Are you looking to invest in property? Maybe cash in on your current Real Estate?
Australia is a country of homeowners. If we haven’t already bought a home, chances are we’re trying to find a way to buy one. Perhaps, it’s this familiarity with the real estate market that makes property a place many Australians choose to invest. But it’s important to know that buying an investment property is quite different from buying a home to live in. We’re here to walk you through a few of the things to consider when it comes to financing an investment property.
Over the last few decades, the values of some properties have often risen more than the rate of inflation. Some say property ownership is a national obsession, with affordability issues, house prices, and interest rate movements constantly in the news. Apart from a common general understanding of the market, there are other reasons people like to invest in property. Some common ones being the potential for capital growth (how much the property rises in value over time), return from rent, and tax benefits. Another plus is you don’t need to be a long-time investor with lots of funds on hand to start investing. If you already own a home that’s increased in value, you can potentially unlock this equity to help purchase another property.
Earning a return from property…There are two basic ways to get a return on your property investment:
- Capital Growth
- When you sell a property for more than you paid for it, that profit is called the ‘capital growth’. Usually places that enjoy more capital growth are in sought after locations, which might include proximity to the CBD, water, or areas enjoying a surge in population. However, capital growth in any area is not guaranteed.
- Rental Returns
- Income from rent is a more immediate return than capital growth. As long as someone is renting the property, their regular payments can help with funds towards your mortgage and property costs. When considering potential rental returns every suburb is different and it’s critical to do your own detailed research.
If you’re thinking about borrowing for a property investment, touch base with us here at Financia today on (08) 7070 2755.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
