Our society needs more long-term rental properties available for tenants. Are you able to assist?
For those who ‘believe in property’ (probably every reader I think!), the journey is firstly to buy the residential home, secondly to buy the first investment property, and then (fill in your own space!)
Yet statistics show that around 50% of all property investors sell up in the first five years, and of those that stay in the market, 92% never get past their first or second investment property.
Those numbers indicate the ‘average investor’ is not very successful! - despite general consensus of how profitable and rewarding property investment can be.
Often this can be due to investors not paying sufficient attention to their investments. People can be their own worst enemy. If this is you, it is time to do something about it! To be a successful investor, you need to make it happen.
However, it can often be due to the lack of education for these things in the public domain. Unfortunately, education about ‘money management matters’ in schools is virtually non-existent. Many basic principles of investment are simply not known or understood.
Your investment journey should include regular searching out of what you do not know.
I have been reminded this month of just how important it is for investors to get the basics right, and of how important it is for me to continue to educate.
Twice this month, whilst assisting investors refinance to lower interest rates, I have discovered investment properties with no depreciation being claimed.
It is easy to blame accountants for that, but any investor wanting to be successful needs to take responsibility for their own position. Do you review your tax return when the accountant sends it to you for sign off?
Some years ago, when I sent an investor client back to his accountant with a list of questions, there was an amended tax return subsequently submitted. It resulted in a tax refund of over $10,000.
Buying the right property for investment purposes is critical. A major part of the decision-making process (all too often ignored) is cash flow.
Assessment of cash flow needs to consider rent returns, property expenses, interest costs, depreciation, and tax effects.
You need to be able to afford to keep the property long term! For the benefit of the tenants and the investor. Compounding capital growth is achieved in long term ownership.
Correct structuring and continual review of your property, loans and finances is critical in ensuring long term sustainability of investment. This is where your broker comes in. Interest rates are critical, but what we do for you is far more than just finding the best rate!
Many investors are finding it tough following the interest rate rises. We have recently assisted multiple investors who thought they were in ‘mortgage prison’, who have been told ‘no’ to refinance requests, but who we have been able to refinance into a position enabling them to keep their property.
Property investing can be very rewarding, and it is not rocket science. But do you know what you do not know? Have the right people around you, concentrate on getting the basics right. The university of life will get you there if you make it happen.
Integrity Finance Australia has been serving the community since 2006. If you have any questions or want to know what your options are with your borrowing capacity or your home loan, then please email support@ifafinance.com.au , or call us on 03 9511 8883.