Investing in real estate: Making the right decision

When we start to think about how we're going to fuel our golden years, many Australians look toward property as the answer. 

It doesn't matter if you choose apartments, units or larger homes – investing in real estate gives us a physical asset into which we can deposit funds and watch them steadily grow over time. In turn, this provides us with strong capital gains and regular income through rent. 

But while many of us hope to become property moguls overnight, investing in real estate takes a lot of time, research and preparation. 

This means picking out property hotspots from other areas, getting your finances in order and coming up with an investment strategy tailored to suit your circumstances. 

Before venturing off into the lucrative world of property investment, make sure you keep these points in mind. 

Don't overlook the data

Some treat research like homework and put it off as long as they can. But keep in mind that in this case, not doing your homework isn't going to cost you an afternoon of detention. Instead, it could cost you a lot of money and wasted time. 

Doing your due diligence is a crucial part of making a good investment decision, no matter what type of asset you're buying. However, it becomes a lot more important with property. 

Some factors you'll need to check include the property itself, particularly its structure, condition and if there is any existing damage. There are also the financial aspects of the house to consider. Figures such as capital gain projection, rental yields and vacancy rates are extremely important, as they'll influence how much money you'll make from your investment. 

You might be wondering where to find such information – fortunately with the right property education, you'll know all of the necessary numbers in no time.

Come up with the right plan

Thinking of supplementing your retirement with money from property? You can't just buy a home, leave it alone for a few years and expect change to happen. 

Like any investment, making money from property requires management, a plan and a watchful eye. By meeting with a wealth coach, you can come up with a strategy that suits your individual circumstances. Whether you're looking to retire in 10 or 30 years, you need to have a game plan in action to measure your results. 

Keep in mind that a strategy isn't set in concrete. Depending on the market, your goals and your financial circumstances, your plans may have to adjust over time to meet the market. In fact, it's crucial that you review your strategy with a wealth coach regularly to make sure you're maximising your investment.