Monthly Archives: June 2011

Buying Investment Property for Tax Advantages

tax_documents

If you are lucky enough to live in a country which allows negative gearing, then this can be a great incentive to buy property as an investment.

However, you should never look to buy a property simply because it will reduce your tax bill.  Negative gearing only helps to lessen the cash loss that you make.

If you buy a property and it costs you $100 a week to hold, that is a loss, also known as negative cash flow.

You would only accept this loss if the future capital gains would cover the loss and then some!

Buying Investment Property in Sydney

sydney_harbour

Sydney is Australia’s largest city with a population of around 4.5 million people.  Centred on the fabulous Sydney Harbour, Sydney was the landing point of the first fleet in 1788 and the birthplace of modern Australia.

Sydney is divided into smaller council areas:

Ashfield, Auburn, Bankstown, Blacktown, Botany Bay, Burwood, Camden, Campbelltown, Canada Bay, Canterbury, Fairfield, Hills Shire, Holroyd, Hornsby Shire, Hunter’s Hill, Hurstville, Kogarah, Ku-ring-gai, Lane Cove, Leichardt, Liverpool, Manly, Marrickville, Mosman, North Sydney, Parramatta, Penrith, Pittwater, Randwick, Rockdale, Ryde, Strathfield, Sutherland, Sydney (City), Warringah, Waverly, Willoughby, Woollahra.

Property Investing for Capital Growth

Investing for Capital Growth

Capital Growth which is also called Asset Appreciation, is the main aim for most property investors.  Capital growth is when the value of your property increases over time.

But, how to achieve it?

Well, it’s not that difficult as property is a popular investment class which has shown to move up over the long term.  However, it is not enough to just go out and buy any old property.

Should I Use a Property Manager?

Use a Property Manager?

Hiring the right property manager is a key to smooth property management. With the right property manager in place, you no longer face:

  • The stress of answering tenant complaints
  • Taking care of maintenance issues
  • Interviewing prospective tenants
  • Collecting rent, inspecting for damage

If you know anyone else with an investment property in your area, start by asking them for recommendations.  If you don’t know anyone, jump onto the internet and start researching rental properties in your area.

Applying for an Investment Mortgage

Getting Finance for Investment

To be honest, the property investment mortgage market is tight right now. It’s not that there isn’t cash available for loans it is just that banks and other financial institutions are making homebuyers with AAA credit ratings jump through hoops to get financing for investment properties.

One of the keys to property investment right now is the ability to pay back the mortgage. That is why banks are requiring many people with excellent credit to prove they can make their monthly loan payments.

What is Home Equity?

Grow wealth with equity and compounding

Equity is the key to building wealth through property investment.

Simply put, home equity is the portion of your property that you fully own. Most people require a mortgage to buy a property which means a bank or finance institution will lend most of the amount required to buy the property and you would fund the remainder with a deposit.

So if the bank loans you 90% for a property you want to purchase for $100,000 they will fund $90,000 and you will fund the other $10,000…

Use Interest Only or Pricinpal and Interest on Your Investment Loan?

Interest Only or Principal and Interest

For the smart investor, an interest-only home loan has several advantages over the more standard principal and interest home loan. Those advantages include:

  • Lower monthly payments
  • More available cash
  • The ability to use the extra cash for further investment

With a standard principal and interest property financed loan, you pay a certain amount of the loan as interest every month while also paying down some of the principal (also known as the balance).

With an interest-only investment mortgage, the payment you make every month only covers interest, freeing the part that would cover the principal for further investment…

Property Investment Tips

Free property investing tips

When it comes to investing in property, there is alot of information out there.  Some of it is quite expensive too.

Hey, I’m Darren and I am passionate about investing in property.  I created this site to share my experience, ideas and opinions with you.  I aim to give you free, relevant and useful tips that you can apply to building your property portfolio.

I don’t claim to be a property investment expert but I do know a thing or two, having 8+ years experience, and I am keen on learning more myself to further my own property portfolio.  So feel free to comment on my posts and challenge me!