Getting Started As A Property Investor

Property investment in Australia is growing, however the number of people with one or more investment property is still relatively low:  according to the Australia Tax Office it is just under 8% of the population[i].  This is interesting, as the sheer amount of information and discussion on property as an investment nowadays would suggest that many people would love the idea of investing but maybe get put off at the last minute or discouraged before they can finally commit.  The following provides some tips on how to avoid being overwhelmed if you are looking at property investment.

 

Do Your Homework

The truth is that first-time property investment, like any form of investment, can seem like a complex and challenging prospect.  There are seemingly a vast range of decisions to be made, as well as financial matters to consider and long-term goals to set for yourself.  Investing in property can mean being introduced to a whole new set of data and research that make not make much sense in the beginning.  Terms such as negative gearing,  tenant demand, strata or corporation fees and capital growth may not mean much to you without serious research from a property investment expert.  If you are considering real estate as an investment it is definitely worth spending time learning about the property market, becoming familiar with the common terms used and what they mean for you.  Once you’re more comfortable with the market, you will then be able to think about your options and your long-term financial goals.

 

Review Your Finances

Looking at your finances and seeing where you’re currently at and what you might be able to afford in terms of an investment loan may seem like a simple task, but it is surprisingly something that many people don’t think about doing before they go to a bank or other lender for a mortgage.  Listing down your assets, including any types of income you may be getting as well as your current expenses is a good first step in working out how much you will be able to afford in terms of an investment loan.  When you do talk to a bank or lender about applying for a loan you should also have all of the relevant documentation organised and ready to make the process quicker and easier for everyone.

 

If you are planning on buying an off the plan property, don’t forget that you’ll usually need around 10% of the purchase price up front as a holding deposit, but will also have time to arrange any financing you may need for the mortgage when the development is close to completion (which can sometimes take a few years).

 

Setting Financial Goals

Property investment specialists believe that one of the biggest factors in building a sustainable and successful property portfolio is having a realistic long-term strategic plan. Going into property investment, no matter the type of dwelling you buy, can be a risky proposition without financial goals or even contingency plans if things don’t work out exactly the way they are supposed to.  Most experts will suggest creating a 10 to 15 year plan when it comes to property investment.  This is because you have a better chance to ride out local peaks and troughs in the property market, giving you a better chance at capital growth in the long-term.  Most property experts will also recommend buying more than one or two properties in different locations during this time to ensure that you’re spreading your risk evenly.

 

Getting The Right Strategy

Finally, having experts help and support you at every step of the way can make all the difference when you’re a first time property investor.  When you’re looking for specialist investor strategy, search for a company such as Ironfish that has years of experience helping people build and grow their property portfolios, has a fantastic research team that will supply you with the right information at the right time, and often has access to the most exciting pre-public and pre-negotiated deals for off the plan properties in the major capital cities.

 

 

 

[i] http://propertyupdate.com.au/how-many-investment-properties-do-australian-investors-really-own/

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