Why Residential Property Investment?

Why Residential Property Investment?

It could be easy to dismiss residential property investment for a number of reasons, not the least of which is the question of capital growth, security of the tenant, management of the investment, and comparable alternatives.

This said, there is an opportunity to invest in residential property that can give you:

  • The ability to repay your own home mortgage significantly earlier than you previously thought possible with little or no additional cash outlay than you are currently incurring
  • A more stable and higher quality tenant
  • Potential for capital growth
  • Possible significant taxation advantages

Investing in a rental property for beginners is a daunting task. Buying an investment property to rent requires expertise, at least you must be familiar with the location and other available facilities nearby. Most of the tenants look for a good location with schools, hospitals, and other facilities nearby, therefore, it is necessary to explore the locality before buying a house to rent out.

PROPERTY TENANCY?

The tenant-friendly commercial and residential properties are completely finished with high-quality carpets, drapes, light fittings, dishwasher, lawn sprinkler system, gas fires or heat pumps, underfloor heating, automatic garage door openers, and security system. Hire a property management company or a property manager to simplify the process.

The rental properties management company will in all cases complete a rigorous check on each prospective tenant.  In addition, the property manager conducts four on-site property inspections per annum.

There is a contracted lawn mowing and gardening service to ensure the grounds of each rental property are maintained to a high standard. The contractor reports back to the rental property manager if there are any tenancy irregularities.

FINANCE AND TAXATION ADVANTAGES?

Prior to acquiring a property, you will need to have your current financial situation thoroughly assessed to ascertain if this opportunity will meet your residential investment and risk management objectives.

Some of the real estate management companies offer the most effective structure possible to maximize early debt repayment and taxation opportunities.

Most rental property ownership costs (ie. rates, repairs, insurance, mortgage interest, management, etc) are tax-deductible on an annualized basis. The rental property manager can arrange for Chartered Accountants to apply for a special tax code to be put in place on your behalf with the Inland Revenue. This should increase your take-home pay and these funds are then used to accelerate the repayment of your mortgage.

WHAT ARE THE POTENTIAL RISKS OF RESIDENTIAL INVESTMENT?

What happens if I die or get sick?

Your rental property manager consultant will discuss and if required arrange appropriate insurance to cover any financial risk associated with early death or loss of income through sickness or accident whilst there is still a mortgage on the property.

What if I lose my job?

Each investor must assess their own circumstances. However, most property managers do not require that you pay anything more than your current mortgage and the flexibility of their package will allow for a short-term rearrangement, though you will lose the taxation offset until you are re-employed.

What if interest rates change?

Interest rates can fluctuate but there is sufficient flexibility in the real estate management company to accommodate higher interest costs though the repayment period will take longer.

If interest rates drop then the mortgage will be repaid earlier as repayments should remain constant.

What happens if I can’t get a tenant?

Because you have a high-quality home in a high-demand rental locality, the likelihood of no tenant is very low. However, all that is required to procure a tenant is to "meet the market". A competitive reduction in rent will only extend the term for repaying the mortgage.

What happens if the property is damaged?

Your property consultant will arrange a landlord's protection policy specifically written for the residential rental property investment. The policy provides for comprehensive dwelling and contents insurance coverage.

What happens if the tenant defaults?

Your rental property management consultant will arrange a landlord's protection policy specifically written for the residential rental property investment. The policy provides for tenancy default and tenant absence from buying an investment property.

Is the rent guaranteed?

No, however as rental property managers are only building in high-demand subdivisions in researched areas of the market most of the property managers have to date not experienced any difficulty in buying a house for rent out on completion. Rent may rise or fall with the market. There is sufficient flexibility in the real estate management packages to accommodate lower rent. However, the repayment period will take longer.

Will I enjoy capital growth?

Property managing companies are not dependent on capital growth.

However, on its fundamentals (ie. high-quality property, desirable locality, strategic geographic locations, etc) one would expect some capital growth to enhance the outcome.

PROJECT MANAGEMENT ADVANTAGES

  • Financial flexibility to accommodate adverse events
  • Insurance to protect against unforeseen financial events
  • Building company's quality assurance complete with up to a 7 year Master Builders Guarantee or a 5 year Certified Builders Guarantee
  • Attractively priced land and building packages with volume discounts rebated to the purchaser
  • Rental Property managers act as the coordinator of all the services and oversee the program

About Us

HelpOnProperty is a real estate investment company that helps you to find your next money-making project. Once we find a good investment property that gives the best returns, we immediately list it for our investors. Whether you are a first-time buyer or an experienced investor we help you in making an informed real estate decision in today's market.

Get In Touch

  • info@helponproperty.in
  • 1800-890-2098

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HelpOnProperty does not guarantee any return to any person on the investment in any property listed on our website. Any decision to invest in real estate involves significant risks and may result in the loss of your capital. Make real estate investment decisions only after seeking independent legal, financial and business advice.