The great Aussie dream has for decades been that of buying a family home with a white picket fence. This dream is now being superseded with the popular goal of buying multiple properties. But, where do you invest your hard-earned money? What city is going to give you the best return on investment?
Tim McIntyre from news.com.au recently wrote,“Property doom and gloom is upon us as markets cool around the nation, but this city [Brisbane] is offering growth potential and plenty of tenants for investors.”
The Affordable Property Guide for the first half of 2018 from PRD name Brisbane as the country’s most affordable and livable city, due to slow growth in purchase prices and rents. They state, “Brisbane proves to be the most affordable and livable capital city, with the average livable cost of only 5%.”
But, let the buyer beware. It is crucial you do your research to ensure you are buying property in a growth area, a property that will offer the best return. A Property Management Strategy should be considered. To ensure you are making the best decisions when investing in the Brisbane property market, your strategy should include:
- Research the Best Locations in Brisbane Property Investment: In comparison with Melbourne and Sydney, Brisbane is currently touted to be the best choice for property investors by some financial and property advisors. Thorough research of the Brisbane region must be carried out to determine the best performing suburb and the types of property available.
Recently, Sasha Karen from Smart Property Investment reported “Overall, metro Brisbane was in demand and price growth was positive. With a rise in demand of 16.6 per cent and a median price rise of 5.65 per cent to $556,000, the eastern region of Brisbane was the highest in demand and saw the biggest median price growth.”
- Establish a Strong Foundation: With property investment there are risks, but with a strong foundation and a good strategy and planning these risks can be minimised. Ensure to assess your savings, establish a solid income stream and speak with a financial advisor to discuss your property investment goals. A financial advisor will take the time to understand your goals, objectives and risk profile.
- Know Your Investment Ability: Once you have assessed your financial status, the next step is to review your investment potential. How much money can you borrow? How much will the property cost? What are the added costs when purchasing a property?
ASIC’s Money Smart website states “Some of the costs involved with property investment include: stamp duty, conveyancing fees, search fees, legal costs, and pest and building reports.If you borrowed to invest, you will also have mortgage repayments, and if your investment is positively geared you may pay tax on your rental income.”
- Get Good Advice: It is imperative that you get good independent advice before investing. A professional property adviser, Brisbane will use their experience and knowledge to help you find the right investment property to meet your financial status, lifestyle, portfolio and long-term investment goals.
- Research Investment Properties: In Brisbane, you will come across a variety of property options meeting your requirements. Researching the region, the infrastructure, and demographics will help you get the perfect property. For first-time property investors, you may want to start small perhaps a unit or duplex to dip your toe in the water. Speak to real estate agents, visit properties, and examine the rental income for that type of property in that area.
- Consult A Mortgage Broker: “A mortgage broker is a type of financial adviser who specialises in helping people find a home loan. After the selection of a home loan, the right mortgage broker can also manage the application process for you and provide tailored advice along the way, helping you secure the home loan.” Justine Davies.
If you are going to use a mortgage broker do your homework. Find out what the banks are currently offering so you know if they are giving you the best deal. Ask the broker questions, find out which lenders they deal with and what commissions they will be paid.
Ultimately, make sure the broker knows your financial situation and understands your borrowing needs.
- Reap the Tax Benefits: While owning an investment property has its risks it can also offer excellent tax benefits. As a landlord, you claim a wide range of tax deductions from the expenses related to your rental property including the interest on the loan of your tenanted property. Your financial or tax adviser is best suited to advise you what you can claim.
If you are considering investing in the Brisbane property market, then seek advice from a local financial advisor who can prepare your property management strategy.
Brisbane may be “hot” now but the long-term prospects in Melbourne are likely to be much better. Melbourne has been widely forecast to become Australia’s largest city by population. Like elsewhere in the world, the bigger the city the higher the demand for property and the higher the prices rise.
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