How to boost property investment returns as housing hits high notes

As the real estate market recovers from its COVID squeeze, there are opportunities for investors to increase their wealth.

Housing is booming in popularity as Aussies focus their spending at home.

Australian Bureau of Statistics figures released this month showed housing approvals at a 21-year high as record-low interest rates and government stimulus entices more home buyers.

That’s good news for the nation’s two million-plus property investors, but it’s no reason for them to ignore other ways to boost their real estate gains.

There are many ways to maximise real estate’s return on investment, and it often starts with the interest rate.

Turner Real Estate CEO Emma Slape says investors should compare lending rates to get the best deal on their loan.

“A small decrease in rates could allow a further purchase for investment,” she says.

Slape says it’s wise to get a tax depreciation report. These are prepared by quantity surveyors and usually cost $500 to $800 per property, but most investors get much more money back through tax deductions over several years.

Buyer's agent and property investment adviser Cate Bakos

Turner Real Estate CEO Emma Slape

“Deductible items can make a substantial positive impact on your end of year tax return, meaning more money in your pocket annually,” Slape says.

She says investors should target suburbs of strong tenant demand.

“Things like infrastructure, schools, transport and health support close by are all key features for tenants.

“And make sure you choose an experienced property manager to ensure the rent is matching the market, the paperwork is accurate and the property is regularly inspected for upkeep and maintenance.”

Property investment adviser and buyers’ agent Cate Bakos says investors should be proactive about getting pre-approvals for loans.

“Your negotiating and bidding power is strengthened when you are not worrying about your finance,” she says.

“Pay attention to the price and sales growth, and research comparative sales in the areas you are targeting.

“Being informed and setting an appropriate budget off the back of recent sales is far better than finding yourself priced out of the market.”

Bakos says it’s wise for investors to have access to emergency funds.

“Then you can ride through any slump and deal with maintenance issues, and prevent you from falling under stress or considering selling other assets,” she says.

Slape says investors should focus on more than just rental income. “Look at long-term capital growth in the suburb as well as yield. Both are important to ensure that you’re gaining in the short and long term,” she says.

Originally published as How to boost property investment returns as housing hits high notes