There are many benefits to investing in real estate. Unlike other investments, real estate allows you to be in control and make decisions. For example, you will determine who maintains the property, the tenants who will live under your roof and how much rent you will be charging the tenants. These factors make it increasingly important that you understand all of the real estate options which are available to you.
Residential real estate values are relatively easy to predict and monitor through factors simply researched – local employment rate, economy, crime rates, transportation facilities, quality of schools and other municipal services. Stay ahead of these factors and predict improvements and you can invest extremely well in real estate.
Real estate offers:
- Less volatility than shares or other investments
- Income if your purchase is an investment property that’s tenanted
- Capital growth if your property increases in value
- Tax deductions on property expenses and loan interest
- Potential for long-term returns
- Access to equity which can be used to secure a loan for further investment
Weighing up the pros and cons of real estate investments
Just as there are pros and cons to any form of investment there are pros and cons to real estate. The more educated you are about your investment options, the more weight you’ll have on the pros side of the scale.
Real estate investment requires careful thinking but it also requires common sense and a bit of gut instinct. Spend too much time thinking about real estate and great opportunities can pass you by. Afraid of making the wrong choice, you end up with “analysis paralysis”, analysing every possibility without ever coming to a conclusion.
Relax. Breathe. Trust your common sense. Look at your options and consider appropriate solutions. With solutions like Kitome, you can be confident you’ve made the right choice to invest in real estate.
Kit homes for smart investing
Whether you’re a first home buyer or a savvy investor, Kitome offers a large range of kit home designs and the flexibility you need to stay within budget and maximise your investment. Arrange your free consultation to discuss choosing one of our designs, modifying one of our designs, or designing your own home from scratch.
Every Kitome client has different design requirements. Bring to your consultation as much detail as you can about what you want and we’ll be able to match or create a Kitome design to your investment reward needs.
First home buyer needs
Unless you have half a million dollars in the bank or you’re happy to be saddled with high mortgage payments for the next 30 years, the options for first home buyers are often limited. For those sticking to the “location, location, location” maxim, this is especially true.
First home buyers often choose to purchase property in locations less than desirable, believing it’s a ‘foot in the door’. First home buyers also spend money on cheap ‘fixer-uppers’, opting to spend their free time up to their elbows in plaster and paint. If you don’t want to do this, a kit home is a great solution. Plus, kit homes are often more affordable if you decide that you want to owner-build or manager the build yourself.
Kit homes as an investment property solution
Kit homes are a cost effective method of building a property and this benefit – in combination with a variety of other advantages possible including versatility – highlight why more and more people are investing in modular homes across Australia.
A kit home can:
- Make you eligible to apply for the NSW Government’s $7,000 First Home Owners Grant and the new $10,000 Queensland Building Boost Grant if you live in Queensland.
- Provide you with endless options in terms of design and all the little luxuries you want from your first home
- Be constructed by yourself to save you up to 40% on the cost of a traditional build (if you owner build/ manage).
- Give you the best of both worlds – a designer home in the location of your choice.
Investment buyer needs
To minimise risk and maximise profit it’s important that investment buyers have practical and logical buying systems in place. Owning an old property entails huge costs – estimated to be as much as three times the cost of a new property of the same value, therefore a new property makes long-term sense. An old property may require $15,000 in maintenance each year, whereas a new property only $5,000.
For investors wanting minimal stress, new property is a wise, cheaper and more relaxed way of investing in real estate. A kit home is a great solution, giving you a new home that’s appealing to renters.
Whether it’s a car, a big screen TV or a lounge suite, most of us will go straight to the store that sells goods straight off the factory floor in favour of a second-hand dealer. The same goes for renters looking at property. Renters love the shiny and new, so why buy old when you have kit homes?
Efficient and new
In terms of investment properties, time and money are both extremely crucial factors in decision making. When compared to renovating an existing property or building an ordinary residential house, kit homes are an affordable and productive alternative.
Tenants can be demanding and a new kit home with stone benchtops, ensuites, alfresco outdoor areas, family rooms, media rooms and minimum gardens to maintain are attractive. This can reward you with a higher rental yield – positive cashflow without really trying.
Another incentive is that being a brand new investment home you only pay stamp duty on the land component of the purchase price. This can save you thousands of dollars up front.
How to avoid these 6 common kit home mistakes
If you’re thinking about a kit home for your investment, you’re thinking smartly. But even so, be aware of common mistakes. Don’t just choose a block and then plonk a kit home down – plan to take advantage of views, privacy, summer and winter temperatures etc. Also:
- Don’t finalise your design and budget until you know the site requirements (earthworks, accessibility etc)
- Don’t take on more than you can chew. (Unless you have the knowledge and skill to roof tile, dry wall and lay slabs, hire a professional)
- Schedule trades realistically to follow the flow of the build
- Pour your cement as and when you need it and not all at once to save money
- Allocate a percentage of your budget for landscaping
Follow these tips and you’ve got yourself a great investment!
Learn more about building with Kitome
Want to learn more about customising a kit home to suit your investment needs? Download our brochure and book a free consultation with Kitome today. We can even introduce you to our preferred lender who can assist you with all your kit home financing needs.
The post The Benefits of Choosing a Kit Home for Your Real Estate Investment appeared first on Kitome.
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