Selecting the right Property

Selecting the right Property

A Perfect Match – your Fingerprint and a Property?

Selecting the right Property to invest in is not as easy as just going down to the bank or the real estate agent and asking them for an investment property.

As professional property strategist I’ve viewed thousand of properties and worked with hundreds of Clients and found the main consideration is to match the property with their Financial fingerprint. This your ideal property match.

By matching the right property investment to your financial fingerprint the property investment will work for you to create future wealth rather than being a financial burden like many investment properties become.

So how do you go about selecting the right the Property to match your Financial Fingerprint? Well it starts with asking a series of questions. Here are the starting ones that I use when finding the right property investment for a client:

Finding that Perfect Match

What type of Residential Property Investment will best suit the investment I am looking for?

• House
• Duplex or
• Townhouse.

What are the running costs that should be included in the initial investment analysis?

• Interest costs
• Insurance
• Rates
• Water
• Strata and
• Body corporate.

Does the potential property have Rental income that …?

Is strong because tenants would love to rent the property (location, facilities)
Has the possibility of future rental increases

What amount of depreciation can we use from this investment to reduce taxation from the…?

Loan Cost

• Fixtures and fittings of the property
• Building of the Property

What is the Building and Land Ratio?

• The size of the Building determines the Building depreciation and the rental income.
  So a bigger building eg four bedroom vs three on the same size land, will generally provide more rent but the building depreciates faster
• The size of the land determines the capital growth and how much land tax you will have to pay.
  Its the land value that increases over the time (Capital gain) not the value of the building value. So a bigger block usually will pay more land tax.

What Land Tax is payable?

• Building and Land Ratios and the associated Land Taxes vary greatly state by state
• Each State has different land tax thresholds some have none.
• Company and Trust structures have no thresholds at all
• Joint or individual thresholds vary as well in some states

Once I have the answers to these questions, I can then do a detailed analysis to find the that best property that matches the financial needs (or financial fingerprint) of my client.

Want some more help?

If you want a copy of the above checklist, just email us at help@mirren.com.au. For more information on how to calculate your Financial Fingerprint so you are “investment-ready” check out our Financial Fingerprint resources page.