Investment property: Are you ready for the adventure?
Category Property
Over the past two years, the world has become increasingly aware of the importance of investing in our futures. We realised that the adventure we're on can adjust its course in the blink of an eye. But how can you ensure that the journey ahead is all it can be?
One sure-fire investment that has been the foundation of many individuals' wealth through the ages is property. But while purchasing an investment property offers you the ability to invest in your future, allowing you to enjoy the adventure without the constant worry of what tomorrow may hold, it isn't necessarily the ideal investment route for everyone.
Let's look at a few of the key questions you need to ask yourself before you decide to purchase an investment property.
Am I financially stable?
While the main objective of an investment property is to offer you financial stability in the future, you have to be financially stable in the present to embark on the journey. Purchasing a property is never a good idea if you are struggling with your current financial responsibilities.
Can I fit the additional financial burden into my current budget?
Looking beyond the additional costs that come with purchasing a property (such as transfer duties and conveyancing fees) and the monthly mortgage and tax payments, the expenses that need to go into maintaining your property have to be considered. As most investment properties are used as rental properties, the importance of constant upkeep is a key ingredient in the investment's value.
Am I willing to play the long game?
As with any investment, you can use your Return on Investment (ROI) calculation to help you decide whether the financial commitment is worth it. While a good ROI on an investment property is usually considered close to 10%, the percentage will vary greatly due to the numerous fluctuating factors involved (such as insurance and upkeep costs).
Do you have the time to do it properly?
All investments require a degree of management to ensure continued growth, but with real estate, the management may prove to be more hands-on than you realised. Owning an investment property requires you to oversee the constant upkeep and maintenance while also ensuring the most rewarding rental experience for your tenants without infringing their right to privacy. This means that you will need to manage the maintenance and financial aspects of the property and the rental relationship with the tenants who are looking after your property.
Am I willing to dig a little deeper?
The best advice is to approach as one would with investments of any type: carefully. Doing the necessary research and investigating the market thoroughly before you make your final decision can spell the difference between a successful investment and one that runs aground a few years in. Taking the time to dig a little deeper and getting to know the market thoroughly will have a greater influence on your final investment than you could believe.
Finally, keep in mind that this is a long-term adventure. And as with any other adventure, the people you travel with can make all the difference in the world. With one of Meridian's iAgents by your side, you'll know the road ahead will be all it can be.
So get in touch with us today, and make the most out of the adventure ahead.
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This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
Author: Meridian Realty
