Investment properties versus earning interest from your bank account

While all banks here in Australia are backed by our Government, which means that if they crash you are still guaranteed to get your money back, not everyone believes that the returns are high enough, even with that feeling of security.

 

Real Estate is also considered a relatively safe and tangible investment, the price of Real Estate in Australia is on the up and up, but there can be many hidden or unforseen costs involved, and who can guarantee that the Real Estate boom will last?

Looking at the Bank CD investment options, here are the main factors to investigate when you are shopping around:

 

∙ What are the current interest rates being offered and are they fixed or variable?

 

∙ How long until the CD matures?

 

∙ Are you able to access your funds in case of emergency?

 

∙ How long will it take for the bank to process an early withdrawal if required?

 

∙ What penalties apply if you do withdraw your funds early?

 

∙ Can your bank “call” or end your CD early if interest rates drop?

 

Buying an investment property can seem like a sound way to ensure good returns, but all too often investors can get some nasty surprises if they haven’t done their research well before making their purchase.

 

Know your property:

 

∙ Be prepared to pay for independent reports from building and white ant inspectors, or geographic and soil experts on unimproved sites.

 

∙ Get quotes and council pre-approval for any future improvements you would like to make, and confirm any easements.

 

∙ Pay for an independent valuation of the property from a third party real estate or property agent to make sure you are paying the right price.

 

∙ Include upgrade and maintenance costs in your overall budget, the hot water service, stove and plumbing could all require replacement or repairs at any time.

 

∙ Investigate your best building insurance options, what fixtures are covered by your insurance and under which circumstances?

 

∙ Know your rights as a landlord, and save yourself a lot of grief by engaging an experienced property manager.

 

Don’t be in too much of a hurry to lock your money into any kind of investment, take the time to read up on and ask about your options first, shop around and make sure you are getting the best deal for you.

 

Make sure you understand all the terms and conditions of any contract before you sign anything and don’t be afraid to pay an independent professional to advise and explain things to you. It is better to spend a little bit of money in the beginning to be sure you are making the best choices, than to lose a lot of money in the end because you were ill informed.