What To Consider When Buying a Second Property

Purchasing your own home remains the great Australian dream – and buying a second property may help you increase your wealth further. Whether you’re building your investment portfolio, buying a holiday house or supporting a family member, there are plenty of things to think about before you take that next step.

1. Consider your cash flow

Property tends to be a long term investment, so do your sums to make sure you can afford your ongoing repayments on two mortgages. Also think about any major life changes on the horizon – for example, you may be planning to expand your family, or you might need to support a parent in the coming years.

2. Get to know the market and location

Research what’s happening in the current market, and whether it’s the right me for you to buy. Get to know the area you’re considering by speaking to local resi- dents and real estate agents. It’s also wise to look into the short term planning of the area, for example, nearby construction may affect your ability to find a tenant.

3. Investigate before you invest

If you’re buying a property as an investment, carefully consider its location. Buying in high demand area is likely to see you enjoy a constant flow of income from the rent. You’ll need to provide your lender with a rental es mate le1er, which you can get from the agent managing the property. Keep in mind that generally lenders only take to 50 to 80% of the rental income into account when calculating whether you can afford the loan.