First Time Property Investors Where To Start

Welcome to the world of property investment! If you're a first time investor, you may feel overwhelmed by all the different options and strategies available. Don't worry, it's normal to feel this way. In this blog post, we will provide a comprehensive guide for first time property investors, outlining the key steps you need to take to get started. From understanding the different types of property investment to finding the right finance and the most suitable property, we'll cover it all. So, if you're ready to take the plunge into property investment, let's get started!

Understand the Property Market

When it comes to investing in property, it is important for first time investors to have a full understanding of the property market. This means having an understanding of the local and national economic climate, and the factors that can impact property prices.

One of the most important things for first-time property investors to understand is the concept of a “market cycle”. A market cycle refers to the regular up and down movement of property prices over time. The characteristics of a market cycle can vary from area to area, so it is important to research the local market and understand the market cycle in the area that you are looking to invest in.

Additionally, it is essential for first-time property investors to understand the current state of the market. This means researching the current median house prices in the area, as well as the average rental yields for the area. It is also important to have an understanding of the types of properties that are in demand in the area.

When investigating the property market, it is also important to look at the broader economic factors that can affect property prices. This includes tracking any changes in the unemployment rate, the inflation rate, and the interest rate. It is also important to look at any changes in the availability of credit, as this can have a significant impact on the property market.

Finally, it is essential for first-time property investors to have an understanding of the regulations and taxes that are applicable to property investment in their area. This includes researching any stamp duty, capital gains tax, and land tax that may be applicable. It is also important to understand any zoning laws in the area, as this can affect the types of properties that can be purchased.

By researching and understanding the property market, first-time property investors can ensure that they are making informed decisions that will help them achieve their investment goals.

Research Different Loan Options

When it comes to first time property investment, there is a wealth of loan options available to borrowers. As a first time property investor, it is important to research the different loan options and understand the benefits and drawbacks of each one.

When researching loan options, it is important to consider the interest rate, repayment terms, fees and other features such as the ability to make extra repayments or use an offset account. It is also important to consider the loan type, such as whether the loan is fixed or variable rate, and if it is a principal and interest loan or an interest only loan. Some loans also offer features such as redraw facilities and the ability to split the loan into multiple accounts.

It is also important to consider the features and benefits of different lenders. Some lenders offer specialised loans for first time investors, such as lower interest rates, reduced fees and flexible repayment terms. Others may offer incentives such as cashback or discounts. It is important to compare the offers of different lenders to ensure you get the best deal.

Finally, it is important to remember that all lenders have different credit criteria. It is important to research a lender's credit criteria before applying for a loan, to make sure you meet all the requirements.

Researching different loan options is an important step in the process of becoming a first time property investor. By understanding the different options and features available, you can ensure that you choose the best loan for your individual needs.

Consider Tax Implications

When it comes to tax implications for first time property investors, it is important to understand the various tax benefits that are available in Australia. The main tax break for investors is the ability to claim deductions for expenses related to their investment property. These deductions can include interest on your mortgage, repairs and maintenance costs, travel expenses associated with inspecting the property, and other costs related to the ownership and management of the property.

In addition, investors are able to claim capital works deductions for improvements and renovations to the property. These deductions are claimed over a period of time and can often provide significant tax savings.

It is also important to note that the profits from a rental property can be subject to capital gains tax (CGT) when the property is sold. Investors need to be aware of the applicable CGT rate as well as the allowable deductions which can be used to reduce the amount of tax payable.

Finally, it is important to consider the implications of any family law matters which may impact on the ownership of an investment property. It is always wise to seek legal advice when considering any financial decisions that involve a family member.

In conclusion, it is important for first time property investors to consider the various tax implications of their investments. By understanding the available tax deductions, capital works deductions, and capital gains tax rate, investors can make informed decisions that will help them to maximise their return on investment. Additionally, any family law implications should also be taken into consideration.

Take Financial Advice

When it comes to taking financial advice, first time property investors should always make sure that they are working with a knowledgeable and experienced professional. It is important to take financial advice from a qualified and experienced adviser who can give tailored advice on the property investor’s individual circumstances.

Financial advice should cover all aspects of purchasing a property, including investment strategies, budgeting, financing and taxation. It is important to ask the adviser the right questions and to understand the advice that is given. Questions should include:

- Is the financial advice tailored to your individual situation?
- What fees will be charged for the advice?
- What are the tax implications of investing in a property?
- What are the risks associated with investing in a property?

The adviser should also be able to provide advice on the different types of financing available, such as fixed rate or variable rate loans, and should be able to compare them to help the investor choose the most suitable option.

In addition, the adviser should be able to provide advice on the potential returns that can be expected from the investment and what risks are involved. They should be able to explain the different investment strategies that could be used and the different types of property that could be purchased.

Property investors should always ensure that they receive independent financial advice from a qualified adviser. It is important to understand the advice that is given and to ensure that the adviser is experienced in providing advice on property investments.

We understand you and we want to help

Congratulations on making the decision to become a first time property investor! It can be a complex and daunting process, but with the help of a professional mortgage broker, the process can be simplified and you can find the perfect loan to suit your individual needs.

At Ello Lending, we understand the intricacies of the loan market and are here to help you every step of the way. Our knowledgeable and experienced team are available to answer any questions you may have and guide you in the right direction.

We would love to work with you and help you make your property investment dreams a reality. Contact us today to get started.