When it comes to buying an investment property, there’s no one-size-fits all strategy, but there are a few tips you can take into consideration, especially if you’re only getting started.
Have clear goals
Many people ‘fall into’ investing without a clear goal in mind. If you want to investing in property with the intention of building wealth long-term, then you need to set a goal and work backwards. For example, some investors set a goal to earn a passive income (rental return) by a certain age. Some investors who are higher income earners prefer to negatively gear in the short term, targeting capital growth in the long-term. The key with investing is to be strategic.
Set your budget & assess your borrowing
Most lenders will ask for a minimum deposit of 10-20%. While you may be able to use your equity in your first property (if you have one), you will need to have upfront cash prepared for ‘one-off’ costs such as legal and conveyancing expenses, stamp duty and a number of other fees. You’ll also need to consider how you plan to service the mortgage and cover property management or other ongoing costs. At Ironfish, we prepare cashflow scenarios for all our recommended properties to help you visualise the ongoing costs.
Do your research
A lot of people let their hearts guide them when it comes to buying property. While this is more common for first-home buyers than it is investors, it’s still something to watch out for. Buying an investment property should be backed by research. What do you know about the market in the area you’re looking in? Are you being held back by ‘home market bias’ – remember your local area may be perfect as a home for you, but not necessarily as an investment.
Property investment is a long-term commitment, and there will be inevitable challenges that come up along the way – a broken hot water heater, a period of vacancy. So it’s important to have the right mindset going in. Property tends to be a forgiving asset, if you give it enough time. It’s also important to be realistic; a ‘renovator’s delight’ is not for everyone. Attending hundreds of inspections is not something everyone has time for. At Ironfish, our aim is to make property investment as simple as possible, from helping with the research and property selection; building a strategy for investing that’s right and realistic for you; and holding your hand along through any challenges that may come up along the way.
Get help from experts
It always helps to speak to someone who has experience. Ironfish is one of Australia’s leading property investment companies. We help new investors navigate the real estate market, and established investors gain access to quality opportunities. We can tailor a strategy for your individual circumstances, and ensure you’re putting your best foot forward when building your property portfolio.
Start a conversation with an experienced strategist today
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