You have your finances lined up, have done a little research and feel that you’re ready to take the next step and buy an investment property. It can be an exciting time, but property experts suggest that you don’t get too carried away with the process as this can lead to poor decision-making and long term regrets. Choosing the right investment property for you can mean the difference between setting the foundations for building a sustainable property portfolio, or investing in something that causes you stress, anxiety and costs you money.
Set Your Strategy Early
One of the most important steps in choosing the right investment property for you is having a solid strategy to back up the purchase. Professional investors rarely ever just buy into an asset without first having a long-term plan in mind. They know what their investment portfolio will look like in 5, 10 or 15 years time, they know how it will fit into their overall wealth building and management strategy, and they can plan to minimise any potential risks.
Think about this: if you went out tomorrow and looked at established houses, brand new apartments and off the plan developments, would you know the investment benefits and risks associated with each type of property, and would you be able to calculate what type of returns you might expect over a 10 to 15 year period? Buying an off the plan property could give you a head start as a first time investor, but many people “fall in love” with an established property, only to find that it can be a money trap and really unsuitable as an investment. Looking at all your options with a calm head (rather than rushing in to buy the first property you see) is what having a long-term strategic plan is all about – giving you the knowledge and a clear set of steps to achieving your financial dreams.
Prioritise Your Goals
Another important step in choosing the right investment property is to prioritise your goals as part of your long-term strategy, as the type of property you buy will greatly determine how quickly you can build a property portfolio. Most people want to be able to build long-term wealth and prosperity for their families, and have enough income coming in to be able to live the life they want. With this goal in mind, looking at options such as off the plan properties is sensible as they can be a cost-effective way to build equity quickly and to be in a position to buy more properties after only a few years.
Getting Professional Assistance
It goes without saying that many people before you have already asked these questions and have benefited from having a solid investment strategy. Companies such as Ironfish are so successful in part because they have experts who are also property investors themselves. This wealth of knowledge and experience can be invaluable when you are looking at investment property for the first time.