Property Investment

Investing in residential real estate is proven to be one of the best ways to grow wealth for the future. The number of Australians choosing property as a vehicle to retire wealthy and happy has been on the increase for the past 10 years. 

Below are some things to consider when getting started.

• Property investing means the tenant helps pay the costs of holding a property while the value increases to create equity.
• You can invest in property for a couple reasons either by buying and holding property or property development by way of renovations, sud-division, or construction. The ultimate outcome is to increase your equity and or income/cash flow from the property in the future.
• Buying and holding property is the easiest and safest way, but you must be prepared to hold for the long-term, maybe 10-20 years. This will certainly guarantee an increase in equity as property prices have proven to always increase over time.
• Affordability is a very important factor, so you need to know your numbers. Consider what the annual costs are to hold a property such as rates, insurance, management fees, maintenance costs and the repayments on the loan. Once you know these annual costs you can then calculate the annual rent and compare the difference.
• If the rent covers all your holding costs this would be great, but this is not always the case to begin with. In most cases the rent will increase over the first five years to cover more of your holding costs.
• There are many loan options, but basically there is principal and interest loans (P&I), and interest only loans (IO). Most investors start with interest only to make the affordability easier, and then switch to P&I after a few years to focus on decreasing the loan amount. 

Many people procrastinate buying a property and regret it later when the property prices increase. This is mostly due to a lack of understanding on how to safely approach property investing. Here at Tidbold Real Estate our Team are more than happy to share our knowledge and experience so you can either get started or continue to grow your portfolio.