9 Tips for Successful Property Investment

Posted on May 17, 2015 by ATB Chartered Accountants

Buying the right property is the key. Recently we put together 9 rules for successful property investment.

The property must be:

1. New, or at least recently renovated, to maximise depreciation/tax return and gross rental returns.

2. In a small or multi-staged development. Preferably under 50 dwellings. Large properties should not be ruled out. They must, however, have substantial points of difference, i.e. well-proportioned and well-appointed apartments; quality facilities and finishes; and good access.

3. In a strong location – “infill” highly favoured, with high existing amenity; a great “walk-score”; and more importantly, potential for above average mid- to long-term capital growth.

4. In an area with five or more pillars of economic support, including cumulative demographic/rental demand and high employment/wages growth.

5. Within five minutes of “hard-core” infrastructure i.e. major work nodes; secondary schools; entertainment precincts and public transport, especially rail.

6. Delivered by a proven development team.

7. High quality in terms of design, materials and construction. It must require minimum maintenance.

8. Consider the potential capital growth and yield.

9. Sold with independent API registered valuation support and within an acceptable range of sales/marketing commission.

So, stick to the 9 and you’ll make millions? Well, short answer – there are no shortcuts and no guarantees. But by following these 9 rules we believe you can, with a little effort and knowhow, convert a modest deposit into a sizeable nest egg. But (yes, there is always one) don’t do it blind-folded – seek independent investment advice, have at least a 10% deposit (but better still a 20% deposit), and have a truly spare $100 per week available to afford to buy that investment property.”

ACTION PLAN

Talk to the ATB Chartered Accountants team today if you are interested in property investing. We can provide you with independent advice about the best name to put on the contract, the best loan available for your circumstances, how to maximise tax advantages, and the cashflow outcome for you of buying an investment property.

This article is provided as general information only and does not consider your specific situation, objectives or needs. It does not represent accounting advice upon which any person may act. Implementation and suitability requires a detailed analysis of your specific circumstances.