BUILDING AN INVESTMENT PROPERTY? 7 things you need to know first
ASPECT HOMES QLD | GYMPIE BUILDERS
Investment properties are bought for their rental returns and anticipated capital growth. Like all investments, it is prudent to understand what you are getting into and seek professional advice and guidance before you build.
Aspect Homes Queensland Gympie Builder Doug Channells has helped many investors through the design and build process in Gympie and surrounds. He shares some tips and pitfalls to avoid when considering building an investment property.
Aspect Homes Queensland Gympie Builder Doug Channells has helped many investors through the design and build process in Gympie and surrounds. He shares some tips and pitfalls to avoid when considering building an investment property.
1. KNOW THE DEMANDInvestigate what kind of property is in demand now and what is going to be in demand in future? What existing or upcoming areas will be appealing places for people to live? What is the areas’ demographic now and what will it look like in 5-10 years? How will we be living then? What will our lifestyles be like? Asking these questions will help achieve a quality, functional design from the outset.
2. CONSIDER MORE THAN RENTAL RETURNSGo beyond the prospective rental returns and consider your homes’ capital growth too. The increasing value of your asset over time can be just as important, particularly if you are looking to negatively gear a property.
Bear in mind repayments on your investment loan that aren’t fully covered by the rent means your property will be negatively geared. Yes, this can have tax advantages, but be mindful it could create financial stress if you have insufficient funds to cover ongoing loan repayments, rates, body corporate or other fees.
3. ASK YOURSELF, WHAT DO RENTERS WANT? Where possible build near public transport and in areas within walking distance to the CBD or community hubs, as these locations are always popular among renters. Investing in a property close to medical services, universities/training facilities and schools will make it more attractive to renters too. Check out sources of likely tenants in the area as well.
2. CONSIDER MORE THAN RENTAL RETURNSGo beyond the prospective rental returns and consider your homes’ capital growth too. The increasing value of your asset over time can be just as important, particularly if you are looking to negatively gear a property.
Bear in mind repayments on your investment loan that aren’t fully covered by the rent means your property will be negatively geared. Yes, this can have tax advantages, but be mindful it could create financial stress if you have insufficient funds to cover ongoing loan repayments, rates, body corporate or other fees.
3. ASK YOURSELF, WHAT DO RENTERS WANT? Where possible build near public transport and in areas within walking distance to the CBD or community hubs, as these locations are always popular among renters. Investing in a property close to medical services, universities/training facilities and schools will make it more attractive to renters too. Check out sources of likely tenants in the area as well.
4. MAKE IT APPEALINGNeutral tones, a high-quality kitchen and bathrooms and a well-presented property will attract better quality tenants. Avoid becoming emotionally attached to the home, however remember it is your investment and your tenants’ home.
5. KNOW YOUR NUMBERSWhen building an investment property, stick close to the area’s median price for that type of property to avoid reducing your yield. Remember, while rental income is taxable, this could be partially offset by tax-deductable rental and operational expenses.
Budget for rates, insurance and general repairs. A simple guideline for estimating expenses to assume your expenses will amount to 50% of your gross annual income on the property.
Budget for rates, insurance and general repairs. A simple guideline for estimating expenses to assume your expenses will amount to 50% of your gross annual income on the property.
6. THERE IS NO FOREVERIdeally, your property’s value will grow over time and generate profit at the point of sale. Bear in mind you will typically pay capital gains taxes on the property if you sell it at a profit.
A home that appeals to both investors and owner-occupiers increases the market opportunity for your property and ideally maximises your selling price (owner-occupiers may pay more for the right property as it becomes a more emotional transaction compared to monetary investment).
7. PITFALLS TO AVOID Don’t commit to anything until you have done your due diligence thoroughly about the prospective asset, location and tenant market.Don’t make emotionally driven decisions – check the facts and seek professional financial advice relevant to your individual circumstances.Don’t over-capitalise and assume the lending market isn’t subject to future change and global influences.Don’t think you won’t need a safety buffer – do not rely solely on rental income to pay expenses on your investment. IS GYMPIE A GOOD INVESTMENT? A steady increase in median property prices translates to a 6.43% capital gain over five years. The median home price has risen to $265,000 and real estate investors could earn a rental income of $310.
