Is it worth buying an investment property?

The property is a solid option if you’re looking for a stable and secure investment. Far less volatile than other investment strategies, investment property has the potential to deliver consistent rental returns for years to come. While you may start with a single property, careful consideration and management of your investments could see you grow this to a full and profitable portfolio with our help.

When purchasing an investment property, you need to think tactically about where you will buy it and the type of person who generally resides in this area. Doing your research and having a clear understanding of the market and the areas where the property is most likely to increase in value is essential. When considering your budget and return on investment, it’s not just about your rental returns; you need to factor in ongoing costs also.

Unlike a home loan, costs associated with an investment loan are tax deductible (eg interest, repairs, rates, depreciation, etc). However, be aware that any rental income will generally increase your taxable income. Another key difference is that any appreciation in the value of an investment property (capital gains) is taxed.

Along with the cost of your deposit, you need to account for the cost of building inspections, stamp duty, conveyancing fees and any legal costs. Ongoing, as the owner of an investment property, you will need to pay council rates, water rates, insurance, body corporate fees, land tax, property management fees, and repairs and maintenance costs.

Negative Gearing

If you earn less from an investment property than it’s costing you, you’re said to be negatively geared. The motivation to be negatively geared is that it reduces your taxable income, and you accept a short-term loss in the hope of a capital gain later.

We are a team of MFAA Approved finance brokers with the knowledge and experience to help you iron out the details. Contact us for more information.

An MFAA Approved finance broker is much more than your average finance broker.