As the multitude of property investors around Australia will tell you, buying an investment property involves forward planning, not unlike the family home. But while the decision to buy a family home is usually very emotive, buying an investment property should be based on a logical and calculated process.
Investors need to remember that whereas a family home is a purchase from the heart, an investment property is very much a purchase from the head.
It is important to think as your future tenant would and the factors that are going to most appeal to them. While you may not be interested in living in a metropolitan location, many potential tenants are. And while you may not have the need to be close to public transport services, your future tenants might.
It is also important to do your research and choose a property in an area with capital growth potential. Market research publications, such as the REIQ’s Queensland Market Monitor, may assist in your research.
You also need to consider not only the purchase price, but the ongoing expenditures associated with an investment property. For example, maintenance and property management fees if the property is tenanted.
If you are investing in a unit or townhouse, or any lot in a community titles scheme, it is advised that you request the agent to obtain the Body Corporate records. This will provide you with a report on the state of affairs for the building, allowing you to make an informed decision.
For the most current advice pertaining to the acquisition of residential property by foreign investors or interests in Australia, please click here.
When selling an investment property, you will need to take into account any associated tax implications, such as capital gains tax. As with any property purchase, it is recommended that legal and financial advice is obtained.
If you are selling a property that is currently rented, your obligations to the tenants must be adhered to, including providing a Form 10 – Notice of Lessor’s Intention to Sell. Click here for more information on landlord obligations.
The March quarter Queensland Market Monitor is released this Friday.