Non-Emotional Purchases:
It does not matter if you have a spa in the bedroom at home and the investment property does not, or the window coverings are not what you have at home. This is an investment and you have to look at this from that point of view. Investment purchases should be made with a logical and transactional outlook.

Buying New Property:
If you are a tradesman and have the skills, time and money to do all the maintenance that an old property needs than this may be an option. Although, property built prior to 1985 does not qualify for any building depreciation. This type of purchase should not be looked at as an investment (investments should return you a passive income) instead as another part of your employment.

Buying Non Luxury Property:
When economies are running along fine, expensive or high cost rentals are fine. But when the economy has a downturn they can be vacant for a long time and the rent may have to be reduced dramatically to get a tenant. The right type of investment in the early stages of building your property portfolio should be around the median price, although for the investors who are in the advanced stages of their portfolio this may be a viable option.

Correct Financial Structuring:
There are certain important factors you should consider when financing an investment such as:

Should I buy the investment in my name or should I put it in a trust/company?
If one purchaser earns more than the other, how should we split the purchase?
What type of loan should I get and should I use my current lender?
If I am looking to sell in the short term, are there any exit fees?
Is my home going to be used to secure this investment?

Getting Your Tax Savings Back Immediately:
Tax deductions for depreciation on the building and fixtures and fittings can all be received on a regular basis (eg each fortnight the tax deduction is added to your net pay rather than waiting till the end of the financial year, submitting a tax return and then receiving your tax deduction). Your accountant can arrange this with the Taxation office via a taxation variation form.

Use A Quantity Surveyor To Calculate Your Tax Claimable: Often, people have their accountant make a calculation on tax claimable. This may be allowed for some time and then retrospectively disallowed. A better strategy is to engage a quantity surveyor for a small fee to give you an accurate depreciation schedule. This will ensure you get the correct tax deductions.

Good Property Managers:
Engage a good property manager. They have the skills and experience to get a good tenant. Plus going through a rigorous reference checking procedure as well prior to preparing leases, condition reports etc can be time consuming exercises. Investing in property should be a passive income so that you can continue to grow your portfolio without increasing your workload.

Get Insured:
Landlord protection insurance is very affordable. It can be purchased at low cost and you will be covered if a tenant damages the property or a fire occurs. You will also continue to receive your rent in the event of a tenant breaking a lease, until another tenant is put in place. Your financial planner will also discuss the option of other insurances which may be used to minimize your investment risk.

Buying In Areas With Continuing Strong Demand:
It will probably feel good to buy the one next door because you feel that you know all about your area and after all your property has had good growth over the years. However, Victoria is a big place and there are tremendous opportunities awaiting everywhere. This is a classic example of keeping it simple and not using your emotions to make financial decisions.

Engage The Experts:
When looking at a property to invest in there will be very different criteria. You will be looking at affordability, yields, tax considerations, finance, areas, rental returns, stamp duties, legal, property management, maintenance and so on. You can do all of these things yourself, or you can seek professional help to make sure the decisions are the right ones. After all if you are considering property investment it is most likely because you would like to build a passive income and/or create wealth.

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