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The Importance Of Having The Right Team
When buying an investment property, don’t skimp on your team. If you’re thinking of buying an investment property, you’re doing it to make money. So it only makes sense that you have the right team to get you to your goal.
There are many ways that you can end up in the negative when you make a careless investment. However, the benefits are even greater when you can see the process through the eyes of professionals.
Currently, there are almost 9 million Australians who own investment property. Bear in mind, we are talking about people who own a property that is not being used as their primary home. That’s roughly 30% of the population.
Since the pandemic, this number has increased, and so has the property prices. Today, 25% of homes in the country are worth at least $1 million a piece. While interest rates are low, however, you still want to make sure that you are not bleeding money throughout the buying process.
“Now, $1.5 million hardly gets you a house in many places. We have seen the housing market value go from $7 trillion to $8 trillion to $9 trillion in a year and a half.” – Rich Harvey, Property Buyer’s Agent
What to consider first
Buying an investment property is a very large expense and requires a lot of work. There are many things that need to be considered before making an offer on a property. You need to think about things like:
– How much money do I have available for a down payment?
– What is my exit strategy?
– How much will it cost me to renovate or rehab the property?
– How much cash flow will this property generate?
Having a good team when buying investment property
You’ve heard the saying “Your Network Is Your Net Worth” right? Well, if you consider this when building your team, then your net worth will grow exponentially! Here are four people you should have in your pocket to close that deal:
When executed correctly, garage conversions have the potential to increase your property’s value by up to 10-15%.
We’re talking about real estate here. So there’s an excellent chance your accountant will be called upon to give their professional input. It’s also a good idea to get their stamp of approval on any important financial decisions you make.
Your accountant can see the bigger picture when it comes to your finances. So when you’re ready to invest, they can help you determine your investment potential based on several factors including your current income. They can show you things that you didn’t even think of before. Your accountant will also be able to advise on things like capital gains tax when it’s tax time.
“Ask your accountant to work through a budget with you in terms of what it will look like post-purchase, making sure you’ve allowed for all the costs, making sure you’ve allowed for the debt, understanding whether you should be borrowing on an interest-only basis and what the cash flow impact of that is.” -Greg Hayes, Hayes Knight Accountants and Business Advisors
2. A mortgage broker
You need a mortgage broker who is knowledgeable about investment properties. Your mortgage broker will help you choose the right financing for your investment. A good mortgage broker will be able to provide you with different options from different lenders based on your needs. They do the negotiations on your behalf.
The mortgage broker is paid a fee by the institution that you finally settle on. So you don’t need to think about paying a mortgage broker out of your pocket. Plus, they will help you complete all necessary documents to ensure that you have a smooth transaction.
3. A buyer’s agent
Get a buyer’s agent who understands investment properties and how they differ from residential ones. A good buyer’s agent can get you access to property that isn’t even on the market yet. They have direct access to sellers in different areas. So they can make sure you find the right property.
4. a conveyencer
Your lawyer is a must for any legal matters. So when it comes to real estate transfers, a conveyancer is a must-have on your team. They are also invaluable when it comes time to draw up contracts to protect both parties interests in the property over the long haul.
Your conveyancer makes sure you don’t get tied up in anything like pre-existing covenants, caveats, and easements, for example. They will make sure that the paperwork related to the purchase, such as the title, checks out.
Most importantly, any of these people should be able to tell you that you’re making a mistake or advise against a certain idea. If they can’t, then they aren’t doing their job correctly. You want someone who will tell you when something isn’t right.
If you’re considering buying an investment property, it pays to speak with a few different professionals. As we mentioned in this post, there are people who can help you find the right investment and others who specialise in making sure everything goes smoothly once the purchase is complete. It’s always best to have your team of experts lined up before taking any action. What type of expertise do you need? MLS Finance can help connect you with those service providers today!
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