Considering a Move into Property Investment?
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The high property ownership rate in Australia would suggest that people believe that investing in ‘bricks and mortar ’ is a safe and great way in which to build capital over time. History has shown that property prices generally rise over the medium to long term, although history is no guarantee of future price growth, it has offered people a comforting benchmark for future growth opportunity.
In this issue, we look at a number of different things you should consider before making a move into property investment.
If you’re considering an investment in property as the way for you to build your financial wealth and finance your later years, here are a few things you should consider first.
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Understand the benefits of investing
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While history has demonstrated growth in medium house prices over time, as evidenced by Residex data, this is no guarantee of future price growth. Growth in property is largely determined by supply and demand, the higher the demand for limited property the greater the potential for competition and hence price growth. Supply and demand can be influenced by a number of factors, including but not limited to, interest rate movement, unemployment rates, population growth, housing supply and consumer sentiment
Investing in property can be an appealing choice for Australians who are choosing to put the property up for rent, whereby the tenants’ rent payment can assist in servicing the mortgage on the property.
If you have decided that property investment is right for your personal circumstances, it is important to do your research and make sure that you select an area with the potential for strong, steady growth and increased value.
A growth in property prices is generally influenced by three key factors:
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- demand exceeding supply
- investment affordability
- positive market sentiment
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The lower interest rates currently being experienced in Australia and ongoing growth in property prices means that investing in property may be an affordable venture and one which, assuming that you invest wisely, should yield good returns over the longer term.
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Move in before the ‘boom’
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If you’re considering an investment in property and see it as a good way to support your financial future (i.e. your retirement), then making a wise, researched investment can help set you up for a promising financial outlook.
If you have talked to your financial planner and have decided that investing in property is right for you, then now could be a good time as interest rates are still comparatively low.
Being prepared and ready to move into the market before it ‘booms’ will also help you to maximise any return on your investment property.
However, three of the most important things to do before you get started are to:
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- Talk to your financial planner to see if investing in property is appropriate for you.
- Do your research to find out which property areas within your budget look like they may be poised for growth, and whether they fit your investment goals, ie solid growth, strong rental return etc.
- Do the maths and get your finances in order.
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Know your limits
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It is vitally important that you understand how much you can afford to borrow, your own outlay (i.e. against equity in a current property or via a saved deposit), the price range that you can afford to consider, your repayments over the life of the loan as well as any likely concessions, anticipated costs and out of pockets etc.
RAMS has been helping first time property investors with their finances for many years. This means that we know most of the ‘ins’ and ‘outs’ you’ll need to be aware of and can help you navigate the road to property investment.
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Find a home loan that supports your investment goals
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A RAMS Home Loan Specialist can help you select a RAMS investment home loan that suits your needs. RAMS has a range of home loans to suit property investors.
For instance, the RAMS IO (Interest Only) Maximiser Home Loan may be the ideal home loan to help you get your investment portfolio started. The IO Maximiser Home Loan offers a low variable interest rate plus up to 10 years* interest only repayments, which can help you to minimise your outgoings and make your money work harder.
So, why not call RAMS today to find out more about our property investment home loans, what we can offer you and the best way to get started? Contact RAMS today!
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*10 year Interest Only (IO) option available for investment purposes. Interest only repayments mandatory for the first 10 years. Fees, conditions, limitations and lending criteria apply.
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