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Property Market Trend Helps During Investment |
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Written by Webmaster
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Saturday, 01 November 2008 |
By Andy09 Andy09
 Things To Consider While Investing In Property
Property investment is one of the most lucrative ways to earn extra money. Nevertheless, there are certain things, which should be kept in mind while investing in property including loan, tax, purchasing cost, drafting a plan, ongoing cost and searching a financier.
Property investment is all about making lucrative money and to do that one must know how to calculate income, expenses and returns on the investments and last but not the least developing a plan. Being capable of estimating the monetary position of the portfolio of the real estate property is particularly essential for the greatly geared property investors carrying risk above average.
Drafting A Plan
A property investment plan including the cash flow calculations in addition to scheduling of returns for a five-year term is a great tool. It will enable you to know how many assets you can pay for, margin for error and gives you a clean picture for a lender for evaluating and enhancing the chances of borrowing extra money. The four basic things to be included in a
property investment plan are:
1. The buying or the purchasing cost
2. The ongoing cost
3. The loan
4. Tax issues and depreciation schedules
Purchasing Cost
The foremost thing to consider is the purchasing cost and the ways to pin them down. The purchasing cost incurred at the time of purchasing the property includes:
1. Legal representation
2. Inspections and surveys
3. Insurance
4. Stamp duty
5. Strata title examination
6. Registration of title
7. Loan establishment fee including mortgage registration, legal and valuation fees
8. Agents commission
Ongoing Cost
These include the expenses, which take place after you buy the property including:
1. Fees for body corporate
2. Interest payments
3. Repairs and maintenance
4. Water and council rates
5. Bank account, keeping fees
6. Fees for Property management
7. Insurance including contents and building, property owner and public liability insurance
8. Pest control
9. Land tax
10. Security costs
11. Car and travel expenses
12. Postage and stationery
13. Advertising and leasing fees
Depending on property, the ongoing cost may also include gardens and lawns, linen, cleaning and laundry
Loan
Almost all the investment in property is done by borrowed money, so there are numbers of considerations while selecting the loan type according to suitability. They are:
1. Do you want to pay the interest only or principal and interest?
2. Type of loan you want to select including variable/floating rate loan, fixed rate loan, split loan, or line of credit.
3. Equity.
4. Negative and positive gearing.
Once you settle on the kind of loan and the total amount you want to borrow, it will allow you to estimate your cost of borrowing and help you in cash flow calculations
Tax
When it comes to taxes, things to consider include:
1. Identifying all the tax deductions: This includes interest payments and capital work like extensions and buildings, structural and alterations improvement.
2. Identifying the capital costs including the revenue costs.
3. Identifying the revenue costs and generally includes the ongoing costs.
4. Depreciation schedules
Financiers
When it comes to property investment, the most important thing that should be kept in mind is seeking a good financier. If their rates are viable, a nice relationship with your financier can make great dividends than sourcing the inexpensive loan. A financier can realize your property investment plan and a goal when plainly articulated via your fiscal plan is invaluable, it means:
1. If your lender has a thorough knowledge about your financial position, he/she is in a better situation to lend you extra money.
2. You do not have to go through the entire loan approval procedure since the financier knows you and your business.
Apart from this, the best place to know more about property investment whether it is buying or selling the property overseas or within your country or state is to check online. You can also find various property related news and articles online, which can further be of great help in knowing the property value or tips or precautions to be taken.
Andy is author of article written on Property news & Property markets. For more information, please visit :www.consortestate.com
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Last Updated ( Saturday, 01 November 2008 )
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