What do I need to do to get started?
Book a time to come into our office and we will speak to you about the process. We will discuss your ability to purchase, costs associated with investing, affordability, other professionals you will need along the way, available areas and properties, funding your purchase, timeframes and many other practical things.
Can I afford it?
In your initial meeting we will look at how much you need to put towards a purchase and if that is to come from savings or equity in an existing property. We will also look at serviceability for financing the property.
What will it cost me?
We will give you figures on how much money you will need to put towards your property a week, taking into account rental income and if you are claiming a tax variation. We will show you the ”out of pocket” expenses before and after claiming the tax variation and explain what is involved in this procedure. We will also give you benchmark interest rates so you know what your repayments will be if rates go up in the future.
Why wouldn’t I just put my money into my super or shares?
Both of these are sound options, essentially both being investments in the same market, as most superannuation funds invest predominantly in shares. By also investing in property, you are not “putting all your eggs in the one basket” and are providing yourself with a more balanced portfolio with another form of income stream.
What if I can’t get a tenant?
Our benchmarks require our properties to be in areas that will increase the chances of owners being able to tenant their property. They are situated in areas that are attractive to families, with strong employment and infrastructure within the immediate vicinity or surrounding areas . Your property manager will discuss with you the two key factors of renting out your property being price and presentation.
What if I get a bad tenant?
The secret to managing an investment property is having a professional do it for you. A property manager will cost a percentage of your rental income, but with the right property manager, it is money well spent. They vet the tenants, deal with them on a regular basis, and carry out routine inspections, only contacting you if they need your input for something. We will also put you in touch with an insurance broker to make sure you have the correct type of insurance for your property. They will make sure you have the option to be covered for rental default, malicious damage and contents, as well as landlord’s insurance. This will not only protect your asset, but also your cashflow.
Should my finance be variable or fixed?
Although this is a personal decision that you will make, we will take you through the pros and cons of both scenarios. We will look at how long you want to fix for and discuss what impact it will have on you if rates change. We can also talk to you about the option to split your loan.
How should I set my banking up?
We will structure your loans and bank accounts so you are making optimum savings on your personal debt and your investment debt is working for you as well. Once your property is settled and a tenant secured, you should be in a position to “ set and forget” with all key bank accounts having the correct amount of funds in them at all times.
When can I buy again?
This depends on personal circumstances, income and how comfortable you are with investing. We have many clients that purchase every two to three years. We also have clients on either end of the scale. Some have left it late in life to start investing and purchase one property, others start when they are younger and invest on a yearly basis. Every situation is different and part of our service is to show you what you can do in your particular circumstances.
How long should I keep the property?
This is a question that we will not only address during the initial stages of purchasing but also further along the road in your financial journey. Property investment is a long term commitment, so the short answer is usually hold it for as long as possible. There are different scenarios that we can discuss with you, depending on your personal circumstances and what benefits you hope to achieve from holding the property. You may be looking at it as a tax benefit and want to sell and buy new in ten years. You may want to hold on to all properties until you retire to reduce capital gains. Or you may want to sell a couple of properties and pay down your debt, while still holding a couple to receive rental income.
Along your property journey, you will likely have need for the following professionals:
- Mortgage Brokers
- Financial Planners
- Architectural Designers and Planners
- Pest Inspectors
- Building Inspectors
- Property Managers
- Insurance brokers
- Quantity surveyors
We can put you in touch with people that we have had experience with and that we have recognised as being quality professionals.