It’s no accident that more and more home loans in the Rockingham area are being written for investment properties. A lot of Australians are taking advantage of current regulations regarding self managed superannuation funds (SMSFs), using SMSFs to build investment portfolios. In addition, many younger families are making lifestyle sacrifices in order to invest in their futures.

For example, a hypothetical couple in their 30’s starts buying rental properties. They choose their properties wisely and within a few years have multiple properties and are turning a profit of $3,000 a month. Instead of spending the profits, they choose to reinvest in a diversified investment portfolio. By the time they are 55, they will be able to retire very comfortably.

If you think this sounds too easy, you’re right. It isn’t automatic and you will have to do your homework. However, if you pay attention to the right things and do your research well, you can amass a handsome portfolio much faster than you think. Here are three things to watch out for.

Major Repairs

Do you have enough money to cover a major repair such as a roof or a new heating and cooling system? The more homes you buy, the greater the odds that you will have to make at least one major repair in your lifetime. Make sure you have the funds.

Can You Manage Your Property?

Are you capable of property management fundamentals such as being available for maintenance at all hours of the day or finding high quality tenants for your home? You need your home rented every week of every year if possible and you need tenants who won’t degrade your property. If you can’t do this, find a property management firm.

Rental Income vs Capital Growth

Rental income is important, but long term capital growth is where you will make your best money.

Smartline Rockingham

If you are interested in buying an investment property, call (08) 9527 1800.