Smarter Property Investing with Capital Wealth Property
The highly experienced Capital Wealth Property investment team takes each client through a strategic process to establish the best possible property investing strategy.
Our qualified Investment consultants analyse each individual client’s current position and create a growth strategy for financial freedom.The CWP finance team meets with the clients and establish serviceability and borrowing capacities before they come up with the best financial decision.
Property experts work with real estate agents, builders, developers and other property providers to research the best property options.The CWP team undertakes extensive due diligence and research before bringing any property investing option the table.Our property experts negotiate with vendors to establish the best deal they can get for our valued clients.
Each client looking for an investment plan is taken through a thorough process to establish an investment strategy.
There really is no right answer for this type of question as the situation is different for different people. The ability to repay the loan is a major concern. Some people own properties that are worth millions of dollars and choose to live in them without any income as they are not able to borrow a lot. Regardless of the worth of your properties, the bank always focuses on the cash flow and income when lending money. In order to obtain a more specific answer, it is recommended that you speak to an investment property expert as he is better equipped to provide information instead of your local bank manager.
If it is purchased as an investment, the returns can be even better than permanent lettings if it is rented out for half of the year or more at twice the normal rental rate. If you want it for your own holidays, then the expenses (which include the interest) will not be tax deductible, turning your property into an expensive luxury.
The golden rule of borrowing money is to borrow on assets such as properties that will increase in value over time. Borrowing money for consumables is not a good financial decision as they will depreciate in value over time. Our parents were not wrong in telling us that we should never borrow money for consumable items such as clothes and cars as they depreciate with time and are ultimately worthless. What they may not be aware of is that debt, if used on assets such as investment properties, is a powerful method of accumulating wealth for retirement.
Upmarket real estate in better suburban areas often offers better capital gains. However, the real cost is calculated by comparing the property price with the ratio of the rent. The cost refers to the amount that is paid out of your pocket each week after deductions such as taxes, tax variations and depreciation. When you buy a more expensive property, your rent return will generally be lower. However, your property will most likely increase its value in time and end up being a great financial decision.
They only see how their cash flow will be affected by the interest payments. As a property investor, your contribution to the interest is made after the taxman and the tenant have paid their shares. The amount leftover after their contributions may be as small as $50 per week on the first year. Don’t forget that your share gets smaller as the rent price gets higher over time.
If you take a look at history, properties located within 2 – 10 kilometers of the CBD often tend to offer about 10% – 11% capital growth in the long run. If your property growth is faster than this, then it is much more likely to be short term growth due to some sort of major changes to the location (i.e. improved infrastructure, etc.). The return of your property investment can be maximized by creating the best structure for your finance.
You may find great bargains every now and then. However, there are some real costs involved when you chase bargains. If you are a long term investor, you might end up spending a lot of time on a bargain hunt while the prices continue to rise. Instead, it is best to consider paying a fair market value as history has proven that you will still achieve solid capital growth. It’s never a good idea to purchase the first property you see. On the other hand, you can’t expect to find a property that suits your exact specifications. Most investment experts recommend spending at least a month, familiarizing yourself with the homes and prices in the area in which you are interested. You can ask your realtor to provide you with a list of properties. When you know what to expect, you will know when you find the right property.
Most people who are self-employed are often worried about a secure income. In reality, no job is 100% secure. The precautions that are taken when investing in properties will correspond with the risk that one attaches to their current income. A self-employed investor ought to take all the necessary steps such as disability insurance, landlord insurance, income-replacement income and mortgage repayment insurance. Taking these precautions will guard a self-employed investor against financial problems.
If you do not have the cash to make a deposit, you can use the equity you have built in your own home to make the deposit on your investment property. If you have a regular income and the security to obtain a financial loan in the form of the equity built in your own home, you will not need to make a deposit in cash and have the option of borrowing 110% of the purchase price of your investment property to also cover the Stamp Duty and fees.
In general, an accountant may be capable of answering your questions. However, it is best that you seek a specialist if you are interested in taking part in a wealth building program. Accountants are not property investment experts and therefore, may not be equipped to provide property investment advice. There are some accountants who do invest in properties and specialise on the subject. They may be able to guide you in the right direction if you are to consult them.
This is a pretty common problem!
Sometimes, banks may turn you down even though you are certain that you can afford it. Don’t let this discourage you from investing in properties. Simply consult an investment property finance expert who will create a strong application for you. In most cases, banks do not have the expertise to get the deal done.
This is not always a good idea as financial partnerships with friends and family may result in persona problems due to differences in ideas. If the investment appears to be a good one, it is best to go ahead by yourself. However, if a partnership is the only way in which you can afford to get started in property investment, make sure to have a solid agreement on your goals and to be aware of the potential negative consequences before going ahead with it.
Deciding between a house and apartment requires many personal preference and financial factors to be considered. If we take a house, one can experience better growth of capital but the property management and maintenance cost will be higher while the rental returns will be lower. In the longer term, an apartment and house can be similar in financial terms as apartments are much cheaper to own. With apartments, you may even buy more in time.
Choosing a property in the best possible location will ensure great capital growth in comparison to a property in an average area. However, returns are not measured solely by growth. If you have borrowed money employing inappropriate loans with higher than average interest rates, purchasing an investment property in a highly sought after area with all necessary amenities is not a good idea. A property that is ideally located and property financed will always be a better investment.
When the market appears to soften, successful property investments see an opportunity to purchase investment properties. Then, they take the necessary steps and precautions to ensure their ability to hold on to them for the long term for financial benefits in the future.
The Capital Gains Tax was created to encourage long term investment and to discourage short term speculators. This tax allows long term investors to enjoy tax benefits while purchasing investment properties. However, investors need not pay the Capital Gains Tax until the property is sold. Should the property be negatively geared, the tax amount will increase accordingly.
This is a very big and very real concern for most potential property investors. Currently the vacancy rates for rental properties are at about 2% which means that your property is likely to be vacant for approximately one week per year. Make sure that this is allowed in your budget. Keep in mind that there are only two factors that lead to properties staying vacant: either it is too expensive.
When purchasing within 2 – 10 kilometers of any major Australian city, you can rely on history for property values to rise. In fact, prices have shown a tendency of doubling every 7 – 10 years. It is recommended that those with a long term buy and hold plan choose property investment. The reason for this is the fact that the costs of buying and selling properties are high. History has shown that, while the prices fluctuate, they do rise on the long run.
If interest rates are low when you set up your investment, you should consider fixing them when you set up your finances as protection against rising payment costs. Keep in mind that interest rate drops generally happen before property prices rise.
This depends on where you are buying from, the amenities in the property as well as the potential tax benefits. If you look into a property on the lower end of the market, it is likely to have a higher rental yield which will result in a much better cash flow. These types of properties may also attract more tenants with their lower rent. If you wish to sell the property upon retirement, selling a smaller property will have more flexibility in comparison to selling a larger one. As for larger and more expensive properties, you will be rewarded with higher capital growth, fewer maintenance problems and enjoy better tax benefits.
The government had made a mistake in removing the right to claim interest losses from rental properties against the income they generate. Many problems were created in the rental market when investors sold up. The right to claim interest losses from rental properties was reintroduced two years later.
When it comes to interest only loans, the debt on the property is perpetual. You will retain the title to the property. However, what you should focus on is how fast you are increasing your equity. Eventually, the property’s value will overshadow the debt.