Wow, what an amazing month July was!
I’m sure you would have seen the advertising on TV about buying an investment property for around $50 per week.
We’ve had such a huge response that it just confirms how many people weren’t aware how affordable it really is to get into the investment property market. People have called in saying “how is that possible?” or “what’s the catch?” I even had one lady that challenged me personally and said that she wanted to see me that day and if I could show her how it would only cost $50 a week she would invest in a new home there and then. Well she has now commenced the property investment journey and yes, she was right; it’s not going to cost $50 per week. The property this particular client is buying worked out to cost only $32 per week after all the benefits were taken into consideration!
So how is it possible to make property investment so affordable?
When you buy an investment property, there are a number of people and factors involved in the process that contribute to the affordability.
Firstly there is the lender who will loan you the money to purchase the property and they can lend this money as interest only. By paying interest only, this will reduce the monthly repayments compared to a traditional mortgage. With a traditional mortgage you would generally always select a principle and interest loan because your main goal is to pay off your home. For an investment property, it’s more about the increase in value over the years not the act of paying the property off. In South Australia over the past 80 years, we have seen an increase on average of 8% per annum. This means that the average property in Adelaide will double in price every 9 years!
For example, if you bought a $300,000 house today, chances are that property would be worth around $600,000 in 9 years time. Just think back to when you bought the home you currently live in and do a quick calculation to see how your property has performed. Chances are you’ll find it normally works out pretty close to my example every time.
The Taxman & Property Choice
In the case of an investment property you’ll be surprised how much the taxman will be prepared to help you fund your property. If you are at the higher end of the income scale the taxman can be very generous indeed, however average income earners still gain great benefits.
Buying a new property has greater tax benefits than buying an existing property taking into consideration the depreciation benefits that are acknowledged.
The Rent & Tenant
One of the biggest contributors to making your investment property affordable is your tenant. Obviously one of the most important parts about owning an investment property is getting the right tenant and the right price. There is no use renting out a 4 bedroom home to a couple or a 2 bedroom unit to a family or even a 2 storey home to pensioners. You’re looking for the maximum rental return possible.
Each time you need to replace a tenant it can cost you hundreds of dollars, so ensuring you select the right type of tenant can make a big difference to your return.
A good property manager can take care of selecting the right tenant, drawing up the rental agreement, lodging the bond, conducting inspections and more. The great news is their fees are tax deductible too!
The Right Property Investment Advice
I have to admit, one thing that amazes me is all the people that go to those investment seminars with a huge group of 5o other people and expect to be taught what is best for them. Each person or couple has different needs, so that’s why the team at TIPS will sit down with you and develop a strategy that suits you. Investing in property is all about looking at your individual situation in conjunction with your accountant and financial planner, not with 50 other people that you have never met.
So if you’ve ever thought about investing in property, now would be a great time to talk to us about the Total Investment Property Solutions, $50 per week investment property special. Our package makes it easy for everyday people to invest in property.
Have a great August
I would recommend TIPS to anyone considering buying/building an investment. We look forward to buying more properties with Fred and the team from TIPS in the future.
They understood this was a choice for our family’s future, not just a house
I have dealt with Fred for almost ten years now and in that time he has helped me buy more than 6 properties.
I would recommend TIPS to anyone considering buying/building an investment. we look forward to buying more properties with fred and team from TIPS in the future.