Purchasing a residential real estate investment offers many benefits, so it’s unsurprising that it has become a popular way of building wealth for many Australians.
However for those branching out into property investment for the first time, it can seem like a hard world to break into. There are many tips and tricks for buying your first investment property, but the main point to remember is to prepare as best you can. With the help of an expert real estate agent coupled with your own research skills and preparation, you can ensure you’re making the right decision for your portfolio.
Refinance to access equity
If you’re currently a home owner and have been for some time, did you know you could use your equity to purchase another property? By refinancing your home loan, you can access equity already built in your mortgage to cover the costs of a deposit, making the purchase simple and quick.
Instead of saving up for months on end to pay the deposit for a rental property, you can use money you already have to make a timely move and take advantage of the market.
Think new and off the plan
One of the perks of buying properties off the plan is that only the deposit is due at the time of sale. The remainder of the balance is paid upon the completion of the home, unit or apartment, giving you ample time to get your ‘loan finance in order. As these properties are brand new, some state governments provide concessions and grants towards the purchase of off-the-plan property, helping to reduce the amount paid for the home. For example, investors in New South Wales can access up to $5,000 for the construction of a brand new home under $650,000.
Research the market and the property
Research is one of the most important tools you have to ensure you’re making a wise investment. One of the biggest mistakes an investor can make is to not perform their due diligence for a property, potentially resulting in large losses in the long run.
Due diligence covers everything from the structural integrity of a building to the yields that it can bring as an investment. Consult with a real estate agent to determine weekly median rent figures, potential gains and expenses associated with the property. Strata fees are one expense that buyers of apartments and units needs to keep an eye out for, as this figure could be the one thing to make or break your decision to buy a high- or medium-density dwelling.