How to get started in investment property, especially if you’re considering purchasing an investment property. And while only 8.4% of Australian’s (roughly 2.1 million people), owned an investment property in 2018; getting started in property investment is not as trying as you might think.
DO YOUR PROPERTY RESEARCH
The first thing to do when considering property investment is your research. Educate yourself on the property market, what you’re looking for in a potential investment, what makes a good investment, as well as the financial and legal components, including taxes and fees. According to Finder.com.au, some of the best resources include blogs like realestate.com.au, Investor Assist, Australian Property Investor, Real Estate Investor and Property Investment Resources Australia.
GET YOUR FINANCES IN ORDER
It is recommended that you have a deposit of 20% for a home loan, but with investment, there is a little more financial due diligence to consider. According to realestate.com.au, to get started, calculate your expenses and offset them against your total income so you know exactly how much money you can invest. Then, consider getting pre-approval for your loan. Pre-approval will help you to understand a realistic picture of the kind of investment home you’ll be able to buy. It also means you are a more competitive buyer when you’re looking at houses because your finances are in a better position than someone who has not yet sought a loan.
SET A PLAN AND YOUR GOALS
Property investment is a long-term game, so think about what you want to achieve and your timeline for doing so. You need to consider how long you want to hold the property and what you hope to gain financially from owning it.
For example, according to realestate.com.au if you’re looking to use your investment as a replacement income within ten years, you need to create a ten-year plan. Start from where you want to be in ten years and work back to break down the steps you need to take to get there in yearly, monthly and weekly goals.
SPEAK TO THE PROFESSIONALS
There is risk involved in any kind of investment, so the most important thing to do when starting is to seek out the advice of the professionals.
“Speak to a financial planner, bank, lender, mortgage broker or a real estate agent to guide you on how the investment process works and keep you focussed on your goals and next steps,” says Carolyn.