Deciding to tackle the world of property investment can seem like a daunting and rocky path to passive income but if it’s done correctly, it can truly be a great experience. Figuring out whether an investment property is right for you and your situation is very important.

It ultimately depends on what you want the outcome to be. Are you looking for a starter property to help you invest in more real estate down the track or is this just a one off? Will you at any point call the property home or is it strictly for business purposes?

These are just a few questions you need to ask yourself. Remember to keep yourself up to date with market trends, interest rates and always consult an expert like one of our advisors if you’re unsure.

There are a few ways you can help yourself decide whether an investment property is for you. Are the costs going to outweigh the profit? This is really important with an investment property! Is the weekly or monthly rent going to cover mortgage repayments, potentially a property manager as well as other maintenance expenses on top of all that. If your repayments are fairly steep you will have to accommodate that with a high rent which could mean fewer interested renters or a shorter lease. Calculating what your monthly expenses are going to be is vital in deciding whether or not a property is right for you.

Although it is called passive income you are going to actually have to do some work, even if you do hire a property manager. Of course, there are pros and cons to both options, but ultimately you have to decide whether you want to have control of your property or simply let the manager do their thing. Figuring out if you have the time or not to dedicate to an investment property is another issue as you will have to make decisions and respond to communication about maintenance, tenants and upkeep.

An investment property isn’t always a sure bet. It has the potential to be a money pit, but on the other hand if you are prepared, knowledgeable and open-minded to possibilities then investing in property is a magnificent way to earn extra income and build your wealth.

Don’t leap at the first property you see, make sure you know the area and market you are buying into and keep our phone number handy if you have any questions!