Looking for a Property for Sale?
Before starting your search for a
property for sale, there are several things to consider. While buying a family home may be an emotional investment, a home investment on the other hand must take other factors into consideration such as the capital gains potential and the amount of rental income the property investment will make. Before you start looking, here are five questions you should ask.
Price - what is your budget?
Setting a budget you can stick to through several interest rate increases is the foundation of your property search. As a general rule, your mortgage repayments should not exceed 30 percent of your gross income. Your budget must include saving for a deposit as well as upfront costs such as stamp duty, conveyancing, mortgage insurance (if applicable) and other expenses. You also need to factor in the ongoing costs of the property associated with home investments such as house and contents insurance, repairs and maintenance, water rates, and for some, strata levies and land rates.
Location - where do you want to live?
The next step of your search is deciding where you want to buy the
property investment. This may be restricted by the budget that you set. It is important to research the capital growth potential of the property, the rent attracted by similar properties in the area and gross yields. The social demographics for a house are usually families or couples so regardless of the area your property is located, it should be in close proximity to shopping centres, public transport, hospitals, good schools and cafes and restaurants. Houses with large bedrooms, big backyards and swimming pools may also prove popular to tenants.
Timing – do you want to buy a property off plan or buy an existing property?
The timing of your property purchase may depend on whether you want to buy an existing
home for sale or buy a new property off the plan. There are many advantages to buying a new property investment. One of the major drawcards for buying a new property off the plan is that there are considerable tax benefits. A new property’s fixtures and fittings will attract more depreciation than an existing property. With a delayed settlement, your investment property may increase its value before final settlement.
What are you looking for – an apartment or house and land package?
You also need to decide whether to buy an apartment or house and land package. A home on the other hand may be a more expensive purchase but traditionally attracts more capital gains because of the land content but you will be subject to land tax and other fees. Apartments are generally cheaper than houses and usually provide a higher rate of depreciation than houses or existing buildings but you will have less control over your investment as the ownership of an apartment will be governed by a body corporate and you will have to pay strata fees every quarter.
Tax breaks - what are the tax advantages of buying a home?
One of the major advantages for buying a new property is that there are considerable tax benefits and a new property will provide a higher rate of depreciation. Any legitimate expense incurred in running your investment property should also be tax deductible against your overall income. If you own an
investment property, you may be able to deduct capital works deductions which apply to the period your property is rented or is available for rent and are generally spread over a period of 25 or 40 years.
Find Investment Property has listings for some of the best properties for sale currently available so start searching to find your next property deal and add a home investment to your investment portfolio.
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