5 Tips in Property Investment
1. Location does matter
Buy a property especially near to universities and colleges will make it easier to rent out. Even a property near to hospital will be a big winning point. Doctors and nurses might be the one who will be renting the property. Always try to choose an investment property that is located in a place with strong demand for rental and you won't be wrong about your investment. It will be also be easier to turn them over for a quick profit if you want to sell the property later.
2. Get to know your budget first
You will need to know your own cash flow first before making up your mind and step into property investment. Property investment is a long term game unless you plan to flip it right away. Flipping it in the year 2015 might not be a good choice as the RGPT is high nowadays for the first 5 years. Other than that, try to ask bank to see how much house loan you can borrow and also ask for pre-approval before start any property investment.
3. Check on ongoing cost
Always check if you are able to live comfortable after paying the house loan, maintenance fees, sinking fund, insurance and repairs for the property. You have to make sure the ongoing cost of the property doesn't tie you up at the end of the day.
4. Should I invest in 2nd property?
You don't have to wait until your current staying home loan is fully paid off before starting to get into property investment. However, make sure that you are comfortable with it or at least have a large sum of your first property paid off first.
5. Do your maths
To ensure that your investment doesn't go negative every month, try check the rental amount first to see if it is able to cover your monthly investment loan. If may lead to financial stress if you don't have enough cash flow for the investment. Even if you plan to sell it right away to make some money, you have to be cautius too. What if your plan doesn't work out? You will at least need to rent the house first to cover up the investment loan before finding a prospective buyer.