Invest and retire in luxury … that’s the dream but there are many traps for the unwary player.
Successful investors are either very lucky or they have surrounded themselves with quality advisers. There is simply no middle ground.
Successful investors are also avid researchers and the types of people who ask a million questions before making a commitment.
Investing can bring great benefits offering regular income, capital growth and tax benefits. Over time a well-managed investment property can give you real benefits.
The six key areas of successful investing are:
RESEARCH – Find out the growth areas and hot spots in the market. These areas will offer you greater return and usually have a high demand, making vacancy rates minimal.
ESTABLISH A RELATIONSHIP and ongoing communication with an experienced Property Consultant as some of the best opportunities are not always advertised.
CHOOSE LOCATION AND TYPE – After you have chosen the type of investment you are looking for, residential, commercial, industrial, retail etc. then choose the location you are looking for within your hot spot suburb.
HIGH MAINTENANCE PROPERTIES – These should be avoided unless you want to add value to a property by renovation.
YOUR ACCOUNTANT OR FINANCIAL ADVISOR – You should speak to them about the benefits of negative gearing your investment property for maximum tax advantage.
LONG TERM INVESTING – Be aware that property is a long term investment offering solid capital growth. If wisely chosen a good investment can essentially pay for itself in the present and provide a great nest egg for the future.
Your advisers are not necessarily good just because they have a shingle or degree. Quiz them extensively – after all it’s your money. For example, ask them how you can reduce stamp duty by buying an industrial or commercial development off the plan. This is a biggy.
By buying the land component of a commercial development and funding the balance (building component) during construction, the stamp duty is calculated on the land value rather than the end value of the investment, substantially increasing the initial yield on the investment.
Stamp duty on a property purchase can often be greater than 5% of the purchase price, so any savings achieved on this tax can be extremely worthwhile.