You might be surprised to learn that one of the main reasons people don’t end up investing in property is that they become overwhelmed by the process and decide that it’s all too hard. They may also be waiting for the “perfect time” to invest, although experts would suggest that any time is a good time to buy an investment property as long as your strategy is sound. Finding out how to buy an investment property and learning as much as you can about the process is a great way to ensure you don’t get swamped with off-putting details.
Create A Strategic Plan
When looking at how to buy an investment property, many first time investors focus on getting the money they’ll need together and all the paperwork they’ll have to fill in. However, there’s no point getting your finances in order – talking to banks and other lenders, getting pre-approvals and getting documents signed – unless you have a solid plan in place for why you want to purchase an investment property and what you’ll do with it in the future.
The “why” is important as it will guide your actions right from the moment you start looking at properties, up to the time you decide to either sell it or use it as capital for the next purchase. A sensible strategic plan covers at least a 5 to 10 year period (although a 10 to 15 year period is recommended), and looks at your goals such as replacing income or buying more investment properties. You can set deadlines for yourself, and then review them as the years pass or if your circumstances change.
Understand The Market
First time property investors should have conducted full research and understand the many complex aspects of choosing a suitable property and the current market; however, this is rarely the case. The problem with buying an investment property based on “gut feelings”, recommendations from friends or family or as a spontaneous purchase is that you are risking a lot of money, future income and capital growth.
It is recommended that first time investors conduct thorough research, not only about types of property to buy that will work with their strategic plan, but also the areas they wish to target such as inner city suburbs and market prices. Property investment seminars can be a great place to start for first timers, especially if the seminars focus on developing successful investment strategies and getting the latest data from industry experts.
Getting assistance from experts can also help get you off on the right foot. When thinking about how to buy an investment property, budding property investors should look for investment experts that have been in the industry for some time, have experience with the type of properties they are interested in, and have dedicated local teams that can help. They will also know they are in safe hands if they can find experts who are also property investors themselves – as in the case at Ironfish.