Why invest in property?
Australians are obsessed with property! Those who’ve been watching the market or are buying a property have seen the prices rise and rise over the last decade – but can it continue?
You need to think about why you want to invest in property to make sure you get it right with your property investment. Are you buying to create a family home, retirement income or do you just want to make some money in the medium term?
The reason why you want to invest will have a big impact on your property strategy, where you should buy, how much you should spend, and how the purchase should be structured.
How much should I borrow?
When you set out to buy property, you need to know what the banks will lend you. But this doesn’t mean you should borrow as much as they’ll lend, or that you should borrow as little as possible and use all of your savings as your deposit. If you get your borrowing level wrong, you may miss out on tax benefits and give up flexibility in the future.
How much you borrow and how much you use for a deposit will dictate what your cash flow looks like after you buy. Your spare cash flow is going to drive how much you use to actually pay down your debt, what sort of buffer you have for when interest rates go up, and how much is left over for your lifestyle spending.
Where do I look to buy?
This is probably the biggest driver of how much and how fast your property will grow in value, so it’s critical you get this right. You should be looking at proximity to CBD/ jobs/schools/etc, vacancy rates, default rates, and population growth. You normally pay more to get something that ticks all these boxes, and you should understand how these factors will make a difference when you sell.
You need to understand the area you’re buying in to make sure you get the most out of your investment. BHPW work with expert buyers’ agents to ensure clients make sensible purchases and achieve long term growth.
What type of loan do I need?
Which bank to choose, basic loans, mortgage offset accounts, interest only vs. principal and interest, fixed vs variable, and broker vs. bank – all these choices will impact the outcome you get in the future, so make sure you choose wisely. There’s plenty to get across, and everyone you speak to will have a different opinion.
Our advice is to use one of our qualified mortgage expert partners. These experts scour the market to ensure your loan is the best suited to you and can save you tens of thousands of dollars over the life of the loan.
Are you looking for a genuine partner to help you drive the next stage on your financial success journey?
We would be delighted to discuss your requirements and objectives in person or over the phone to get to know your goals better. Please feel free to contact us or book an appointment to set up a no-obligation meeting with one of our financial advisors.