This means that once you purchase a rental property, you will need to have a sound investment strategy set up to adhere to.
There are many types of property investment strategies out there, but whichever one you select depends on a number of factors. These can be your timeframe, your budget and your own lifestyle.
For example, if you are looking to accumulate wealth over time to fund your retirement then you may want to have a long-term property investment strategy.
So, to get you on track with your investment goals and aspirations, here are four property investment strategies that you may want to consider for your rental properties.
Renting over a long term
This is a very popular option for property investors, as it enables owners to receive income through weekly rent payments.
At the same time, the property is also slowly growing in value over time.
This is a great option for those who are looking for a positive and reliable investment over many years – for instance, to fund their retirement.
As you will be holding onto the property for a long period of time, you can also use the equity built up to purchase additional homes. This will help you to expand your property portfolio and continue to receive multiple sources of income from other dwellings.
Buying off the plan
Buying houses for sale off the plan is a very common property investment strategy in Australia.
Many of the capital cities across the country are seeing a high rate of residential property construction to keep up with demand from buyers and renters.
There are also regional towns in mining areas that see a lot of residential development to accommodate mining workers.
This opens up a number of doors for those who want to secure an investment property.
One of the biggest pros about using this option is that there are some tax concessions and discounts for investors.
For example, tax depreciation for some of the property’s fixtures and fittings.
Another advantage of buying a property off the plan is that you are able to pay a small deposit at the time of the agreement, with the remaining balance due on completion.
This means that while your property is being built – which can be for up to a year in some cases – it is still able to slowly grow in value. This will then result in you obtaining a more valuable investment for a lower price.
Buying to renovate
When looking for property for sale, you may want to find one that is cheap and can be renovated.
Houses for sale that need a little bit of TLC tend to be a lot cheaper, which means that if you can perform maintenance or renovations yourself then you can use it to your advantage.
You could even move into the property and perform renovations over a long period, giving you time to pay for building when you have the financial means to do so.
With this strategy, it’s important to remember not to overspend. Create a strict budget and stick to it so that you can still make a profit once the home is sold.
It’s also crucial to not set your goals too high and expect a very optimistic sale price. Be realistic and talk to a mortgage broker about how much you should commit to this project.