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9 Rules To Live By When Investing In Property

Investing in property can be a transformative journey, and at Freedom we're here to guide you every step of the way. Whether you're a first-time investor or a seasoned pro, we are here to provide you with essential strategies that will empower you to make informed decisions and maximise your returns. Follow these 9 tips to make informed decisions, maximise returns and secure long-term profitability.

  1. Pay the right price: Do your research and make sure you know the complete sales history of all the units in the apartment block you're considering for purchase. You can now easily access this information through various websites, all at a reasonable cost. Having a knowledge of the similar unit's worth or their comparative value is essential.

  2. Infrastructure/transport: Staying ahead of the times by researching and finding out about upcoming infrastructural developments can help you stay ahead of the competition. Nowadays, there are many websites that can provide you with information about upcoming public transport investments or increased internet speeds, etc.

  3. Add Value: Investing in a place where you can increase its worth is usually a good decision. To put it simply, some of my best clients have achieved higher yields by giving their property a facelift. This usually involves a new kitchen, window blinds, carpets, and various appliances. By investing an approximate $25,000, they are able to increase the worth of their property by $50,000 and the rental price as well.

  4. Don’t Follow Everyone Else: It can be difficult not to jump on the buying bandwagon when everyone else is purchasing, a sign that the market is on the rise. Nonetheless, it's important to remember that sudden changes can occur, and it's essential to do your own research.

  5. Follow The Leader: Contradicting the previous statement, there are times when it pays to follow the leader – more so when they are someone who is knowledgeable and respected, with a successful background.

  6. Have A Strategy: It is essential for you to have a financial expert assess both your current financial condition and objectives, and create a reliable plan of action. You must figure out the most appropriate way to purchase the property and why it is the right choice. Anything from a self-managed super fund to personal ownership may be the best housing option depending on what stage of life you may be in. Tax obligation is a key factor to keep in mind while making a decision. Once you acquire the property in a certain legal entity, it is difficult to modify it without consequences.

  7. Do The Numbers: Prior to a property transaction, you must be aware of its financial implications. Are you familiar with the taxation of stamp duty on your investment property? When you sell, how does claiming depreciation impact your capital gains tax? Likewise, how are the selling fees handled? These are complex issues, but you must understand them before investing in property.

  8. Don’t Believe The Hype: Contrary to popular belief, property prices don't always increase. In a downturn, if you are not under pressure to sell, then you do have a chance of regaining equity. However, it is not a reality for everyone. In the case of an off-the-plan purchase, you can leverage a property with as little as a 5% deposit. While it is possible to double your money in this situation, the opposite also applies - if the price drops by 5%, you have already lost all of your deposited funds. This does not even factor in exit and entry costs, making the situation even worse. It is important to assess the situation carefully and do the maths before investing, however, many people fail to do this.

  9. Buy The Land Free: Look for opportunities to acquire a property for close to, or lower than its initial construction cost. After the Global Financial Crisis, reports demonstrated that some investors were acquiring buildings at prices substantially below the costs incurred in construction. Buying property where the land is essentially free, it is nearly impossible to not make money in the long run, no matter how long it takes for the property's area to pick up and prosper again.

In conclusion, investing in property offers incredible potential. At Freedom, we provide essential strategies to empower investors no matter your experience. Pay the right price, stay ahead of infrastructural developments, add value through renovations, do your own research, have a solid strategy, understand financial implications, avoid hype and seek opportunities where land is essentially free. With our guidance, embark on your property investment journey confidently and achieve your goals.

For more information and guidance when it comes to property investing, please speak with your local Freedom agent.


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