The Perth property market has been making headlines lately, and there’s plenty to get excited about if you’re planning to invest. Home investment Perth has never been more rewarding, with several factors coming together to create long-term rewards for savvy buyers.
At GO Homes, we’re proud to design homes that offer real value, for today, tomorrow and many years to come. So, if you’re on the lookout for an investment property, or just want some ideas to help you GO for it, you’ve come to the right place.
Here are our five handy tips to get started in property investment.
- Understand how property investment works
First things first. How does investing in property help you make money? Here are three ways you can generate income:
- Capital gains – The growth of the property itself, allowing you to sell an asset for more than you paid for it.
- Positive cash flow – The money you earn from rental income, minus the cost of maintaining the property (and other expenses).
- Tax benefits – There are a number of tax benefits associated with owning an investment property, which can help to save you big bucks during tax return season.
- Make sure you have your finances in place
Before you start looking at potential houses or suburbs, it’s important to ask yourself the big question – can I afford an investment property? When investing, it’s vital to remember to listen to your head and make choices based on careful judgement, not emotion.
By ensuring you have the financial support in place, you can create a strong investment strategy for long-term success. If you’d like to chat more about finance, our partners at The Loan Co are also always happy to help.
Here are some things to consider:
- Do you have sufficient savings to cover your expenses? The general rule is three to six months’ worth of expenses saved to fall back on in case of emergencies.
- Do you have any credit card debt or loans? To qualify for an investment home loan, you will need to show that you have good credit history. Before you shop around for loans, try to get on top of any existing payments.
- What is your monthly cash flow? You can calculate this by adding up your monthly income, then removing the regular costs of owning an investment property (say council taxes, insurance, etc). Make sure to factor in maintenance costs, too. By calculating your cash flow, you can create more confidence around your decision to invest, and understand where your money is going.
- Do you have stable employment? In case your investment property ever experiences vacant periods, having stable employment and regular cash flow can help you navigate any future challenges.
- Do your research
Once you’ve set a strong financial foundation for your first investment property, it’s time to do your research! While the Perth market has gone from strength to strength, backed by the mining boom and record low interest rates, it still pays to take your time to do things right.
When researching suitable investment property locations, consider:
- Centrality – Is the location close to the city? Are there good transport links? If further out from the city, are there nearby beaches, parks or other natural facilities?
- Future development – Deep dive into the growth of the suburb and find out what’s planned for the future. Things like new schools, highway access or shopping centres can add huge value.
- Neighbourhood – What is the reputation of the suburb? Are there plenty of facilities for the community? What is the target market of the location, and does it match your investment goals?
- Block location – Is there anything that could depreciate the value of the block over time (such as proximity to main roads) or add value (such as forever views or proximity to parks)?
- Home design – What size home will work best for your plans? At GO Homes, our Investor Series offers a choice of home designs that are ideal for a range of living options.
- Determine your investment strategy
To become a successful investor, you need to determine your investment strategy. This includes painting a clear picture of what you want to achieve, and when you’d like to achieve it by. Start by:
- Setting a timeline – When are you looking to invest, and how long are you planning on keeping the property? This will help you to factor in market movement and any downturns.
- Set your finance goals – Divide your financial goals into short-term, medium-term and long-term goals. This can vary from financing an overseas holiday, to securing your retirement future at an early age.
- Research the risks – All investment comes with risks, so it’s important to do your homework. Find out what could stand in the way of success and make a contingency plan.
- Monitor the market – To build your portfolio, you will need to stay up-to-date on how the market is moving and how it will affect you.
- Find the right investment property
Once you’ve done your research, planned your goals and sorted out your finance, it’s time to find the right home! Things to consider include a flexible layout to suit a range of living options, modern design features with universal appeal to renters, and added extras that set the home apart from the rest.
With this in mind, our GO Homes Investor Series offers incredible value. Packed with inclusions and built to last, these designer homes can bring you many long-term benefits.
Hopefully all this information has given you plenty of food for thought when it comes to property investment. At GO Homes, we’re here to help you GO for it and bring your goals to life. If you’d like to find out more about what we offer, chat with our friendly team today.
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