cases you should not give up. You can consider buying a property with family and friends. Although this investment can prove to be risky at times due to disagreements, or one partner going bankrupt, it can also prove to be a great way of pooling resources together and making a good investment. However, if you are not comfortable with the idea of investing with a partner, you can make use of your home equity, if you already own a home. Home equity is the difference between the market value of your home and mortgage payments. Therefore, if you have owned the home for some time, you may have enough equity, and so you will not need to make a deposit for the purchase.