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10 Things You Need To Tick Off Before You Buy an Investment Property

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When you are in a situation where you are able to put money into an investment property, it’s an extremely exciting time. But if not thought out properly, such an investment could actually push you into financial stress which could lead to mental distress as well. To help you out, here is a quick list of 10 things presented by Deppro Qld that you need to do before and during the purchase of property investment.

  1. Plan well: This is so obvious that it shouldn’t be on this list at all. But lack of planning can cause are series of losses you want to avoid. Things like the location you’re looking to buy at, how much you can afford to spend, who will manage your property, loan implications, property tax depreciation etc need to be well thought out.

 

  1. Consult experts: The first set of people we talk to are our friends and family in the process of decision making. We all like to be able to find someone who has their own investment property. But in order to ensure that your investment property actually provides good returns, you need to take the advice of experts like Deppro Qld.

 

  1. Insure yourself: Assuming that you would need a loan when buying your property, make sure that you have insurance coverage so that your family is not thrown into the deep end if something happens to you.

 

  1. Think like an investor: When it is time to choose your property, try putting yourself in the shoes of the person who would rent it from you.

 

  1. Do your research: You need to be sure about the going rates for not only the properties similar to what you are buying, but also be aware of tax implications of the fixtures and fittings you are using so that you can claim tax deductions on your property depreciation reports.

 

  1. Backup: Buying an investment property is similar to buying a car. You need to have money for the purchase, but you also need to keep a little aside for regular expenses like repairs and utility bills.

 

  1. Sharpen expenses: When you are investing in a property, remember that it is a medium to long term financial investment. Try to bring in some fiscal discipline on other fronts like credit card expenses or other ad hoc expenses.

 

  1. Keep the target in mind: You should spend on your property according to the location of the property and the likely tenants/buyers who would rent/buy from you. If the property is in a high-class neighborhood, for instance, invest in a pool, but otherwise, avoid those sorts of expenses.

 

  1. Choose the right entity: In case you are already burdened with tax commitments, consider buying in the name of a trust fund or get your spouse to buy it. That way you would be able to get the maximum benefit from the depreciation on investment property.

 

  1. Use the laws: When people are considering an investment property, they often use available funds to buy outright. Even if you have your funds, try investing that in a better instrument, and offset your interest expenses by the tax deductions available through law.

Like I said earlier it’s always a great feeling, whether you are planning to purchase your 1st, 2nd or 10th property. So, plan well and prepare yourself completely before your investment.

Residential properties that guarantee an ROI

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Being selective about what you invest in, whether it’s commercial or residential properties, is a blessing. You invest wisely and earn enough to make your next purchase. When you’re shopping around, you already know the type of tenant you want to target.

 

Student accommodation

University and international students either live on-campus or in suburban properties close to their school. Residential properties like this need to be monitored closely so that nobody skips rent or causes damage. But in spite of the horror stories, the tenants are normally very well behaved.

You can rent out your properties as student accomodation

Student accommodation can take many forms. It can be a block of units, a single family home or even a townhouse. The home is ideal if it’s close to any given university or college campus and public transport.

 

Retirement living

These residential properties are often built by specialists and handled by a company with specialist experience (Aveo is an example). But on Real Estate, there’s some properties marketed as ‘retirement living’, geared towards investors.

Retirement homes are marketed to those who are over sixty but are by no means invalid. Residential properties on the market have high-end amenities and appliances included in the apartment or home. ‘Old’ doesn’t equal ‘dated’.

Mansion on the outside, retirement living inside

Retirees are good tenants because they respect their home and maintain it to the best of their ability. If they can’t, they’ll have a nurse or family member help them. If you’re looking at residential properties for retirees, it’s worth looking into these medical/nursing services and market them as optional amenities.

 

Single family homes

Small families will rent before they can afford their first home. Single family dwellings that are close to schools and shops are absolutely worth the investment and the fight that comes with trying to purchase one. Competition is fierce because other investors know there’s money to be made in this area of the market.

 

Need more advice? We have these for you…

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Ideal tenants for a commercial property

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Commercial property is a lucrative investment if you have the right tenant. Early on in your property investment planning, you should’ve given thought to who you want in your space. If you’re just starting out, this can act as a handy reference.

 

Coworking space agency

There’s more gig-workers, digital nomads, and freelancers than ever before. They all need a space to work, so why not make yours the best place?

 

Normally they won’t lease the space through you. This is done by the coworking space agency renting the building. If you’re creating a commercial property from the ground up, make sure your design includes a combination of areas than can be used as board rooms alongside open-plan working spaces.

When you’re shopping around for a new property, location is the biggest factor. You’re more likely to get a tenant like this if you purchase an inner-city location, close to public transport. New laws mean you can only depreciate the plant & equipment you install yourself. If the commercial property needs some ‘fixing’, like new taps and lights, you can deduct these without any trouble.

 

Restaurant/bakery/cafe

This tenant is always going to return a good rental profit when they find the right location. Restaurants, bakeries, and cafes are everywhere, both in CBD and suburban areas.

Cafe’s where people can work or relax with a coffee and croissant are always welcome

A commercial property like this will need up-to-date plant and equipment. You can install these yourself and claim the deductions over time. This includes ovens, stoves, refrigeration, and even the taps. If you’re lucky, a well-known cafe will need to open a second location and you’ll happen to have the perfect property ready to lease.

 

Retail boutique

These ones are trickier to lease and it’s best left to your property manager. Their screening process ensures the potential tenant is suitable to lease the space.

Retail is very competitive and some small businesses do struggle. But those who thrive will either open a second location to keep up with demand, or shop around for a larger space.

 

Media agency

A small or mid-tier media agency, like marketing, will definitely treat your commercial property with respect. It’s their ‘home’ and a place for them to host clients of their own. The property manager will interview them to make sure their level of income is suitable to keep up with the rent.

To attract a tenant like this, it’s good to keep the office space to bare basics. The tent will dress it up themselves. It’s also ideal to have a cordoned-off ‘boardroom’ space for private meetings.

 

Need more advice? Read on…

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