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Tips For Buying a Worry-Free Investment

Friday, 18th November 2011

A leading property investment group says most investors buy the wrong type of property, resulting in headaches and discouraging them from building a portfolio. Australian Tax Office statistics show 73 per cent of investors stop after one property while the Australian Bureau of Statistics reports that 50 per cent sell their rental property within the first seven years.

Kevin Young CEO and founder of The Investors Club, which has helped more than 3300 investors on average incomes build multiple properties since 1994 says: "The most common setbacks for investors are high cost of repairs and extended vacancies.  Both are problems that stem form a bad property choice, costing you not just money but your confidence too.

"Good capital growth is essential.  It's important for investors to be savvy in their purchasing, looking outside their own areas and in markets across the country for areas forecast to have strong growth," say Kevin.

"A good investment property will also attract quality tenants and deliver strong rental yields.  To find the right property, investors need to have a business mind and look for features which would be attractive for a tenant, not for themselves.  Buying on emotion is one of he biggest mistakes investors make."

AS CEO of The Investors Club, with over 40 years' experience and more than 200 properties to his name, Kevin has the knowledge and experience for investors looking to beat the statistics and build a profitable property portfolio.

The Investors Club's tips for buying a worry-free investment property:

Buy new: Old properties will cost you money in maintenance and have reduced tax benefits (in depreciation write downs), leaving you and the tenant to pay all the bills.

Buy a unit: Land is not tax deductible and gives no weekly tax savings yet is generally around 50 per cent of the purchase cost of a house.  With a unit the land is usually around 30 per cent of the purchase cost, leaving a massive 70 percent of the cost tax deductible.

Preferably brick: Brick is durable and has few maintenance costs, not requiring regular painting and replacement.

Bodies corporate add value: Strata properties are able to maintain their value well.  A large number of costs are covered by bodies corporate, including property insurance, garden maintenance, external paint and termite control.  Hence its appearance and value increase

Buy close to the city centre:  Inner-city properties are highly desirable and will have greater pressure on their capital and rental growth.

Choose quality building work:  Make sure your property is quality checked by trained inspectors throughout construction.  Poor workmanship can result in building problems and disgruntled tenants.

Don't be a "postcode buyer":  Purchase property based on its scope of growth.  Cities and regions across Australia all have different growth cycles.  Being aware of them will give you more options.

Choose quality over price: A quality property in a popular area can deliver strong returns.  Purchasing a cheaper property may seem like less of a risk at the time of purchase but can cause more problems and see less growth in the long term.

Understand the property cycle:  Don't be put off by slow growth.  While property cycles have high, low and steady patches over a seven to 10 year period, Australian property values trend upwards over the long term.  The tip is to diversify across cities.

Buy for the area's demographic:  Research the area to find which rentals are most in demand by its demographic.  Units may see high demand in an inner-city area, while townhouses may be more desirable a little further out.

For more information, visit www.tic.com.au

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Comment from west.indies234 on Friday, 13th January 2017

Super site! I am Loving it!! Will return once more, Im taking your food additionally, Thanks. divithemedemo

Comment from michaelmaloney on Monday, 21st March 2016

I'd say it's a good idea to make sure you have some spare cash in storage because nothing  is ever guaranteed.

Michael Maloney: Selfstorage Gold Coast

 

Comment from guadalupeebaumann on Friday, 26th June 2015

Kevin Young is a great and brillinat person, I must say he is a successful investor in the real esate industry. There are many factors should be considered before purchasing any properties.I am able to Pay someone to write my research paper which will be submitted in the next month for my examination. The investors should be aware of buying the property as many properties take times more than expected.

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