Tag Archive | "property investing"

How To Make Property Investment Practical for You

Investing in property these days is an expensive and time-consuming task. However, it’s still one of the best ways to accumulate wealth and can give you plenty of financial options for the future. Unfortunately, investing in property can be difficult and may seem like a daunting task. This is especially true for anyone that doesn’t have experience in the field and may find it overwhelming to get started.

So to help you out, we’ve put together some simple tips on how to make property investment more practical for you.

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Decide on how much time and money you’re willing to invest

Depending on how much money and time you’re willing to put in, you’ll have multiple different ways to invest. Some people might buy an entire property just to rent it out, but others might look for low-cost options such as real estate investment trusts. With so many options available, you really need to decide if you’re going all-in to turn this into a career opportunity, or if you’re just looking for a way to grow your wealth.

Investing your time and money into learning about real estate

If you’ve decided that you’re going to spend more time and money learning about real estate, then it’s a good idea to start building foundational knowledge on how the market works. You can do this with formal lessons and courses, but you can also learn from relatives, friends, or even YouTube channels. Remember to take all information with a grain of salt and realize that market conditions can change at almost any moment.

With a strong understanding of the fundamentals of real estate investment, it can make investing in a rental property much easier. You’ll have more knowledge about the different terms that people use, and it’ll be easier to grasp new concepts and lingo as you learn more. This is the option that you should choose if you’re looking to turn your investment interest into a full-blown career path in the future.

Relying on services and experts to help you invest in real estate

The more practical option for people with limited time is to rely on services and experts. For example, you can look for a property management rental service to help you manage a property, or you could look at real estate investment trusts which operate a little more like traditional investments.

There are loads of options for low-effort investing, but you need to realize that those services cost money. It’s going to eat into your profits which can be a problem if you’re looking to grow this into a career. However, if all you’re looking to do is grow your wealth over a long period of time, then it’s one of the more practical ways to invest in real estate.

Whatever option you choose, it’s important to educate yourself on real estate and how the market works. Having a better understanding will help you develop your own investment strategies and can help you avoid shady services.

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Don’t Settle For a House…Buy a Town!

There are a lot of unusual properties that are put up for sale, and recently a small town was sold on the eBay website. This town is located in Washington in the United States. It was first established in 1898 when the Gold Rush hit the area and has been there ever since. Now one person owns it all including a log cabin that is 100 years old, a four bedroom ranch, a gas station with a restaurant and now one person also owns the zip code.. Read the full story

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Mortgage Choice Top Tips for property investors

Use the equity from another property

Tapping into your home’s equity, or equity from another property investment, can be a great launching platform for buying an investment property. According to Mortgage Choice’s latest investor survey, 60% of those looking to buy an investment property before mid 2011 plan to access the equity in their home in order to fund all or part of their investment property purchase. How does this work? Say your home is valued at $700,000 and you owe $350,000 on your mortgage, you can use the $350,000 equity in your home to pay for up to 100% of the new property, or if it is more expensive you may be able to borrow more with some lenders.

Pick a loan tailored to your investment strategy

Meeting lending criteria is only half the challenge; another big one is choosing a loan. Think carefully about interest only vs. principal and interest options. Although interest only loans will not reduce the loan amount, they do result in smaller monthly repayments and allow you to make greater contributions to your principal place of residence or to invest in another asset, all the while allowing the investment property to grow in value through capital gains.

Consult a buyers agent/property finder

Seek professional advice about what type of property will maximise your investment. Most investors want property to secure them (as an average over the entire loan term) an annual return on investment that is higher than the costs eg. if net rent is 3% and the interest rate is 7% then it only needs to grow in value at more than 4% to be profitable. Experienced buyers agents know the market better than most and are a valuable resource for advice and for negotiating with property sellers and/or their agents.

Positive vs. negative gearing

Expenses you incur on an investment property are tax deductible. If your loan repayments, fees and other property-related costs exceed your rental income, the net loss can be offset against other income you derive, reducing the amount of tax payable on that income. This is called negative gearing. Or, you may consider positive gearing, where the annual rental income received from the property covers or is higher than the repayments and costs.

Consider all the costs

It is crucial to create a detailed budget outlining your outgoings and earnings. Property investment usually incurs unexpected expenses and it is easy to go over budget on improvements and repairs. Don’t fall into the trap of relying on your property’s income to cover additional costs such as new hot water systems or interest rate rises. Also think about capital gains tax you will have to pay if you decide to sell the property. Be sure to consult your taxation advisor.

Call the customer service centre on 13 MORTGAGE, visit www.mortgagechoice.com.au or www.facebook.com/MortgageChoice or http://twitter.com/MortgageChoice.

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