New to property investment? Here’s everything you need to know about investing in Australia. Getting the right property, evaluating potential returns and more.
If you’re a novice in the property market, it’s crucial to be aware of both the benefits and the potential pitfalls of investing. It’s all about making smart investments, and to do that, you need to understand the market, evaluate potential returns, select the right property, and have appropriate risk mitigation strategies in place.
The real estate market is heavily influenced by the forces of supply and demand. When demand outstrips supply, as is the case in Australia’s current housing supply crisis, prices can rise significantly.
Factors that influence property demand include:
Australian property prices have a long-term record of capital growth stretching back more than three decades.
Key real estate terms and concepts that you need to understand as a potential investor include:
When deciding which property to buy, it’s important to compare them and evaluate the potential return that each one will provide. The higher your rental yield, the better.
You should also assess the potential for capital growth by looking at both historical and current market trends in different locations. Some locations will provide you with both better capital growth and rental yield potential than others.
You should also consider the potential tax benefits when evaluating your potential returns. Unlike owner-occupier properties, expenses associated with investment properties are tax deductible and newly built properties will provide higher tax benefits when compared with older homes.
Different types of residential investment properties you can buy in the Australian real estate market include houses, townhouses and apartments. In addition, there are also multi-rental income solutions like dual-income and duplex properties available that can supercharge your investment return.
Ultimately, the right property for you depends on your investment needs and goals, as well as your investment budget. Here are some tips to help you select the right property.
For example, are you looking to maximise your:
Some locations will provide you with better capital growth and higher rental yield potential than others.
This includes determining your borrowing power so you can work out which properties you can afford. Your borrowing power will depend on factors such as your income and the loan repayments you can afford to make. It’s worthwhile speaking to a finance professional.
This is the most crucial part, and once again, it’s best to get professional advice on suitable properties and locations to achieve your investment goals.
Risks associated with investing in the property market include:
However, you can also eliminate all these risks by getting professional advice before you invest.
Our expert team at DPN can help you with all aspects of property finance, investment and ongoing management.
Contact us today to find out more!
Even if you’re a beginner in the real estate market, you can reap the benefits and avoid the potential pitfalls by:
Buying an investment property can be a seamless and stress-free experience. Follow this 8 step process to start your journey toward financial independence.