Read more here: https://www.smartpropertyinvestment.com.au/data/qld/4570/gympie
A home that appeals to both investors and owner-occupiers increases the market opportunity for your property and ideally maximises your selling price (owner-occupiers may pay more for the right property as it becomes a more emotional transaction compared to monetary investment).
7. PITFALLS TO AVOID Don’t commit to anything until you have done your due diligence thoroughly about the prospective asset, location and tenant market.Don’t make emotionally driven decisions – check the facts and seek professional financial advice relevant to your individual circumstances.Don’t over-capitalise and assume the lending market isn’t subject to future change and global influences.Don’t think you won’t need a safety buffer – do not rely solely on rental income to pay expenses on your investment. IS GYMPIE A GOOD INVESTMENT? A steady increase in median property prices translates to a 6.43% capital gain over five years. The median home price has risen to $265,000 and real estate investors could earn a rental income of $310.
Read more here: https://www.smartpropertyinvestment.com.au/data/qld/4570/gympie
OUR PACKAGE FOR INVESTORSAspect Homes Queensland offers investors an upgrade on selected house designs for a complete turn key, all-inclusive package.
Our comprehensive external finishes include turf, fencing, clothesline, letterbox, digital TV antenna, flyscreens, concrete to driveway, entrance, alfresco area and service pads.
Our complete internal finishes include vertical blinds to all windows (excluding wet areas), insulation, kitchen appliances including 600mm oven, ceramic cook-top, canopy and dishwasher and an inverter reverse cycle air-conditioner.
Have a chat to Doug and the team today at our showroom to find out more about what makes building an Aspect Homes Queensland property in Gympie a good investment.
Find us at 23 Geordie Road, Monkland, Queensland 4570, call (07) 5482 2232 or email admin@aspecthomesqld.com.au.
Our comprehensive external finishes include turf, fencing, clothesline, letterbox, digital TV antenna, flyscreens, concrete to driveway, entrance, alfresco area and service pads.
Our complete internal finishes include vertical blinds to all windows (excluding wet areas), insulation, kitchen appliances including 600mm oven, ceramic cook-top, canopy and dishwasher and an inverter reverse cycle air-conditioner.
Have a chat to Doug and the team today at our showroom to find out more about what makes building an Aspect Homes Queensland property in Gympie a good investment.
Find us at 23 Geordie Road, Monkland, Queensland 4570, call (07) 5482 2232 or email admin@aspecthomesqld.com.au.
OTHER HOME DESIGNS YOU WILL LOVE
WHY BUILD WITH ASPECT HOMES QLD
Experience
- We Have Over 25 Years of Building Experience
- Personalised Service From Start to Finish
- We give an obligation Free Site Inspection
- We Design and Build Quality Beautiful New Homes
High Quality
- We provide a six year structural guarantee
- We use local suppliers and tradepersons in the Gympie Region
- We provide inhouse a full colour/product selection consultation
- Choose From Our House Design Plans or a Custom Design
OUR AWARD WINNING DISPLAY HOME IN GYMPIE
AWARD WINNING BUILDERS
Aspect Homes QLD was recognised as Winner of the 2019 Sunshine Coast President’s Award at the Sunshine Coast Master Builders Housing & Construction Awards for its ‘house with a difference’
HighESt Quality
The Homes finishes and fittings used are of a standard normally appearing in a more expensive property.
THE HOME WITH A DIFFERENCE
Boasting modern, open plan living with a stunning alfresco area, this quality family four bedroom new home ticks all the boxes for families and investors alike.
AFFORDABLY PRICED
High quality design, clever use of space and attention to detail that delivers over and above expectation for its price. Thats why we are award-winning Gympie builders.
Feel free to EMAIL, call and visit us. We really love to communicate with our clients.
(07) 5482 2232
23 Geordie Road, Monkland QLD 4570