Are you considering buying an investment property? Quite often the process can seem overwhelming and frankly be frightening for those new to the industry.

As with all industries, we find that the property market comes with its own language often referred to as ‘jargon’, and this can be difficult to decipher.

If perhaps, you are new to the industry and looking at buying an investment property, we know there are some questions you want to be answered in simple, easy to understand terms.

In this article, we discuss the three most common questions which arise from first-time investors when they are looking at buying an investment property. Blacktown, Kellyville, Plumpton and surrounding suburbs are great investment options with prices set to continue to soar and rentals in demand, so look no further.

Below we cover some of the most frequently asked questions when it comes to buying an investment property and we answer them for you in plain English:

  1. What is my borrowing capacity?

Although it’s easy to think that your deposit amount will determine your lending power, it’s important to remember that borrowing for buying an investment property is the same as any other kind of borrowing and will require similar considerations.

Things like your income, employment status, assets, liabilities and credit history will be assessed to determine your current borrowing power.

We’d recommend working with a broker to help you establish what you can borrow with which lenders and what options look like the best solution for you when buying investment property.

Often you can borrow more for an investment as a prospective rental return is factored in as additional income.

  1. Can I expect additional fees and costs?

The short answer for this one is, yes.

There are fees and charges that wouldn’t occur to you unless you’ve been through the process before.

These can include legal fees, financial fees like loan application and transfer fees, insurances and registration fees.

Do your research on this prior to buying an investment property and ensure your borrowing amount/budget takes all additional fees and costs into consideration.

3. If I’m looking to use my property as an investment, what types of things will I need to consider?

We’d recommend thoroughly researching your options but, here is a brief summary of the most important topics for you to consider when buying investment property:

  • Investigate insurances that will cover the contents of the property from cupboards through to fixtures, damages from natural disasters (storms, fires etc) and also for any injuries that occur on your property (whether it be your tenant or their guest) as any claims made against you will be dealt with by this insurance policy.
  • Tenancy placement: One of the major benefits of listing with Hilton Parkes is that we take care of finding the right tenant for your property. From listing your property right through to finalising leasing papers, we manage the steps and keep you updated along the way. Blacktown, Kellyville and Plumpton have a rental shortage so we will have the pick of the best tenants. Contact our experienced rental department today if you would like some help with finding the right tenants for your investment property.
  • Usage payments: As an investor, you will be responsible for sewerage and water connection prices but from here on in, the tenant will be responsible for their own water usage and therefore the payments required.
  • Additional financial benefits: Another overlooked consideration when buying investment property is the additional benefits you’ll receive at tax time.

Your investment property will require depreciation schedule when purchased so that you can claim this back on your tax as soon as possible.

Of course the above is intended as a guide only and we recommend that you should undertake plenty of research as you start your purchasing journey.

If you are looking to buy, sell or rent in Blacktown, Kellyville, Plumpton or surrounding suburbs give our specialists a call, we can help you through the process, step-by-step.

Phone: 02 9832 3211 or 9629 7888.