Property Investment Advice

Property investment is an interesting type of investment especially in today’s low interest environment in combination with Australia’s strong property market.

It’s true that property investment, if done well, provides many financial benefits.

Benefits generally include:

  • Potential for capital growth
  • Rental income
  • Tax benefits due to negative gearing

Be aware however. Property investment can be a risky business especially in case of unexpected interest rate rises. Investors may be enticed to take on larger commitments than they can actually bear which may lead to financial difficulties when interest rates increase.

Risks to consider include:

  • Stagnation or decline in market values
  • Increased interest rates
  • Problems with tenants or falling rents
  • Not being able to find a tenant
  • Higher than foreseen maintenance costs

If you are not willing or able to manage these risks, you should ask yourself if property investment is really something you want to get into. There are more, and less risky, ways to invest your money!

Also, to be successful it makes a lot of sense to speak to a property investment consultant. They can help you determine your investment goals and create a strategy to achieve these goals. A property investment consultant will help you to mitigate your investment risk and make sure that you buy well.

Buying an investment property involves more than getting a low home loan rate. It’s more important to look at the investment property itself. Will the property get you capital growth and rental income? Isn’t the property investment too risky? Does the property need a lot of maintenance? Is it located in a suburb where you’ll be able to get reliable tenants? What happens if you suddenly have to sell it because you loose your job?

There are different strategies to mitigate your risks. You could buy a property in a very popular suburb which means you can easily sell it when you go through financial lows. Or you could buy a couple of smaller properties in different locations, different price ranges or property styles (a house and a unit for example) to diversify your portfolio. A property investment consultant will help you to look at the different strategies.

If you’re thinking of buying an investment property, please get in touch. Our main goal is to help you set up the best property investment strategy possible.

The Money Store also has extensive experience in helping investors to set up tax effective financial arrangements, for example by investing through a SMSF.

Property Investment Risks | The Money Store