With the growth and strength of property markets around the country many first-time investors are feeling the pressure to get in before prices rise more. If this sounds like where you’re at, then read on…
Buying an investment property is a decision that you shouldn’t rush in to. If you’re not ready for whatever reason or haven’t done the appropriate preparations it could be a very costly exercise, but we’re here to help you get yourself in the right position to get you moving.
We’ve pulled together some insights of what you should know before diving in, direct from experienced property investors.
Consider where to compromise
The three major factors involved in buying a property are normally
- Your budget (how much you can borrow / afford to spend)
- The property itself (detatched, duplex, number of rooms, block size etc)
- Location
Your budget is tough to change, although you can work on it over time to prepare (reduce credit card limits, minimise debts etc). The compromise here might be waiting a little longer to enter the market to increase your borrowing capacity, but you’ll need to consider the market and when is right for you. Timing may be the compromise you’ll need to make.
The property itself can always be renovated to improve its appeal – add a bedroom, a pool, put in a new kitchen or bathroom. This can be done with equity or even with savings after some time has passed, so the property itself is also an ok place to compromise.
But, the location is set. There’s no moving your investment from one suburb to another without costly buy and sell situations. Do your best to avoid compromising on location when you buy.
Focus on your finance first
The right finance and structure can make or break your investment strategy. There’s no overstating it, so speaking with your @Finance Lending Specialist is the best place to start.
If time permits, a pre-approval is a good idea, but if you’re ready to move on a property let us assess your situation to avoid disappointment during the application process.
Part of that assessment will help ensure you’ll have a financial buffer set aside for incidentals and other unforeseen issues that can arise as part of any property. Which leads us to …
Expect the Unexpected and be prepared
Of course, it’s impossible to plan for everything, but having the buffer we’ve just mentioned will help you cover costs that you’ve either missed or have popped up from owning a property.
Things like rates, insurance, body corporate fees (depending on your property type) and of course maintenance or repairs are always going to be a factor worth considering first for wise investors.
You’d also do well to be prepared to cover the bills if your rental is vacant for a time. Will you be ready to cover costs without the rental income to help you do it?
Avoid emotional attachment
Loving where you live is one thing, but loving your investment property is another entirely. The rule is: don’t. Instead of falling in love with your investment property or one where you’d like to holiday, find one that tenants will want to rent or even other affluent investors owner-occupiers would like to buy.
This does two things:
- It’ll mean you’re less likely to have vacancy
- It’ll mean that when you go to sell your investment, there’ll be buyers lining up to put profit in your pocket.
Think with your head and consider the numbers before your emotions. That’s what will truly make your investment successful.
Make your own, informed decisions
An agent looking to sell a property will sell it to you. We’re not saying they won’t be honest, but there’s always going to be theirs or the sellers interest at play. Do your own research on a property – local sales history, previous sales history of the property, location specifics and demographics – the whole box and dice.
When it comes down to it, your money is on the line and potentially even the possibility of a financially free future.
With this in mind, it’s incredibly important to get help. Lean on other investors or specialists in property investment to help you make the decision (not make it for you, but help). Our team have extensive property investment experience you can trust and rely on, so make @Finance part of your team to maximise your investment success.
The perfect property doesn’t exist – don’t wait for it
Don’t sit around waiting for the perfect property to turn up and don’t attempt to “time the market”. There’s no perfect time to invest, but with the right strategy any time can be the perfect time. You want to set yourself up now for a lifetime of smart property decisions and thus the possibility of financial freedom through your investments.
Simply starting now with the right advice, right financial structure and right team behind you might see you ready sooner than you think, your property investment future is here and it’s ready for you to get serious with it.
If you’d like to discuss your property investment goals and finance strategy with those in the know, speak with our team today on 1300 469 840 or send us an email to get started.
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