Property Investing: 9 things to keep in mind

27th Apr, 2017 | Local News

In this article:
Starting out as a property investor: Carol tells you the top nine things to keep in mind.

Carol Russell

At Yellow Brick Road Castle Hill we know there are many reasons to own investment property: you might want an asset for retirement, you might wish to rent where you live and own a property elsewhere, or property might be your choice of wealth-creation. Regardless of your reasons for investing, there are a few things need to keep in mind:


  • GOAL: Be clear about what you want to achieve, and by when. Before you buy a property, you should decide on your earning goals: will this be a negatively or positively geared investment? Will you invest in renovations to increase your rental return? And in what time-frame should I achieve these objectives?
  • BUDGET: Write detailed plans about what funds you have available to spend, how much you will think you will need to borrow, and what those borrowings will cost. Be sure include the cost of renovating, repairs and maintenance as well as the predicted costs of management, insurance and rates. And then calculate rental income. If you need help determining your budget, make an appointment with one of our friendly advisers at Yellow Brick Road Castle Hill today.
  • RESEARCH: Do your research before you buy a property. Visit real estate agencies in the area and pick up their ‘for rent’ sheets. Try to get an idea of what rents are being asked for what kind of properties. Consider asking agents what properties they would like to manage. Go to some open days. Get a sense of which agents are on top of their game.
  • INSPECTIONS: If you’re buying a place to rent to others, basic things must be in perfect order that you might’ve let slide if you lived there yourself. Always have an inspection done by a qualified expert.
  • TAX ADVICE: don’t rely on casual barbecue chatter for your tax advice. If you intend to negatively gear your rental property, and claim the loss you make against your taxable income, then you should be advised by a solicitor or accountant like your local Yellow Brick Road Castle Hill mortgage broker or adviser.
  • FIXED OR VARIABLE: Budget a scenario for a fixed rate and a variable rate. Fixed rates are currently very low, and give you interest rate certainty for two, three or five years. But variable rates provide you with flexibility. Many lenders allow you to split your mortgage between fixed and variable. If you’re unsure of the type of rate is best for your situation then make an appointment with your Yellow Brick Road mortgage broker as we can easily compare rates these rates for you.
  • RENOVATION: Do your best to assess the renovation requirements before buying the property, and put these in your budget. Don’t get carried away with renovations – stay within your budget.
  • INSURANCE: Landlord insurance is imperative and you should contact a broker if the inclusions and exclusions confuse you. Renting property is a business and some of the features of landlord insurance might not be familiar. It’s vital to get this right as it can save you in the long run. Speak with your Yellow Brick Road Castle Hill adviser today to find out more.
  • MANAGEMENT: There’s a clear choice. You either decide to manage the property yourself, doing basic maintenance and repairs. Or you use a managing agent who will charge a percentage of the rent. DIY managers of property can usually do the handiwork, but inexperienced owners usually stumble on tenant law and collecting rent.

Investing in property is an excellent way to build wealth, but it should be approached like a business. Have a goal, have a plan, and stick to your budget. And remember, its always best to get some expert advice before you buy, so speak to one of our advisers at our Yellow Brick Road Castle Hill branch today.

Good luck!

We have you covered on all stages of your property journey