Becoming an investor is a smart way to grow your wealth, generate a passive income or build a nest egg. It may also help your children get onto the property ladder, which does prove difficult for some first home buyers. If you have equity in your own home, you may be able to use this to obtain your first rental property.
Once you have secured your first investment property, you can add equity by doing renovations to increase the property value. As you purchase, reinvest and build equity, you will be able to continue to develop and build your investment portfolio. Positively geared properties have a surplus from the rental income once all the expenses are paid. Negatively geared properties need to be topped up by the owner each month, as the rental income does not cover the property expenses. Ideally, a positively geared property is what you want to look for when investing, as you cannot always rely on capital gains to make up for a negatively geared property.
Ask yourself these questions:
• Do you have equity in your own home?
• Do you have money saved for a deposit? (new build 20% deposit or existing property 40% deposit)
If you answered yes to either of these questions, purchasing an investment property might be an option for you. To get some advice and reliable support if you’re considering looking into an investment property or would like to have a chat about Harcourts Just Rentals managing your investment property, contact our Business Development Manager, Janet Pitman today to find out more.