Take a long term view to property investment Buying an investment property involves substantial upfront costs like stamp duty and legal fees, which alone can amount to several thousand dollars. Plus, when you sell the property, you’ll face other costs like the real estate agent’s selling commission, capital gains tax and sometimes advertising costs. You should usually budget for around 5-7% of the property selling price as additional expenses.
In order for you to make a profit on the sale, the value of your investment property needs to grow by more than the value of these costs and the after tax costs associated with holding onto the property. That’s why you should probably regard property investment as a long term strategy and be prepared to hold onto it for at least five to ten years. Sure, during periods of rapid market growth, you may be able to make a faster profit but this call for good research, good luck and good timing – something that can be hard to get right.
A buy and hold approach may provide for your retirement.
A sensible approach is to treat your investment property as part of your overall investment portfolio for the long term.
Contact your local Arafura Finance Broker to find out how we can help you in getting the most suitable property investment loans from our lender panel.