• Investment Guidance

Investment Guidance

One of the best ways to increase you returns monthly is by investing in property. This can be a reliable source of income, which tends to increase every year. ACT is one of the best areas to invest in due to the steady growth over the past few years with many people relocating due to work and studies.

Importance of Being Well Informed

When purchasing an Investment property in the ACT, you can set it up in 2 ways. The way you decide to set up your investment portfolio all depends on your income and your disposable income.

1 Positive Cashflow property

This is when the profit you make from the investment property exceeds the cost of owning and maintaining the property. The property will be operating at a profit which means it will have a positive rental yield. When values rise, rental yields contract, which makes it more difficult to establish and maintain a positive cashflow investment property in the ACT, due to the constant increase in property values in the ACT.

2 Negatively Geared Property

This is when a property runs at a loss it is said to be negatively geared. This is due to the interest on the home loan being higher than the rental income received. In this instance you can benefit from the tax deductions, making this attractive to investors making use of the capital gains. This in turn allows investors to alleviate the loss by receiving the tax breaks, however providing a profit in the long run. This is a popular method with most investors in the ACT as values of properties have risen rapidly over the past few years.

When purchasing an investment property is important that you have done the necessary research. It is suggested that you that you enlist the services of a trusted financial planner, mortgage broker and solicitor. They can help guide you achieve your goal with as little drama as possible. It is also important that you aware of all unavoidable fees and taxes when purchasing an investment property in the ACT. Some of the fees you will have to pay are stamp duty and land tax. There are certain tax deductions you may be eligible for eg. Property management fees, maintenance/repair costs, legal and mortgage fees.

Some of the websites to visit to get a better understanding of the above are:

  • ACT Revenue Office
  • ACT’s Guide to Conveyance Fees
  • Australian Taxation Office