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Getting started in property investment

If you’re thinking about buying a property as a long-term investment, there are a number of factors to consider. Some of the key considerations to help you include:

The first step is to assess your financial goals and the reasons you’re looking to invest in property. Do you want to use property as a retirement savings option, earn an income from rent in the near future, or sell down the track and benefit from capital gains?

Being clear about what you want to achieve and the timeframe around these goals will help you make informed decisions around what property to buy and how you should structure your investment home loan.

The cost of owning an investment property can be very different to owning a private residence, so it’s important to understand how much you can afford before you buy. You’ll need to consider repayments on your investment home loan (for times where rent doesn’t cover the mortgage), repairs and maintenance, advertising for tenants and more.

If you already own a private residence you may be able to access the equity you have in your home to use as a deposit for an investment property. Finding out how much equity you have can help you decide how much you want to spend on your investment property.

Borrowing to invest in property offers a range of potential tax benefits, including expenses associated with the property and interest paid on your investment home loan. If your expenses are greater than your income, you may be able to offset these losses against other income as a tax deduction — known as negative gearing. Understanding how gearing and taxation works can help reduce your tax and grow your wealth.

Now is the time to speak to a home lending specialist, accountant, financial planner, solicitor or conveyancer and get their professional advice on how to start investing in property. Getting the right advice can make a difference to your overall returns and help you achieve your financial goals.

Next article: Should you buy an investment property?

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