Most Australians aspire to enter the world of property investment because it continues to deliver consistent returns compared to other investment options. Many investors also consider it the safest form of long-term investing. From our experience, property investors who are successful generally build a large portfolio over a number of years. Here are a few basic rules that they consistently follow:
Set your own property investment goals
After years of working with investors in Melbourne, we have discovered qualities that differentiate those who are successful from those who aren’t – and it all comes down to the right mindset. They all have the burning desire to achieve – whether that is to pay off their home; buy a property for their children; or just sure up their financial freedom in later life. They all understand that working hard and bringing in a regular income over the years may not necessarily build them wealth.
At Homebound, we understand the property market and have the financial strategies and professional team to help you on a way of building a successful investment portfolio.
Understand the power of borrowing
When it comes to property, the banks and other lenders are prepared to lend you a large portion of the purchase price for an investment property. This is why many investors favour property over other investments like shares, for example. The banks allow investors to leverage property up to 95%, so in some cases you may only need a 5% deposit. Shares on the other hand generally require the majority of the investment upfront. Borrowing can come with tax deductions which can make all the difference in making the investment work, so get the right advice from a professional.
We pride ourselves on our expert team of professionals including financial planners, accountants, builders and finance experts. By having the best people around us, we can help you with all aspects of property investment integral to your success, whilst always working solely for the interests of our investors.
Buy a property and build equity early
Investors aim to buy property with the plan to build value over the long term, known as capital growth. They also hope to cover the majority of expenses relating to that property with the rental income and tax offsets. When buying a property investors need to consider establishment costs such as stamp duty which can be up to 5% of the purchase price. To calculate your stamp duty, check out our stamp duty calculator Victoria. If you add further costs such as Lenders Mortgage Insurance which applies to loans that are more than 80% of the property’s value, the investment property could be in a negative equity position from the start.
Buying an investment property is one of the biggest purchases you will ever make yet most buyers don’t think to consult a professional. Considering most people spend more time researching a car than an investment property, you could improve your chances for success by working with our friendly team at HomeBound. We work everyday to find quality properties in Melbourne and its outer regions.
HomeBound – Your path to property investment starts here. Call 1300 747 427 or contact us today.