Naturally it is the greatest focus for property developers in Perth. So how much money do you need to invest in property?
OBTAINING THE PROPERTY
Firstly, it depends upon which property investment strategy you decide upon – where you buy, what you buy and what property development solution you then proceed with. Prices can vary significantly depending upon the suburb and the block size.
In order to secure your chosen property, calculate 10-20% of the asking price and look to have this saved as a deposit. If you have a deposit smaller than 20%, you might have to pay Lenders Mortgage Insurance (LMI). Weigh this up – it might be worth paying for LMI if it means you can put down a smaller deposit and keep some money as backup for other purchasing costs. Before proceeding always check with your Financial Advisor, to see whether the investment stacks up and the best way to finance the home.
It’s important to remember there will be additional purchasing costs including stamp duty, mortgage registration, building inspection costs and conveyancing fees just to name a few.
DEVELOPING THE PROPERTY
Property development solutions each come with their own specific costs. Turnkey homes can be a great option as they are fully completed, meaning you don’t need to find more money down the track for flooring, lighting and window coverings. Don’t forget to also consider the cost of demolishing any existing residences, particularly if there is asbestos on the property that can cost more to remove.
Once construction is complete and the tenants are moved in, budget for those annual yearly costs. For examples, council and water rates can both cost thousands each year. You’ll also need to consider insurance, property management fees and the tax benefits of your investments.
WHERE TO OBTAIN PROPERTY DEVELOPMENT FINANCE
One of the best property development tips is to find a good financial partner. At Summit Projects, we proudly partner with Westgate Finance.
Westgate Finance has helped many new investors finance property developments.
Importantly, Westgate Finance can help ensure you’re a good candidates for the banks, getting ‘all the ducks in the row’ to secure a competitive finance solution.
And because Westgate Financial Services are part of our extended Summit Homes Group team, you can rest easy knowing that all of your property development needs are being taken care of under the one friendly roof!
To discuss turnkey homes, duplex designs and prices or to arrange your obligation free development consultation, call us at Summit Projects today!
Disclaimer: The information within this article is general information only and it does not constitute advice or recommendation. It does not take into account your financial situation, investment objectives or personal circumstances. Before making a decision about developing your property, you should seek independent financial, legal and taxation advice.