Buying Your Investment Property

Your success fee is going to depend on what type of property you’re aiming for. The fee will vary depending on which Buyer’s Agency you approach and will also depend on the array of services, reputation and experience that they have to offer. A buyer’s agent that has just started out will likely have a very low set fee ranging from $5,000-$10,000. More established agencies such as Cohen Handler will be higher due to greater expertise, reputation and industry connections. The total cost will vary on the type of property, and is typically a commission percentage of the property or a predetermined set fee.

Cohen Group offers opportunities for clients to invest at various fees for entry-level properties from $200k-700k using CH Secure, 700k and beyond through Cohen Handler and commercial investments of all categories and price using Costi Cohen. Get in touch for more informations about our investment property services and fees.

Our property buyer’s agents help with investment property due diligence by researching property history, analysing comparable sales, and assessing the market dynamics, property’s condition and holding costs. They also provide insights into potential risks and opportunities associated with a particular property. Cohen Handler has access to a network of professional building and pest inspectors, property management partners and conveyancers to ensure the investment property you plan to buy is of high-quality and will reliably work towards achieving your financial goals.

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Buyer’s agents conduct thorough market research, analyse property values, assess potential rental income, and consider market trends for you. Our research involves regular conversations with sales agents, reviewing data and reports. Our goal is to find properties that align with your investment objectives and offer you strong potential returns both with capital growth and rental income. Through Cohen Handler’s network, we have various types of Buyer’s Agents sourcing residential and commercial property of varying kinds and budget.

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Investment properties exist at all price points, making them more accessible than you might think. But affordability is a personal equation, and the answer depends on three key factors:

1. Your Financial Situation:

• Income: How much can you comfortably allocate towards a mortgage, maintenance, and potential vacancies?
• Savings: Do you have a healthy deposit to reduce your loan amount and monthly payments? Your Loan to Value Ration (LVR) may also impact borrowing costs.
• Debt: Existing debt obligations can significantly impact your borrowing capacity.

2. The Investment Property:

• Price: Location, type, and condition will greatly affect the cost. Explore diverse options beyond single-family homes in prime locations.
• Rental Income: Can the potential rent cover your expenses and leave a positive cash flow? Research realistic rental rates in different areas.
• Additional Costs: Factor in ongoing expenses like property management, repairs, and insurance.

3. Leverage and Strategy:

• Mortgages: Utilise leverage strategically. A smaller deposit can increase your access to properties, but higher loan-to-value ratios might mean private mortgage insurance and higher interest rates.
• Diversification: Consider spreading your risk across multiple smaller properties versus one larger one.

Remember: Investing in property should be a long-term, responsible decision. Don’t stretch yourself beyond your means. Seek professional guidance from financial advisors and experienced real estate agents to assess your situation and develop a sound investment strategy.

An investment-grade property is considered to be of high quality and is deemed a reliable and stable investment. It is often associated with lower risk and is favoured by both institutional and individual investors.

Key considerations that ensure a property is investment-grade include, desirability of location, income stability, tenant quality, physical condition, market demand, rental yield, and so on. When you are ready to invest, the list of considerations is extensive and requires plenty of research. Our property buyer’s agents save you the time and stress of accounting for this, affording you to confidently acquire an investment-grade property sooner.

The fee for paying a buyer’s agent is a tax-deductible expense for investors and only when you decide to sell the property as the fee forms part of the cost base of a capital gains asset. “The cost base of a capital gains tax asset is generally the cost of the asset when you bought it plus other costs that are associated with holding, obtaining and disposing of an asset’. This can include your legal expenses, borrowing fees, auction fees, property management fees, buyer’s agent fees and stamp duty. It’s best to speak to your accountant about this beforehand to help you understand your options

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Choosing an investment property is about so much more than finding a property that you like the looks of, though of course curb-appeal can be helpful when letting out the property. It is about understanding your goals, which might be capital growth or rental income, for example. There are some key factors to consider when buying an investment property:

1. Location:
   Jobs and population growth: If people are attracted to the area because they have access to reliable jobs, this should translate into reliable rental income for your property
   Low vacancy rates: If others are unable to rent their properties out, you may need to lower the rent of your property to attract a tenant.
   Proximity to amenities: Just like you, tenants want to live in an area that has access to schools, transportation, and lifestyle factors.
   Future development: If there are infrastructure or revitalisation projects in the area, this coud enhance property values in the medium to long-term.
2. Property types:
   Standalone home: these properties might offer higher rent, but equally might come with higher maintenance costs.
   Apartments, units or townhouses: these are typically cheaper than land, but offer less opportunity to add value through renovations, and there may also be restrictions on short-term letting, for example.
3. The cost of buying an investment property
   Achieving a competitive purchase price for the property is the first place to start, but it is also important to look at all the other costs and benefits of the property. Research average rents in the area and ensure your projected income covers mortgage, taxes, and other expenses. Look for areas with historical and projected value appreciation for long-term profit. Factor in maintenance, repairs, insurance, and vacancy periods to avoid financial surprises.

Cohen Handler is there to help you navigate the property investment landscape and find the right property at the right price that matches your financial goals and risk tolerance.