Choosing the right investment property for you

Published on June 17th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Owning an investment property may be one of the many pies in which you would like to dip your fingers in, but do you know what type of investment property will be suitable for you? With so many options on the property market to invest in, knowing the types of property and the responsibilities that come with it can help you decide if it is suitable for you.

Working what you have

There may be 2.03 million property investors in Australia owning on average 1.28 investment properties per investor, but there are not many Australians who have enough startup capital to own an investment property. For people who are looking for a way to set a foot in the investment property sector could consider carrying out a renovation project. Carrying out a renovation project can be a good investment in the long run when it comes to selling your house. Always keep in mind to call in the professionals when its necessary to ensure that you do not do more harm than good to your property.

Commercial property investor

When it comes to investing in commercial property, which can be done through a business or an investment group, it is vital that you asses all factors. This means looking for a property that has a good return on investment, and the risks that come with it. This means conducting market research to see how properties around the building you are interested in are performing to get an idea of where it is headed. You may also want to check how it will affect your finances.

Residential property investor

People who are interested in investing in residential property are people who are looking to purchase a secondary property in which they are planning on renting out. Before taking the official leap when it comes to investing in residential property means looking beyond the purchase price. This means checking the ongoing cost such as council rates, insurances, rental management, legal fees, maintenance, and other expenses that come with investing in such properties.

Other considerations

In the end, your finances will determine what type of investment property will be right for you. There are common investment property mistakes to avoid, but it is vital that you speak to a financial advisor to know what will be suitable for you. According to ATO, 2 out of 3 investors were negatively geared or reported a loss on their income. One of the many reasons that investors fail to turn a profit from their investment is not having adequate cash flow to manage their expenses.

Before making the important leap, it is vital to check if you will be able to afford the property in the long run. This can help you avoid biting off more than you can choose when it comes to investing in property.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well as others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

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