Getting the right advice is imperative. You can read hundreds of articles about the benefits of owning a rental property, but it is important to conduct a property analysis and consider all factors including your current and future situations.
What are some of the factors that people need to consider if and when they have a rental property?
Consider instances where you go down to one income and how it will affect your ability to pay all the bills. If your rental property is untenanted for 10 weeks, how will you cope with the lack of income? Also, consider property being damaged either by natural disasters or current tenants and if interest rates continue to rise above and beyond your means.
How can investment property owners alleviate the risks involved in owning their properties?
They can mitigate all these risks by having landlord and building insurance for damages, ensure they have income and life insurance and making sure not to buy a property at your maximum borrowing capacity.
What does a negatively geared property mean?
Negative gearing can be achieved by having a property that costs you in interest, rates, insurance etc. more than what you receive in rental income. For tax purposes, depreciation and building write-off on the property also reduces your profit to a negative figure ensuring you do not pay any additional tax.
There are many other factors to take into account when considering an investment property. Always seek advice to determine if it’s the right investment for your financial circumstances by speaking to your accountant or financial adviser. Call Plant & Associates on 1300 783 394 to receive your FREE initial consultation.