Valuable Property Investment Tips

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Valuable Property Investment Tips

Property Investment TipsFinancial experts and advisors all agree: the time to start investing for retirement as soon as one starts earning. But it’s important to be aware of the difference between saving and investing. Simply leaving a part of your income in a savings account will erode its value since the interest rate banks offer is lower than that of inflation. Instead, you need to invest and ensure that the return on your investment exceeds the inflation rate.

 

While there are multiple investment vehicles out there, property investment has certain advantages – such as the fact that you will have a tangible asset that you can see and touch. However, it can also have some disadvantages. If you need cash in a hurry, you cannot just dispose of a part of the property. Keeping these various pros and cons in mind, our investment specialists have these property investment tips for beginners and for experienced investors.

 

Do Your Math

If you plan to invest in property, you are likely to need to borrow at least part of the funds required. Calculate your interest and repayment amounts and ensure that you will be able to make these payments on time, before you commit to purchasing the property and taking on the loans. This is especially important with investment property as you might have to continue making payments even if the property is vacant for a couple of months.

 

Diversify the Property Portfolio

Property values are cyclical and each city experiences its own pattern of rises and falls. In order to ensure that you are never in a position where all of your properties are valued low, its important to spread your investments across various cities in Australia. This will ensure that you have minimized your risks and take advantage of different cycles of each state.

 

Another way in which you should diversify your property portfolio is by having a mix of properties –some that provide higher rents in comparison to the purchase price and some that will appreciate in value over the years. The higher rentals will help you service your loans while the property appreciation will ensure better returns on your investment.

 

Look for Infrastructure

Most prospective tenants are looking for residences that have plenty of useful infrastructure within walking distance, such as train and express bus stations, schools, shops, and parks. By making your investment in such locations you will be able to ensure a steady flow of rental income and able to capitalize from.

 

Purchase Residences in the Mid Range

The maximum demand for residences is in the mid range values, whether they are independent homes, town houses or apartment units. There are bound to be many takes for these. By focusing on such properties, you will build a strong portfolio.