Sydney is ranked in the top five best cities to live in worldwide, making it one of the hot choices of investors right now. Buying a property in the city can offer you a good return on investment, but it can, of course, also be daunting.
In this article, we’ll dive into how you can invest in property for rent in Sydney–investing in property requires research, knowledge, and strategy.
1. Analyse Your Cash Flow
Before investing in a property, understand how much money you have to invest. List your assets, income sources, and expenses, and assess how much money you can afford as a deposit. Usually, you need to have at least a 20% deposit to borrow money from banks and other lenders.
2. Contact Your Bank for a Pre-Approval
After sorting your cash flow and budget, contact a bank or a mortgage broker to see how much they would lend you and what the interest rate will be. We recommend you get pre-approval of the loan so you’ll have more clarity about what type of property you can afford. Make sure you also consider the structure of your loan and take advice from professionals.
3. Define Your Goals
Before making any investment decision, you should define your goals. What do you want to achieve from these investments? To get more clarity on what’s possible short-term and long-term, talk to an accountant and financial advisors.
4. Understand Taxes
When it comes to purchasing property, you need to understand how investing in real estate will impact your taxes. Talk to your accountant to figure out the best investment for you. If you’re contemplating renting your property, make sure you also consider if it’s better to rent or buy in Sydney.
5. Hire a Lawyer
Many investors find the documentation process of buying a property complicated and tiresome and hire a solicitor or a conveyancer to handle the purchase. Having the support of a legal expert makes the process easier and smoother.
6. Build a Property Evaluation Model
After talking to the bank and a variety of experts, if you’re still not sure what type of property to buy, it’s time to create a property evaluation model.
Identify the most important thing for you in the property investment. What type of building are you looking for? Does the type of building or location matter more? Are you interested in renovating the building after the purchase? Knowing the answers to these questions will help you get more clarity and make the right investment decision.
7. Look for a Property
Before buying a property, invest a good amount of time in research. You can talk to a local real estate agent to see which properties are for sale; you can also visit property listing websites and apps like Soho to find listed properties. Don’t make a decision on a whim—look for maximum return on your investment.
8. Hire a Property Manager
After buying a property, you can hire a property manager or manage your property yourself–the decision is all yours. Property managers can cost you about 10% of your rental income, but it’s up to you to decide if that investment is worth it.
9. Stay Updated
If you make rental investments in Sydney, stay updated about market trends. Start learning about price and demand fluctuations, and keep your eyes out for changes in areas like transportation infrastructure and major city developments.
Investing in rental properties can be tricky and time-consuming, but it can also offer a good return on investment. If you want to diversify your investment portfolio by investing in rental properties, download the Soho app to find the information you need, from prices of houses in NSW to the cost to rent a beach house in Sydney.