Dean Morrison - July 30, 2019
So, you’re looking to invest in property? Exciting times! Though, it can also be quite daunting if it’s your first time investing. What is rental return? Never heard of strata fees? And what is negative gearing? Keep reading to find the answer to all these questions, and more.
Why should I invest in property?
Investing in property has proven to be a stable, low-risk investment strategy. While the property market has seen a downturn in the last few months, history has shown the value of properties rarely decline – especially in comparison with the stock market which is a much higher risk investment. If you invest in the right area you can not only profit from a good return on your investment but also receive continual cashflow in the form of rental return.
What type of investment property will get me the best return?
Investing in property is all about capital growth, so you will want to invest in a property that is likely to increase in value. You also want to ensure the area you invest in is popular with renters, so you receive rental return.
What is co-ownership and joint ownership?
Co-ownership and joint ownership is when you choose to invest in property alongside friends or family members. While it might be nice to share the responsibility with someone and not having to fork over as much money initially, this strategy can be risky. One of your co-owners may find themselves in financial difficulty or you might disagree on what to do with your shared property. If you choose this strategy, Arden Homes recommend that you seek legal advice to write a contract outlining each investors commitment, responsibilities, and percentage of ownership after the mortgage has been paid off.
Can I claim on depreciation?
Absolutely! When you purchase an Arden Escape range home, you could benefit from tax deductions worth thousands of dollars. When your property is an investment asset you can claim its depreciation against your tax return.
What is rental return?
Rental return is effectively the amount of money you make on your investment property. You can work this out by measuring the gap between your overall costs and the income you receive from renting out your property.
What is stamp duty and do I need to pay it?
Stamp duty is a form of tax that applies to all purchases of residential properties. In Victoria, it needs to be paid by the buyer within 30 days of settlement.
Do I need to hire a lawyer?
Purchasing an investment property is essentially a legal process, so getting a lawyer involved is recommended. They can help you go through paperwork and in negotiations. However, they will charge a fee so make sure you factor that in.
What areas are good to build in?
Estates and masterplanned communities with amenities like schools, parks, shopping precincts, and transport are areas that generally offer opportunities for better financial return. Arden’s Escape Range house and land packages are located within dynamic communities that are continuing to grow and will be attractive to families and young couples. To find out where we build, click here.
What is negative gearing and how does it work?
Most people will borrow money to invest in property. This is called gearing. Negative gearing is where your income from the investment is less than your expenses. Essentially, this means you’re making a loss.
What is positive gearing and how does it work?
On the other hand, positive gearing is where your income from the investment exceeds your interest and other expenses. This means you will have extra money in your budget; however, you will need to pay tax on the additional net income.
Does Arden Homes offer property investment advice?
If you’re interested in purchasing an Escape Range home, Arden has partnered with Chris Angus from Loan Studio to provide you with expert financial advice. To contact Chris directly or to make an appointment, call 0407 912 586.
To find out more about Arden Homes, or to book an appointment, call Lachlan on 0407 944 088.