When purchasing real estate, knowledge is key. To be a good property investor, you need to have a thorough understanding of the market. This is essential in order to make intelligent and profitable business decisions. By using our thorough 6 Step process, you can ensure you are making sound and lucrative investment decisions.
In this article, we will reveal the 6 key steps to boost your investment portfolio.
6 Things Every Property Investor Should Know When Purchasing Real Estate
Step 1. Know your strategy
Buying a house is one of the biggest financial decisions we will ever make in our lives so you’d be forgiven if you were feeling a little overwhelmed by the whole process. There are a number of things you should know before placing an offer on a place in order to ensure you are making a wise purchasing decision. We would recommend to do your research and to have a good grasp on your parameters – location, price, property type, target market, target yield and your ultimate goal.
To help you map out your plan of attack, have a look at this article entitled 9 Things You Need To Know Before Signing.
Step 2. Capital Growth vs Rental Return
It’s safe to say that the success of your property investment will rely heavily on two major factors; capital growth and rental return. A consistent & reliable rental return will pay off in the short term while the capital growth is ultimately the longer term goal. So, you need to do some number crunching and discover for yourself, what is most important? To find out how to ensure rental return makes your property more fruitful have a look at this article.
Step 3. Don’t judge a book by its cover
Have you ever attended an open for inspection where all you can recall in your mind is the hideous furniture or brightly coloured featured walls? What about the overgrown garden in desperate need of attention? Not to mention the dirty dishes, wet dog smell, resident fleas in the carpet and cockroaches the size of your big toe. Any of this sound familiar? It’s very easy to let these factors make you want to reach for the car keys and escape out the back door. But remind yourself, all of these ‘ugly’ factors are just aesthetically unappealing. They don’t cost very much to fix and with a bit of elbow grease and TLC you can absolutely transform the property within a matter of days. The great thing is it means you could find yourself buying the property for a really great price. So fight your instinct to flee (mind the pun) and proceed with an open mind. Ask yourself, does this property have good potential? And what could I do to transform it into a good investment?
Step 4. Tenancy Selection
As property investors, we want to ensure that our property is leased efficiently and for the highest possible return. Good tenants are a precious commodity. They pay their rent on time, they look after your property and they stick around for a long period of time. But as their situations change, even good tenants (unfortunately) have to move on. There are three key things you can do in order to give your property the best fighting chance of securing premium return, read about them here.
Step 5. Claiming Tax Depreciation
What is tax depreciation and how can you claim it as a property investor? Well, firstly we need to fully understand what depreciation actually is in order to know what we can claim. Our friends at BMT Tax Depreciation have lent a helping hand to share their expert knowledge. BMT defines depreciation as “a deduction the owners of any income producing property can claim. This is related to the wear and tear which occurs to the building structure and the plant and equipment assets contained.” To discover the Top 5 Things you need to know about Tax Depreciation read this article.
Step 6. Choose Your Property Manager Wisely
As a property investor, in order to maximise the return it’s imperative that your property is being well managed. Choosing the wrong agency to manage your investment property could end in disaster. High rental arrears, poorly managed property maintenance and prolonged vacancy rates will drastically hurt your bottom dollar. To discover the 18 key steps to choosing the best property management agency for your investment property click here. We also reveal how to find the best property manager for your investment here.
Did you find this article about property investing helpful? Here are some other articles about landlords, investing and purchasing property that other readers have found helpful :
- 5 Things You Need To Know When Claiming Tax Depreciation On Your Property
- Insider Advice To A Quick Tenancy Turnaround
- How To Choose The Right Landlord Insurance For You
- How To Buy At Auction. 14 Things You Need To Know.
- Top 8 Stress-free Property Management Tips For Landlords
If you have a property in Brisbane that you would like to speak to a professional Real Estate Agent about buying or selling, please feel free to contact The Justin Hagen Team at Calibre Real Estate on 0401 856 161 or to search properties currently for sale then visit the Search Properties page on our website.