Are you ready to take a step onto the property ladder this year? Are you trying to grow your portfolio? Understanding how to strategically search for investment properties is the most important element of being a successful property owner. Here are BMT’s tips for finding the perfect investment property in 2022.
- Do your research
Investment properties are only as good as the area they’re in. In order to have a valuable, and hopefully profitable property you need to do the research even before you start looking at specific homes.
Look at everything that may impact the value and desirability of a property. Factors to consider include price, property type, market trends as well as location characteristics such as demographics and employment rates. Are there schools in the area? Is the local infrastructure expanding? Doing this research will help you in the long run and ensure you are searching strategically.
- Utilize the tools available
There are extensive tools available to find the perfect investment property. The trick to using these effectively is identifying the ones that are reliable and backed with comprehensive data.
PropCalc is a good example. This free tool is the essential cash flow calculator for anyone looking to buy a property. It shows you exactly how the purchase will affect your cash flow, produces comprehensive property reports, and analyses key suburbs data.
- Make it attractive for your tenants
Who is your ideal tenant? Are you looking for a long or short-term lease? These are important things to know from the beginning as they will impact your overall search and the type of property you go for.
Your property manager or real estate agent will be able to provide information on what tenants in the area are looking for. This can help you narrow down your property pool, ascertain how successful your first-choice property will be in the area, and make any search adjustment where necessary.
- Understand and set a realistic long-term plan
Do you have a game plan? Property is generally a long-term investment so you can’t expect to see immediate capital gains.
You need to put together a plan that focuses on your specific investment strategy, as this will ultimately determine the property you purchase. For example, your strategy could hold a range of objectives including portfolio diversification for risk minimization, favoring long-term gain over short-term rental yield, or visa-versa.
Changes go hand-in-hand with long periods of time – this means your property journey mightn’t always be linear. Therefore, it’s essential to have an agile plan in place that allows for the unexpected.
- Consult with a depreciation specialist
Claiming tax deductions on investment properties is one of the easiest and most effective ways to reap the benefits of property investment. Unlike other tax benefits, with depreciation, you don’t need to spend money to claim deductions.
Depreciation is the natural wear and tear of a property and its assets over time. As one of the highest deductions out there, depreciation can boost your cash flow by thousands of dollars in just one year. This isn’t a one-off deduction either, as you can claim depreciation for up to forty years on a residential property.
BMT Tax Depreciation has prepared over 700,000 tax depreciation schedules over the past twenty-four years. The expert team can provide obligation-free depreciation estimates for all types of investment properties, so you know how much you can expect to claim before making the purchase.
To find out more about property depreciation contact BMT Tax Depreciation on 1300 728 726 or Request a Quote.