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Top Five Signs You’re Primed to Buy Your First Investment Property

If you’re thinking about buying an investment property, it’s important to ensure you’re ready. Whether you’re skipping your first home and heading straight into property investment or already own a family home and looking at buying your first investment property, it’s crucial to consider several factors.

At NDIS Loan Experts, we assist everyday Australians and first-time property investors to access the money they need to invest in Specialist Disability Accommodation (SDA) property. Here are the top five signs that you’re primed to buy your first investment property:

1. You’ve established financial goals

Setting concrete financial objectives may signal your readiness to invest in property. Many individuals reach retirement age only to realise that their savings and superannuation fall short of supporting their retirement. If you’ve reached a stage where you’re serious about crafting a wealth plan or eager to start supplementing your employment income with investment income, you’re likely in the right mindset to contemplate property investment.

2. You’ve got financial management and budgeting down pat

Effectively managing your finances is paramount when entering the property investment arena. Owning multiple properties entails both upfront and ongoing costs such as stamp duty, legal fees, mortgage or investment loan repayments, and managing annual rental income. Before diving in, creating a budget and learning to live within your means is crucial, allowing you to accumulate spare cash and build long-term wealth. While property investment involves more costs compared to traditional savings accounts, you access the potential to earn more than cash savings as property may offer both income generation as well as capital growth potential over the long term.

Engaging in property management also comes with additional responsibilities and financial administration and considerations such as:

  • Employing a property manager, including paying property management fees.
  • Different tax implications such as stamp duty, tax deductions against the total rental income and capital gains tax.

3. You’ve got a grasp of the property investment market

It’s important to recognise that Australia boasts various property markets. As a prospective property investor, chances are that you’ve started looking into residential real estate investment, commercial property investment, and Specialist Disability Accommodation investment properties. Understanding what you’re looking for in an investment property (what is going to meet your financial objectives), as well as understanding the different dynamics between the different property investment options on the market, will help you narrow down your selection and allow you to hone in on researching suitable properties.

Top tip: Don’t forget to look at rental demand and rental prices when comparing the purchase price of potential investment properties.

4. You’ve set your expectations and investment strategy

Property investment typically involves a long-term commitment. While identifying growth potential in specific areas is essential, it’s equally vital to have a comprehensive plan for building your property portfolio over time. This may include strategies like renovations, investing in subdividable properties to create equity or in multi-income properties such as apartments, duplexes or SDA properties. If you’ve already determined your investment strategy and are exploring ways to acquire a property, it’s a clear sign that you might be prepared to take the plunge.

Understanding the expected rental income that’s likely from a property and its ongoing costs and expenses will help you determine if your investment is likely going to be positively geared or negatively geared.

5. You’ve sourced adequate funding

Accumulating a substantial deposit can be one of the most significant hurdles for those entering the property market. For those who own existing property, such as a business premises or family home, chances are that the recent rise in property prices may have built some equity in the property value of your existing home, which may improve your borrowing power for an investment loan. Your personal circumstances will largely drive your borrowing capacity, such as whether you have kids, are single, or part of a couple, and your sources of income.

If you’ve done your homework and know that you have the means to adequately fund an investment property, then this may be a good sign that you’re poised to buy your first investment property! Don’t forget to reach out to NDIS Loan Experts for help determining your borrowing capacity.

Working with NDIS Loan Experts for your first NDIS investment property

SDA housing was introduced under the National Disability Insurance Scheme (NDIS) to provide adequate accommodation for Australians with disability who require specialised housing. NDIS property investment was made available to private investors to assist in funding the NDIS sector to ensure that NDIS participants requiring specialist disability accommodation could access a forever home.

To understand the unique financing requirements for an NDIS property investment loan and to understand more about how you may be able to access a unique property investment with government-backed returns, contact the team at NDIS Loan Experts.

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