In the current economic climate, it is important that you obtain the greatest return from your investment property
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You may think that owning an investment property will cost you thousands of dollars upfront, and hundreds of dollars each week to finance; this is not necessarily the case. You may be able to buy a property by accessing the equity in your existing home.
The property doesn’t have to be new - both old and new properties will attract some depreciation deductions. A common myth is that older properties don't provide any depreciation deductions; this is not always true so it is worth making an enquiry about ANY property. Even if the property was built before 1985 there may still be substantial deductions.
A Bernie Lewis Mortgage Adviser can talk you through the options available for purchasing an investment property and help you understand the process.
Thorough property research is an important part of the planning process. A Bernie Lewis Mortgage Adviser can assist you with your research by providing a property report that captures key information, including:
- Property sales history
- Government valuations
- Recent comparable sales
- Suburb profile
- Comparable rents
Before deciding to invest in property, it is important to consider the following points:
- Rental returns – Rental payments from your tenants provide the cash flow income for your property, which can be used to help meet the loan repayments and other expenses of the property, but rent is only one component of your overall investment return.
- Tax benefits – Tax benefits are a very important part of investment property ownership whether your property is negative or positive geared and include such things as depreciation benefits, interest on the loan, repairs and maintenance, etc
- Passive appreciation – This is where the property value goes up in line with the general property market and history tells us that well located properties will on average, double in value around every 10 years.
- Active appreciation – This is where you add value to your property through either buying at below market value or by renovating and adding more overall value than the cost of the renovation.
A top performing investment will have a balance of each of these four elements.
If you would like any further information regarding the purchase of an investment property, please talk to one of our mortgage advisors.
Download a fact sheet:
Tax depreciation for investment properties
File size: 45 KB | File format: pdf