Thinking about buying your first investment property? Here are three things you need to get started.
So you’ve decided you want to build a property portfolio. Now you just need to get out there and look at properties, research home loans and make an offer, right?
Before you do anything, make sure you have these three things well and truly locked in:
1. A strategy
Before you start dreaming of how to spend your new wealth, you need a plan. Smart planning is the secret behind the most successful property investors. Start by thinking about your goals. Do you want to earn an income from rent? Build a portfolio for long-term gain? Save on tax through negative gearing? Only with clear goals in place can you develop a strategy to make them a reality. Think about your timeframe too – when do you expect to buy? Remember to be realistic. These things don’t happen overnight.
2. The A-Team
While any investment is ultimately your decision, it pays to work with professionals who can ensure you’re making sound investments and help you stay on track for your goals. Think about which professionals will make up your property investment A-Team: real estate agents, a buyer’s agency, investment broker, financial planner, accountant, solicitor, property leasing manager, surveyor and so on. If you don’t know any good real estate agents or investment brokers, do some research. Talk to trusted friends, family and colleagues to find out who they would recommend.
3. Understanding of your finances
It doesn’t take Einstein to know that you need financing to start out as a property investor. But the reality is that you probably don’t need as much as you think. Start by looking at your current financial situation – consider the value of your assets, your liabilities (money you owe) and your household budget. Understanding where you are now will help you work out which lending and financing options are available to you.
Once you’ve ticked these three boxes, you’re well on the way to starting your property portfolio.
Want more information on how to build a property investment strategy? Contact our experts.