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  • Tips for buying your investment property

    Tips for buying your investment property

    With increasing population growth and demand for housing accommodation well in to the future, it makes sense that you consider real estate as one investment strategy available to you to secure your own financial wellbeing.

    Becoming a landlord can be an exciting step forward, with opportunities to create capital growth and enhance your investment over time.

    However, buying a property without knowing its condition or potential is a high risk investment strategy that can have long term implications and can result in investors actually losing money from the outset.

    Pre-purchase inspections can often uncover some form of illegal building, which could leave you as the potential landlord exposed to health, legal and safety hazards and have significant impacts on your investment.

    The most dangerous situations are where people have undertaken illegal wiring, plumbing, structural changes or the construction of balconies and decks on the properties. In many cases, the landlord is forced to pull down or rectify these. These costs are unforseen and may need to be financed by extending the mortgage, which is hardly a great start to your investment. It can also interrupt existing tenants or create periods of tenant vacancy, resulting in a lack of rental income.

    This is where bringing in professional design expertise before you purchase a property will potentially help you avoid making a poor decision and costly errors. People can actually devalue their investment through poor decisions, plans and designs. This could result in providing a negative cash flow for the investment and poor re-selling options.

    Assessing the potential is a vital step before buying the property. It should provide you with a rough idea of how much you should pay for the property, the planning / building regulations you will need to comply with, the cost of improvements and the likely return you will get from your spend.

    7 tips for purchasing an investment property include: 

    • Purchase a property that is structurally sound.
    • Assess the financial potential with a design and cost analysis before purchase.
    • Ensure a well-designed, accurately costed feasibility study is prepared before committing to the purchase of the investment property.
    • Check the planning regulations to avoid costly planning appeals.
    • Utilise design that delivers lifestyle requirements being demanded by the market.
    • Select a design where additions are compatible with the existing structure.
    • If applicable, obtain competitive building or sub-contracting quotes.

     

     

    About the author

    • Cameron Frazer

      Cameron Frazer from Archicentre is on hand to help avoid thousands of dollars on costly repairs that can turn that dream home into a nightmare. As our resident architect, Cameron, will show buyers what to look for and the questions to ask when purchasing a property, and how to get the right professional help for your renovation or building project.

      With over 20 years of experience in design, construction, project management and sustainability, Cameron has led significant architectural projects in the private and public sectors. He will also look at how to assess a property, consider the potential renovation costs and how to best unlock future capital growth.

      Cameron Frazer
     

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  • Disclaimer:

    The information here is of a general nature only and is not intended to constitute financial or tax advice. You should consult your professional adviser, accountant or taxation expert for advice specific to your personal circumstances.