Since the superannuation laws were amended to allow Australians to invest their super in rental properties, we have written a lot more home loans for investors in the Kwinana, Baldivis and Rockingham areas. Many neophyte investors ask us a variety of questions about getting started in investing. We would like to share some tips for getting off to a good start.
Your Investment Goal
We recommend using a financial planner for this but even if you don’t, make sure you have a solid “game plan” with reachable goals. How many properties do you want to buy? What is the time frame? Do you want your rental properties to be positively-geared or negatively-geared?
You must have a budget for every individual property, especially your first. Be sure to include all projected expenditures such as loan repayment, down payment, repairs, renovation, maintenance and property management. Then, get an accurate assessment of rental income to find out how your property will be geared. If the projected rental involves negative gearing, add the money coming out of your pocket to your monthly budget.
Research makes a huge difference. Find out how much rentals are going for in the neighbourhood of the property you are looking at. Ask around to find the right buyer’s agent and property manager. Get an idea of the quality of renter in the neighbourhood. Know what prices are being charged for comparable houses.
Inspections are Crucial
Make sure the home is inspected by a quality inspector who pays close attention to detail. Failure to do this can result in costly “surprises” when trying to rent the home out.
Find a great accountant to advise you on taxes. Whether your property is negatively or positively-geared, you must know the ramifications of every aspect of your purchase.
This is essential to protect your interests.
We strongly recommend getting a property manager instead of trying to do it yourself. Property managers keep your property maintained and keep vacancies to a minimum by choosing the right tenants. They are money well spent.
At Smartline Mortgage Brokers Rockingham, we offer credit products from 20 different lenders to find the right loan for your situation. Call 0408 912 244.