When Investing In Property Where Do You Even Start?
There’s a great big world out there where people are consistently making money off investing in property. If you are not looking at ways of getting your finger in the pie then you are missing out on potentially creating an abundance of wealth for yourself and your family. In fact, there are very few other wealth creation strategies in Australia or around the world that are likely to produce a similar outcome than property investment. But where do you start when investing in property?
We know there are several reasons to invest in property- it can help create financial security for your future and your retirement without having to sacrifice your current lifestyle. It’s more stable than stocks or mutual funds, it’s easy to understand, there are a wealth of tax benefits, your tenants help pay off your mortgage and lastly, and most importantly, with the right approach and strategy you can create some serious wealth.
If you are completely new and don't know where to start when investing in property it can be a confusing minefield. How do you know what to do, what to look for and what to do to give yourself the best chance when investing in property that will help you create long-term wealth? And who are the best people to talk to advise you on these decisions?
1 Be Honest About Your Finances When Investing In Property
There are lots of options available to people who are new to buying investment property. It doesn’t matter what walk of life you come from and what your finances and budgets are like if you’ve got a stable and reasonably well-paying job, solid employment history and good credit it's likely you’ll be able to sort out a loan to suit you and what you can afford. However, it’s important to work out your budgets, what assets you have and what expenses that you have or will incur. You’ll need to consider such things as the amount of debt you can afford and whether you could make the mortgage repayments if the rental income does not cover the total costs of the investment or any others that may be involved.
2 Do Your Homework, First.
This should go without saying, but doing your homework before purchasing an investment property is critical to giving you the best chance at succeeding at creating wealth. There’s more to research than checking recent sales, median house prices, and current rental vacancies etc. Take a drive around where you are looking at investing. What’s the traffic like? What are public transportation options available? Would you like to live in this area? What are the estimated property maintenance costs and are you able to help with maintenance to lower your own expenses?
Look into what type of facilities like shopping centres, schools, and hospitals are currently in the area and are there council or government plans for anything that could impact it negatively or positively? The more research the better prepared you are to make an informed decision.
3 Don’t Let Your Emotions Affect Your Decisions
We understand there is an emotional element to any decision we make, we are all human after all. However, letting the way a property makes you “feel” play a huge factor in your choice to commit to it isn’t the best strategy, especially when talking about investment property. It’s easy to fall in love at first sight with a property for various reasons, but this is letting your emotions take over and often ends in buyers remorse. Make sure you view several properties before putting in an offer to minimise the chance of making decisions of a whim, and always remind yourself this is a choice for financial reasons and nothing more.
4 Always Speak to The Professionals
There are several resources available for those that are new to buying an investment property and educating yourself is key to achieving your desired goals. Attend various property investment seminars that’ll help you understand the basics of property investment. Talk to an independent financial adviser or planner who will look at your current financial situation and help you with your buying decisions based on this. Speak to a professional buyers agent who can help you understand the market and hold your hand through the whole buying process. And chat to a solicitor regarding all the legalities of buying your investment property.
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