Market Update

Stock remains low - gain access to the huge number of off-market properties where opportunities do exist

Research is Crucial to Investing in Property

property investorsWe feel an undying love for home ownership and this has made us the country with the maximum percentage of home owners. But I feel our love for brick and mortar goes further than this. It is not just home ownership but investment in property, too, which gets a lot of attention from our side. So, the first time we have enough cash to spare or we have saved enough equity, we take the property market plunge as investors.

1.9 million property investors in Australia

Presently, going by reliable statistics, there are 1.9 million property investors in Australia. And lest the data be misconstrued, majority of these investors do not have any property portfolio to call their own. These are simple parents and couples with one investment property under their name.

Negative gearing

Many of us try to maximise the bounty of negative gearing and look to claim tax deductions under various heads. These may include, but are certainly not limited to, maintenance costs and mortgage interest. When the mortgage on your property exceeds the rent, you can claim tax deductions on other sources of taxable income to offset the negatively geared property. This encourages many of us to continue investing in property.

Research is crucial

While this facility offered by gearing can help us jump on the property bandwagon, there is no denying the need of research in many key areas of investment. In what locality are you investing in property? Is it backed by infrastructure development programs? Does it fall into areas of zoning restrictions? What are the Bushfire guidelines (not that relevant for now though, because we are closing in on winter)? What are the comparable sales figures for the area? What are the bank’s valuation guidelines? What may be the vacancy rate/rental yield? Has there been capital growth in the recent past? There are questions aplenty which beg for due diligence from our side.

Investors must keep an eye on the wishlist of tenants

Obviously, there is yet another dimension to the property buying game. When you’re investing in property, you also have to think in terms of the tenants and research what’s high on their wish-list. If you ignore this important facet of property investment, you may end up dissatisfying potential tenants and settle for the dime-payers.