24 minutes | Oct 23, 2017

Financing an Investment Property - EP58

Perhaps the most accessible way for the ‘average person’ to build wealth is through investment property. But before you can purchase an investment property, it is important to fully understand both your financial position and the true income potential of the property itself. Today, Toni speaks to the concept of investment property as a means of accumulating wealth, both historically and in the current financial climate. She explains the considerations behind compulsory superannuation and the taxation benefits available to people who own multiple properties. Toni goes on to cover capital growth, explaining its advantages over earned interest from a savings account, for example. She discusses the three ways an investment property generates income, including rental return, capital growth, and negative gearing, as well as how your stage in life affects decisions in each area. Toni also walks through the expenses you must factor in to calculate your true rental return, such as maintenance, owners corporation fees, and vacancies. She wraps the episode by stressing the significance of understanding what you can really afford before you start looking for investment property and doing the math for repayments, should interest rates rise. Listen in and learn how to look at the numbers as you explore the possibility of building wealth through investment property! Topics Covered How investment property helps the average person build wealth Why the government established compulsory superannuation The government incentives in place to help people buy investment property The benefit of capital growth The three ways an investment property brings in money Why you cannot count on income from negative gearing How your stage of life affects decisions around rental return vs. capital growth How to calculate true rental return The need for a maintenance plan How to budget for vacancies The importance of understanding your financial circumstances The rise in Melbourne property values over the past 100 years The decision to sell or borrow against increased equity to buy additional property How to calculate your repayments should interest rates increase The rules around increasing rent for tenants Learn More About Financing an Investment Property Read Toni’s blog post, Know Your Numbers, at http://planinsek.com/know-your-numbers/. For detailed information about understanding your financial position, take a look at Toni's Worksheet! If you have additional questions or suggestions for future podcast topics, email Toni at toni@planinsek.com, and take advantage of her resources for beginners in real estate at planinsek.com. Additional information regarding Toni’s real estate business can be found at planinsekproperty.com.au, and her business email is toni@planinsekproperty.com.au. To subscribe to the podcast, please use the links below Click Here to Subscribe via iTunes Click here to Subscribe via Stitcher (Android users) If you like the show, please consider leaving the show a review in iTunes or Stitcher. A couple minutes of your time can help the show immensely! Thanks!
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