Investing in property in 2018: things to watch and things to know
While it’s not exactly a case of “new year, new me” for the housing market, that’s not to say there haven’t been some subtle but important shifts- or that more aren’t on the horizon. More than that, a lot of last year’s advice definitely bears repeating for those thinking of heading into the market for the first time.
So, here are some things to consider if you plan on keeping your New Year’s resolution to expand your property investment portfolio in 2018:
Negative gearing- There are plenty of other reasons to keep an eye on election results, granted, but a change in government could very well mean a change to laws governing negative gearing as well. It’s expected to mean that buying a property in order to rely on negative gearing will be become less viable after the laws are passed. However, it’s also worth remembering that if you do currently negatively gear already, the changes will likely not apply to that property.
Changes in interest rates- While they are incredibly low now, there’s no guarantee they will stay that way. But if interest rates rise and property values fall, the gap between what you owe and what the property is valued at can become an issue. For that reason, it might be worth factoring interest rate rises in when considering your initial deposit on a property.
Where you buy- Personal preference plays a part here- some people have no problem buying far away, others find it easier to stay across things when they are closer to home. Generally speaking however, whether it’s near or far to where you live, make sure you know the market. Things like vacancy rates and planning changes are especially important. Often it pays to have a good property manager backing you up as well.
Get your landlord insurance sorted- An easy thing to overlook if you’re just breaking into the property market, landlord insurance can be essential to protect your rental income in the event your tenant breaks the lease and can no longer pay rent or causes any damages. Costs of insurance can vary depending on property and circumstance but they are a tax deduction under current tax laws.
For plenty more information, have a listen to Carolyn Parrella’s chat to Steve Price via the player above.