Navigating the real estate questions can quickly turn into a tedious affair. There is no end to what you can and cannot do whether you buy into a real estate development syndicate or an off the plan building package, repairing or renovating or are still in the research mode, the most important thing you need is a clear picture of the real estate scenario in Australia. This is why we have put together a quick guide to the top ten most essential things every Australian should know about investing in a real estate property.

Set a goal

Real estate is all about investment and the capital growth that comes with it. Be clear on what you want to achieve with your investment. Having an objective lets you round back to it when making important decisions throughout the process. Whether its tax benefits, earning a rental income or holding a property long term, be sure of what you ultimately want out of it. Investors have a unique opportunity with real estate in that it is difficult to value and can be bought at a price lower than the market value. Many buyers make the mistake of choosing a property based on the tax deductions they’ll be eligible for. Instead, having an objective of making the right investment choice is a better start. Do not rule out the type of property that can boost your capital growth potential. Residential property can be a home unit, house or a plot of land. Depending on the demand and supply in a particular area, a plot of land can well exceed a house.

Set a budget

A budget gives you the extra clarity you need when vetting opportunities and options. Buying property involves a host of costs that can quickly add up. Make sure you take these into consideration when looking at your options. For instance, not many first time buyers count the Stamp Duty when calculating costs and end up having to arrange thousands of dollars in the last minute. The stamp duty is collected upfront at a rate of 2-3% on the purchase price. The amount, however, depends on the state you are purchasing your property in. This is just one of the many costs you should expect paying when you buy a brand new property.

Take ongoing costs into consideration

When you buy investment property is a tested path to long-term wealth growth. However, maintaining a property has its own drawbacks that provide medium to long-term returns. Depending on the investment you may have to shell out ongoing costs. Make sure you budget in a way that you feel confident in repaying your mortgage in the long run. You don’t want to have to offload your property due to financing woes. On owning the property you’ll be maintaining it as well as repaying your loan. However, things will get easier in the medium to long term as you earn a rental income and benefit from tax deductions. Plus, rent does increase with time making it easier to maintain your property. Ongoing costs like interest, land tax and insurance are a staple when you own a property.

Choose locations with potential

One major factor to help you make the most of your investment is the location your buy-in. Choose an area that has a potential to grow. Consult with an investment expert to help you shortlist all such locations with a market potential and that fit within your budget.

Keep an eye on the market

Your ultimate objective should depend on the ebb and flow of the market. Whether you’re looking for property investment in Sydney offers or to buy off the plan property in an upcoming location, even the smallest of factors matter. For instance, one side of a street may have a higher demand and thus more rewarding in term of capital growth. The best way to find this out is to inquire with a lot of real estate agents and investment advisors. Circle down on an advisor you can trust and can tune you into inside information about various real estate quirks in the area.

Improve your property

Having a well-maintained property will help attract quality tenants in no time. Repairing a property doesn’t have to be an expensive endeavor. Focus on getting the basics rights. Having a well-presented kitchen and bathroom can be a game changer. There are many ways to improve the value of your property. Plan your investment not just on buying but making improvements that can fetch you extra rental income. This adds a lot more value to your home and ultimately pays off whether as a return on investment or ongoing rental.

Drop the luxury option

The property market has a reputation for throwing off even the most seasoned investors. So when you’re buying property as an investment, stay away from luxury properties which become a lot harder to sell in the event of a slow market. You should want to invest in property as a long-term investment. In case of property investments, the longer you hold it the better and while you build your equity you could start considering a second property as well. However, managing risks and maintaining a healthy financial stability should be a complementary goal when doing so.

Negative gearing

On the surface, negative gearing can seem like a good option and the easiest way to earn more on lesser investment. When interest rates increase, it could quickly become a liability instead of the profits you were expecting. Always consult your investment advisor before considering such a move.

Invest in a building inspection

An essential step while buying a property is buying one that doesn’t need deep repairs. Having a building inspection done can save you a lot of headaches. Cosmetic repairs are all you should ideally be expecting to do when buying a property.

Still paying your home loan?

The point of an investment is to help you earn ongoing returns. There is nothing that stops homeowners still paying their debt from investing in a new property. This is your call and you need to be confident about the debt you owe. The lower the debt the better it is, always. Get in touch with Richman Property Investors for your investment property needs. We specialize in property research, strategy and advisory, group buying, syndicate development and more and can help you make the right decisions when investing. If you’re looking for a deeper foray into investment then we offer one on one investment mentoring as well. Get in touch with us for a free consultation today.