You’ve been thinking about getting that first investment property but just aren’t quite sure where to start, use these simple tips to get the ball rolling.
Find your comfort zone
If you are thinking of investing in property, it is important to first set out a clear budget. You need to allow for all costs, including the purchase price, transfer duty, conveyancing and possibly lenders mortgage insurance and any maintenance that needs to be performed to make the property tenant ready. After you have worked out your base costs ask your mortgage broker to arrange pre-approval on your loan so that you know exactly how much you can borrow before you start your property search.
Look to professionals
Before you buy any investment property, seek professional advice. Your lawyer and your mortgage broker can help you with any information you may be missing.
Having the correct loan structure is critical for your long term wealth goals, so make sure you seek advice from professionals that you can trust.
Investment property location
Choosing an upcoming area can pay dividends, it is important to consider the demographics of the area you intend to invest in. Are you targeting young couples, families or students? This will give you a good indication of the type of properties you should be looking for. Young couples will probably be looking for units close to major cities, while families are often looking for houses in the suburbs that are close to schools and other amenities.
Property inspections are a must
When purchasing properties that are older, an inspection can reveal significant building problems or hazards, and help you decide if the house or unit is really what you are looking for after all. Make sure you understand the contents of the inspection report to avoid expensive repairs later.
Use a property manager
Having a professional property manager between you and your tenants is an effective approach with an investment property. Choose an agent who’s enthusiastic about keeping a good relationship with your tenants, and proactive in your property’s care and maintenance. Know your rights and responsibilities, although your agent can guide and instruct you.
Be in it for the long haul
Don’t forget that property investing is a long-term strategy and relying on property prices rising in the short-term is folly. The longer you can afford to commit, the better, and as you build up equity, you can consider purchasing a further investment property in the future.