FIND YOUR FIT

IS OWN­ING PROP­ERTY RIGHT FOR YOU?

Pilbara News - - Pilbara | Property -

Res­i­den­tial prop­erty con­tin­ues to be one of the most pop­u­lar in­vest­ments for Aus­tralians but there are many things to con­sider to en­sure that prop­erty is the right in­vest­ment choice for you.

ME Bank head of home loans Pa­trick Nolan has a num­ber of key is­sues to con­sider when de­cid­ing to in­vest in the prop­erty mar­ket.

Mr Nolan said to think care­fully about why you want to in­vest in prop­erty.

“A qual­ity prop­erty could be an ex­cel­lent long-term as­set that can help you achieve im­por­tant per­sonal goals, like build­ing per­sonal wealth or sav­ing for re­tire­ment,” he said.

“What are your goals and will a rental prop­erty help you achieve them?”

Mr Nolan said prop­erty was an in­vest­ment one should ideally be pre­pared to hold on to for five or more years for the prop­erty to rise in value and to re­coup trans­ac­tion costs.

“This long-term ap­proach means a rental prop­erty should fit your lifestyle — not just to­day but fur­ther down the track also,” he said.

“You don’t want to be in a po­si­tion where a change in work or lifestyle means you have to sell the place pre­ma­turely and po­ten­tially cut short any prof­its on sale.”

Buy­ing a prop­erty usu­ally in­volves tak­ing out an in­vest­ment loan.

In­ter­est can usu­ally be claimed on tax, which helps to re­duce costs, but Mr Nolan said to be sure to crunch the num­bers to see how your cash­flow can be af­fected by any pos­si­ble fu­ture in­ter­est rate rises and pe­ri­ods of po­ten­tial va­cancy.

“You may not be able to raise the rent im­me­di­ately fol­low­ing an in­crease in the loan rate,” he said.

Pic­ture: Getty Im­ages/iS­tock­photo

There are var­i­ous is­sues to con­sider.

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