When you purchase any major item such as a plasma TV, car or fridge, you do research to learn as much as you can before you buy. Similarly, when you are considering investment, you need to do the appropriate research so you know which questions to ask.To give you food for thought, here are the top 11 questions that clients ask in relation to purchasing a property.If you have any further questions, please feel free to call us or ask one of our licensed property and finance specialists when you meet with them.

Paying the mortgage on your family home can be a struggle, so paying the mortgage on two or more properties might seem impossible for most people.You’ll be pleasantly surprised to learn that paying the mortgage on your investment property is a lot less stressful than finding the money for the mortgage on your family home. This is because after purchasing an investment property, your cash flow instantly increases through receiving rent from a tenant and you benefit from tax savings. Because of these benefits, your mortgage requirement for the investment property is much lower than your original home mortgage. If you are experiencing financial stress due to external causes such as losing your job, it’s important to be very open with the lender. Lenders aren’t out to take your home; they prefer to work with you, while working within their guidelines. As long as you are honest about your situation and you are making an effort, most lenders will work with you throughout the tough times.When setting up the finance to purchase your investment property, you should also have an account with a safety buffer margin to assist you during tough times. Your finance consultant will explain how this works during your one-on-one consultation.

Be reassured   that malicious  damage to rental property,   as shown on  sensational  footage on Current
Affairs  programs,  is  rare. There  are safeguards that you can put  in place to   protect your  investment.
The best protection is to ensure  you  get  quality  tenants.  All  licensed  property  managers work off a
database where   bad tenants are    ‘black-flagged’. It is your right as the property owner to be notified
by the   property manager   if these tenants   apply to rent your   property. Secondly, tenants pay a bond,
which is the   equivalent of   four week’s rent   as another   safeguard for the owner. Lastly, you can take
out   a   ‘Landlord   Protection Policy’,   costing around $300   per year with a nil excess for each claim.
This coves   any   damage a  tenant may   do to the   property. The insurance company will replace any
damaged   part of the property   in a   timely   manner and   cover   any loss of rent due   to the property
being uninhabitable. In addition, tax depreciation for these items starts all over again.

This is extremely important to plan for during the current downturn that causes instability in the job market and rising unemployment. It’s a good idea to organise a safety buffer account to get you through tough times. For example, an account of $20,000 bearing high interest that is accessible only when you need it will alleviate any concerns.

The answer depends on the property, the location and the type of tenant you wish to attract. Furnishing a property, if it’s in the right type of property and in the right location, can increase the amount of rent you receive on a weekly basis and also attract quality tenants. Some investors go to the extreme measure of fitting large plasma screens or cinema projectors and advertising the properties as having a ‘cinema’. If you are considering doing this, it’s very important to get professional advice as this strategy will only work in certain situations and areas. The majority of tenants prefer to rent an unfurnished property and use their own furniture, so if a property is offered furnished, you may lose a good prospective tenant. The best tip is to seek professional advice when you purchase your property so that you develop the right renting strategy.

This is a very common question and requires expert advice based on your particular situation. Some of the implications that investors fail to consider at the time of purchase are those relating to taxation, potential breakdowns in relationships, death, loss of a business with the home as security, and spousal maintenance being just a few of the issues that could arise in the future. Proper planning is essential prior to purchase to cater for any unexpected needs that may arise.

When considering a house or a unit, it’s like comparing apples to oranges. Both can be excellent
investments or dire investments, depending on the specific location and your individual financial requirements.
As a  general  rule of thumb,  it is the land that appreciates  and the dwelling that depreciates. In most
cases,   houses have a larger  parcel of land than units. More  families tend to rent houses, rather than
units for their personal lifestyle while more younger couples prefer units in the city. Overall, houses tend
to be a lower cost to hold as they do not require payment of a body corporate fee each year. Again, you
need specific expert advice on each individual project that takes into account your particular needs and
financial goals.

Both properties have great benefits for the investor – the answer depends on what you want to achieve. Generally speaking, lower priced country properties will give a positive cash flow, but will seldom give good capital growth, while most major city properties will give good capital growth and a negative cash flow for a short period of time. But, as the rents rise and the mortgage decreases, major city properties eventually become positive cash flow as well. You need to discuss this with your property specialist to develop an appropriate strategy for your investment.

If your car needs   servicing, you go to a    mechanic. If you are ill, you go to your doctor. Similarly, if
you want to rent   an investment property, you   employ a rental property expert to do the job for you.
Accredited property managers    keep up to date with changes to the    Rental Tenancy Act and may
end   up saving   you money if you   manage the    property yourself and inadvertently breach the Act.
At the end of the day, you need    to look at what you are going to    receive for your money. A single
professional property manager, when looking at the industry averages, can manage between 170 and
200 properties per month. This means that each individual property does not cost much to be managed
by a professional property manager. On average it’s about 7-8% of the rental income. In summary, some
investors choose to be the property manager even after being made aware of the pitfalls, but we r
ecommend using a professional property manager.

This is the $64 Million Dollar   Question.   How long is a piece    of string?  What sort of lifestyle do you
want? Some people are happy to retire on an after-tax income of $40,000 a   year. Others want an after-
tax income of $100,000 or more a year. There is no scale that is set in concrete to answer this question,
but let’s simply look at this from either a ‘needs’ or a ‘wants’ basis. The following example, although
kept at an extremely basic level   should give you    the answer to your question   .John is currently earning
$60,000 P.A. and is 50 years old. He would like to maintain this level of income in retirement and   plans
to leave work at the age of 60. John has good health currently and believes that he will live until he is 90
years of age (based on his family history.)The first question we would pose to John   is, ‘What if we plan
financially for   you to    live to 90 years of   age and you actually live to 94 years of age?’ How will you
continue to support your lifestyle for an extra four years? Because you don’t know how long you   will live,
we always recommend an income stream that simply does not stop when you stop working.   This gets
more into the financial planning side of things and we are more than happy to refer you to someone with
extensive experience who is licensed to assist you in this area.

At the moment, there is an extreme shortage of rental properties throughout Australia. There has never
been a better time to invest in property. Of course, your property needs to be in a good location where
there is a high demand for rental properties, as well as being close to transport, shops, schools and
employment. This is the basic criteria we use when analysing properties we offer to our clients, so you
can be assured that your property will be in big demand for rental by quality clients. Also, the property
needs to be managed by a property specialist who will ensure you get the best rental returns and
high quality tenants.

When you bought your family home, you probably needed a cash deposit of up to 20% of the purchase
price, plus costs such   as establishment fees, solicitor’s    fees, stamp duty and the like, that together
can add up to many thousands of dollars. You then had to pay monthly mortgage repayments of many
hundreds of dollars. Fortunately, it costs a lot less to purchase an investment property. This is because
if you have   owned    your own home for a few years, you   will have built up quite a bit of equity in your
property   and will have paid off some of the loan. There’s also a good chance   that your property has
increased in value too.  Instead of finding a cash deposit,   you can ask the   bank to allow you to use
equity built up in your home   as security on your investment property. You can also ask the bank to
allow   you to   add other   setup costs onto your   loan account. So you don’t need thousands upon
thousands of dollars in savings to get started.