Thinking of investing in property? Our top five tips before you begin…
Property investment can be one of the most financially rewarding decisions you could make… if you do it well. It’s important to understand risks around any investment and to set up strategies to give yourself the best outcomes. With 16 years industry experience, I’ve come across five key areas I advise all clients to review before taking the plunge and you should consider, too.
Review your finances and set a budget
Before you even start browsing properties, get your budget in order. Make sure you are crystal clear on your income and expenditure, so you know exactly how much you are willing to part with each month on your investment (hint: spend less than you earn, win at life). Do you have a deposit saved? Do you have a small slush pile you can use for any unforeseen costs? All of these will make your journey into investing much smoother.
Find a good financial advisor
This type of investment should be considered a longer game when you consider upfront fees such as stamp duty, conveyancing and legal fees, and building/pest inspections. Securing the right loan structure for your needs could see the difference in thousands of dollars long-term and maximising the ongoing tax benefits will see immediate reward – so my advice is to touch base with a great financial advisor who ensures your investment works for you. I have some fantastic contacts I work with and happy to recommend them if you’re interested.
Research the area and its growth
While property investment can provide you with an income from the rent and tax cuts in the short term, the capital growth of the property has the potential to generate serious wealth long term. Understanding whether the suburb is in a growth phase, the value of a property and rental demand are key to choosing a good investment.
When investing, it’s key to use your head over your heart and choose a property which will instantly provide you with rental income rather than waiting for someone to ‘fall in love’ with the place like you did (save that for your own home!).
If investing with a partner or group, write everything down
Sometimes just getting into the market is tough (Gen Z, I hear you) and the best way to crack in is with a friend or family member. The upside is doubling your borrowing capacity, but it also makes your investment slightly more complicated (no matter how much you love them, trust me!). So, define your roles and expectations so you’re all on the same page with how much you’re willing to contribute to a long-term mortgage and ongoing costs. Write it down, write it down, write it down. He said/she said serves no one in many areas of life, but it’s particularly useless in property investment. You’re welcome.
Engage a Property Manager
While there’s an abundance of information at your fingertips (thanks google), it can also be overwhelming and occasionally you’ll come up against conflicting advice on the property market. Having an expert who knows exactly what the market is doing, from knowing what’s a bargain and what’s a dud to insight on rental demand, will give you a massive step up, let alone peace of mind. I’m always happy to help with advice on where the highest rental demand is and the current best locations, so call me anytime to talk your ideas through on 0402 888 550.