CONTRIBUTED BY ONE AGENCY THE MARTINS REAL ESTATE BAYSIDE
This property will pay for itself. One of many famous last lines made by people investing in real estate. This can actually be true, but there is a minefield to navigate to make it happen.
Property investment is totally different to buying a family home. Once you know your budget, your family home is bought with your HEART, with people placing their furniture in their minds when they make the decision. On the other hand, investment properties are all about cold, hard facts and asking the right questions before you buy.
Are you paying cash or borrowing? Are you borrowing against the equity in another property you own? Is the property already rented or will you need to find a tenant? Are you buying a property that you want to pay for itself, or do you want to build equity? In many cases, both can be achieved.
Whilst the rental market is brilliant at the moment, you need to ask yourself if the property is attractive enough to rent in the downtimes.
The most popular rental properties are three or four-bedroom homes, with two bathrooms and a double garage. A rumpus room is a plus for families, as is a good-sized outdoor entertainment area. Mothers are always happy with a dishwasher in the kitchen, and air conditioning and ceiling fans are a big plus.
You’ll need to ask yourself what you are likely to incur in maintenance costs. You don’t want to invest in a property where all the rental income is sucked up in maintenance costs. And while we are talking about costs, you need to consider your mortgage payments and whether you can handle any interest rate hikes, council rates and taxes, body corporate fees (if it’s a unit), insurance, and real estate property management fees to rent, inspect and collect rents for the property.
Appointing the right rental agent can ensure your property is regularly inspected and that rents are paid on time. They will also ensure that they place good tenants in your property.
Make sure you have allowed for a contingency in case the property is vacant at any time.
Holiday rental investment properties can also be very lucrative. We’ve had some of our clients who have self-managed their Air BnB/Booking.com properties and made a motza!
Whatever route you take, make sure you do your sums, or engage someone who can advise you so you have a clear picture of gross and net returns on your investment.
And finally, don’t forget to allow for capital gains tax in the event you sell the property and collect the equity you have built.
You don’t need to spend a fortune on your investment property. We have a brilliant turn-key investment property located up north on our books listed at offers over $259K. We also have a fabulous beach house listed north of Townsville that would be an ideal Air BnB/Booking.com property. It is one block from the beach and has its own pool, and is listed at offers over $770K.
Lorraine Martin and her husband Brian are principals/owners of ONE AGENCY The Martins Real Estate Bayside, located at the front of Capalaba Park Shopping Centre (near the Chemist Warehouse).
“Come in and ask us questions over a coffee,” said Lorraine. “We love chatting to locals and are happy to help with no obligation.”
This is not financial advice. Consult a qualified financial adviser for advice tailored to your situation.
