Tue 17 Oct 2023

ARE YOUR INVESTMENT GOALS SET?

You probably would have heard of the importance of “knowing your outcome”, Almost a cliche’, isn’t it? But like in every other aspect of life, it is a key to your investment journey.

Below are some of the things to consider before buying an investment property

Short Term or Long Term Investment

If you are a short-term investor (1 to 3 years) , you will focus more on immediate capital gains whereas if you are a game for long-term investment (6-10 years) you focus more on long-term capital growth and steady rental returns.

Age of the property

Age of the property determines how much tax deduction can be claimed through depreciation. Investors of brand new properties can avail a significant amount of depreciation, compared with investors of established properties. Therefore a Brand new property may sound more attractive to investors who are looking at minimising tax expenditure.

Type of Property

Apartments are more popular for rental yield and more popular among tenants, due to their proximity to schools, shops, public transport and better security and therefore have low vacancy rates. However, the owners should also account for strata fees that come with apartments.

On the other hand, houses offer a better capital growth over a period of time and are not always subject to regular strata fees.

Timing

Busy periods can result in quicker growth but you may also end up paying a premium price due to excessive demand whereas during the lean period growth may take a few years but astute investors may end up getting a good price due to lack of competition.

 

If you wish to refinance your current loan, need finance for a new home to live in or for an investment, please feel free to contact Isht from Reflection Finance on 043 034 0443 for a non obligatory advice