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The Real Estate sector is starting to redeem itself in most marketplaces.
Along with the stability of interest rates and borrowing conditions, consumer confidence in the property market continues to build again.
Investors have had to watch property values stay stagnant or fall in recent years. In some marketplaces property appraisal prices have fallen below the investors’ original purchase prices so they are uneasy about staying in the game or buying an additional property.
There are also the tax benefits of owning an investment property to offset your income. Even in times of higher vacancy rates and lower rental yields the advantages of mortgage tax deductions are of high value to a lot of investors, not to mention the capital growth.
There are a few key points to consider when taking the plunge:
Income or growth? Younger investors are usually focused on capital growth while older investors often rely on a rental income to supplement or fund their retirement. This is going to depend on your choice of marketplace to invest in so do your research on where you are going to get the best income or capital growth.
Make a plan. It’s important for anyone investing in property to have a strategy and exit plan for how you are going to get out. It usually requires 10 years to make it worthwhile. Part of the planning is to have a disaster plan in place which needs to include insurance, in particular landlord and income protection.
Know the costs. Its not just your mortgage and interest rates to take into consideration when budgeting. There are going to be council rates, insurance borrowing costs, land tax and many more.
It’s those investors that have hung in there to ride the “ups and downs” that will see the best results in their property investment. The key is to hang in there, buy well and have plenty of patience.