Many seem to think that they can just buy a house, any house, and it will automatically go up and they'll make money.
In most cases, in recent years anyway, they're right - just the mere act of buying a property puts you on the road to making significant capital gain (if you hold onto it for long enough).
However, there are other aspects of property investment that really need to be investigated before buying.
Sure, any monkey can make money in a rising market.
But why be just satisfied with a profit in the distant future when with a bit of clever thinking and good advice from an expert, you can make money from day one? How, I hear you ask? Well, if you talked to your accountant (or us) you'd discover very quickly that if you buy a certain type of property and understand the government tax laws, you can make significant savings every week through the power of negative gearing and depreciation allowances.
So, to help you out, here are the top three things to look for when buying an investment property: 1.
Capital Growth: you want to buy in an area where the value is going to go up.
To do this, you really need to know the area well so that you buy the right kind of house, on the right street and in the right pocket within that area.
Buy a new property: Buying new or nearly new (often called 'off the plan') means you generally avoid paying stamp duty.
Considering this could be over $20,000 it's a saving that makes a real difference to your back pocket.
To cap it off, because it's a new property, you get large tax deductions on things like ovens, carpets and other items.
When you buy an established property not only do you pay the full stamp duty fee but it's difficult to find any depreciable items as everything in the house is too old.
Buy a property that appeals to renters: It really pays to understand what renters are looking for in a property so that you can be assured your mortgage will be covered.
Buying a property and realising later it's not suitable for renters (or buying in an area that renters don't want) can cause severe financial pressure.
Buying an investment property is a big outlay so do your research before you buy.
If you don't understand the taxation implications, you're probably missing out on a large chunk of cash that could be yours for the taking, every week.
Seek out an expert before you buy and watch your investment flourish.