Let’s face it…Australians love property. We’re certainly not alone here in our affinity to bricks and mortar.

 

Buying new property in Australia can be a highly tax-effective strategy to grow your asset base. This often involves buying ‘off-the-plan’ properties and requires a great deal of research.

 

Below we share our top 8 tips to read before you proceed with your property purchase:

 

  1. Work with an investment-savvy mortgage broker

 

It’s important that you have the right financing strategy in place for your investment property, particularly given that you’re going to be largely utilising somebody else’s money (i.e. the lender) to grow your wealth. By partnering with an investment-savvy mortgage broker, you can ensure that your financing structure is appropriate based on your current situation and financial objectives.

 

  1. Research the builder / developer

 

Do your own due diligence on the developer or partner with an adviser who can carry out this research on your behalf. It’s important that the developer has a proven track record, completes projects on time and builds to a high standard.

 

  1. Quality of the fixtures and fittings

 

Generally speaking, a developer that builds high-quality properties will utilise higher quality finishes. This will attract higher depreciation benefits for you as the investor. As an Australian expat, this may allow you to accumulate tax credits while you’re working offshore, which can be utilised at a later date to offset future taxable income.

 

  1. Avoid the ‘dog box’ apartments

 

Investment grade, 1-bedroom studio apartments in the CBD may not lead to the best financial outcomes over time. While the yield may be attractive, and the entry price low, you should be sure to do your research on upcoming approvals for new construction, vacancy rates and historical growth rates in the area.

 

  1. Go for the owner-occupier style dwellings

 

Research the percentage of owner-occupiers compared to renters in the area that you’re looking to buy. By focusing on areas that have higher percentages of owner-occupiers, this may help to reduce downward pressure on your rental yield over time.

 

  1. Get in early

 

One of the key advantages of buying off-the-plan can be having the first choice of the property within a particular development. The likelihood of the best property in a development being available for purchase at settlement are low, and if there is availability, be sure to question why this is the case.

 

  1. Be careful with your deposit

 

Ensure that your deposit is placed in a trust account, and that the developer can’t get their hands on it. The developer should have sufficient financing to complete the construction without requiring your deposit. If this is not the case and the developer requests an early release, it’s time to walk away and find a better option.

 

  1. Remove the emotion

 

Investing in property should be viewed in a similar light to investing in shares. By this I mean we should simply identify growth assets in the right areas that are likely to deliver positive financial outcomes. It can often be a sensible approach to diversify your properties across various states at the right stage of the property cycle. Finally, remember that you’re not going to live in the property and it is simply an investment.

 

To your financial success!

 

Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group, division of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to international and local professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3

Australian Expatriate Group is licensed by Global Financial Consultants in Singapore, with a team of Australian-trained, experienced and qualified, allowing us to provide specialist advice to Australians living abroad.

To learn more about how we may be able to help you, please contact us:

✆        +65 8282 5702
✉        info@australianexpatriategroup.com
☜        http://australianexpatriategroup.com

To discuss how these changes affect you, click here to book a complimentary consultation: http://bit.ly/Book-Your-Consultation

 

General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.

 

*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you. We expressly disclaim all and any liability to any person or organisation, in respect of anything, and of the consequences of anything done or omitted to be done by any such person in reliance, whether whole or in part, upon the whole or any part of the contents of this.

 

 

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