During the past three years, the proverbial anxiety-inducing horn of the recession has been blown countless times, not without just cause, yet driving property investment even further down than before. However, investments are the fuel of every economy and those looking to invest in a second or third piece of property in Australia are not as few as one might think. In a recent story reported by News.com.au the $1 billion Jewel resort project in Surfers Paradise was finally cleared by Queensland Deputy Premier Jeff Seeney. Seeney’s statements stressed the importance of this development project as an indicator that “the future looks much brighter now than it did 12 months ago.” As such, perhaps the time has come to infuse the prospect of property investment with a heftier dose of optimism than before. If you’re looking to invest, here are the three basic tips you should bear in mind prior to making that investment proper.
First off, one’s mindset is vital when deciding on the precise property to invest in. Any potential player on the real estate scene should bear in mind that they are not looking for a home to live in, but one they ought to have an easy time reselling. As such, it’s not always the best appointed home, with the latest furbishes and finishes that ought to draw your attention. Attempt to find a comfortable average between a well-positioned residential piece of property and one that requires some investment to bring up to spic-and-span conditions. Most often than not, this will bring you the most bang for your buck, as your initial investment won’t be as high as with a home in mint condition, whereas the area and positioning will make it an easy sell. Once you’ve identified the type of credit your investment requires, you can take out an online home loan, all the while paying close attention to the variable and comparison rates offered by your provider of choice. Standard rates, as exemplified by BankWest.com.au (http://www.bankwest.com.au/personal/home-loans/home-loans-overview#investing-in-property) are around 5.77& p.a. on the variable rate and 5.82% on the comparison rate.
If you’re looking to invest in a buy-to-rent home the situation is slightly different. You’ll need to make taxation conditions and location your top priorities. Location in this particular case refers to the potential for development in a particular neighborhood, area or suburb. Not only do you want your future property to have schools, supermarkets, parks, healthcare facilities and other such amenities close by, but, by all means, you do not want to invest in an area that’s on a downward slope. A neighborhood in which housing prices are falling means that there is no demand in the area, that inhabitants are possibly moving away and that, in turn, local businesses will be forced to either follow or close down. And you definitely don’t want to own property in an area undergoing abandonment, no matter how low the prices there.
Last, but not least, taxation is a priority in all scenarios, but especially if you’re buying to rent. To put it simply, if you’re making more money than you’re investing into repaying your loan interest and other fees, you will have to pay more tax. Conversely, if your gain is lower than your investment, you might be eligible for tax deductions, if you apply for offsetting the loss through your other sources of income. Generally speaking, the more your property is worth, the more tax you’ll have to pay-either when renting or when you decide to sell. All in all, however, with the overall improvement in investment prospects, the real estate industry might slowly be on its way to that long-awaited recovery. If and when that happens, you will want to be there.