I want positive cash flow and capital growth in my property. Can I buy in an area that gives me both?
The good news is – you can have both! The best way to achieve this is to have a "buy and hold" strategy. Alternatively, there are dual occupancy and dual income properties being built in several areas around Australia. These properties offer positive cash flow as well as capital growth but be aware that the cash flow and capital growth may not occur simultaneously. It is important to mention that your accountant needs to have input here to ensure that you are employing the most tax effective strategy for your personal circumstance.
Where is the best place to buy an investment property?
It is important to understand the property markets and how they are performing around the country. The API Solutions team use the expertise of reputable researchers and analysts to ensure that the information offered to you is reliable. This allows you to make informed decisions when it comes to knowing where to buy an investment property.
Is it better to buy a house or an apartment?
The answer is simple. It depends on the market and demographics of an area. It is essential to understand the market needs in an area to avoid making a costly error. The API Solutions team will explain the demographics of a particular area and whether a house or apartment would be a suitable investment.
Should I buy a new property or an older property?
Buying new property has several distinct advantages: Reduced maintenance costs, Lower vacancy rates (people prefer to rent new properties), Higher tax deductions through depreciation of fixtures, fittings and the building API Solutions offers discounted Depreciation Schedules to their clients
Can I buy more than one investment property at a time?
It may well be possible. You would need to meet a specialist mortgage broker to “crunch your numbers” and see how much you can borrow to buy your investment properties. API Solutions can help connect you with a specialist mortgage broker.
How do I start to invest in property?
The first step, once you have made the decision to invest, is to know who can best assist you with the process. You will need a mortgage broker who can advise you on various finance options as well as an accountant who can advise you on the best structure for your circumstance. You will also need an investment property adviser who is also an experienced investor and can provide current information on the property markets around the country. To transact the sale, you will need a solicitor/conveyancer.
Is my accountant able to advise me once I have purchased an investment property?
Many accountants are great with tax advice and preparing your annual tax return. Once you have bought an investment property it is very important that you have an accountant who understands your financial goals and my advice is to choose one that invests in property themselves.
Where do I buy an investment property?
This is a crucial question as most people do not examine the property markets on a regular basis and can take advice from unreliable sources such as their next door neighbour, the local taxi driver or the weekend newspaper. People are usually well meaning but my best advice is to take your advice from an experienced property investment professional who spends all their time researching and understanding the property markets as well as investing in those markets themselves. The best locations to invest change all the time depending on many market factors so it is important to work with the professionals to get the best advice.
Should my strategy be to “buy and hold” an investment property?
This is a very important point as you need to have a strategy before you make your investment purchase. If your strategy is to buy and hold onto the property for the long term to realize capital growth, then it is a matter of knowing that you can service the loan for the long term. Here’s where fixed interest rates come in handy as you know the cost of your repayment for the term of the fixed loan. The strategy to buy and flick (onsell the property quickly and make a fast gain) is popular in a hot or booming property market and much money can be made. There is no right or wrong strategy.
What are the pitfalls of buying a property “off the plan”?
Buying a property off the plan can work well for the investor when the market is rising. It can also be a great strategy for the first time investor as it gives more time to save more money before the property comes up for settlement. There can potentially be a capital gain made whilst the property is under construction.
A word of caution though, many investors have been caught out when they have bought a property at the “top” of the market and by the time the property is completed, the market has changed, leaving them with an asset that is not worth what they initially paid for it. To avoid this situation, it is crucial to work with a professional who understands the property cycles and markets.
Should I buy in my Super fund?
It is crucial to get the right advice when it comes to investing in your Super fund. Always seek the advice of an accountant or financial planner who is experienced and licensed to provide you with Superannuation advice. This may be suitable for you but you will need to understand the pros and cons (after being properly advised) before making your decision.
How much money can I borrow?
The amount depends on how much you earn from wages and income from other sources. The amount you are able to borrow can be calculated quickly by a mortgage broker or lender.
Is it better to go to the bank for a loan or to use a mortgage broker?
Many people have only had dealings with a bank but there is wisdom in seeking advice from a recommended mortgage broker as their business is based on selecting for you the best available finance product to suit your needs. If you go to the bank, they only have their own product to offer you. My advice is to let the mortgage broker do all the work for you.
I already own property so can I use the equity from my existing property?
You certainly can use equity from your existing property to purchase more property. In fact, this is a very good way of building a property portfolio.