March 25, 2014
If you are considering purchasing an investment property, you want to ensure that you are making the most of your money. People who research the market thoroughly, have a long-term strategy and are informed about their finance options will generally find themselves in a good position for property investment.
Mortgage Choice encourages those looking to buy an investment property to understand their financial goals and decide on their strategy before shopping for property.
To ensure that you are making the most of your money, We have developed five tips for first time investors to consider when building wealth through property.
Research the gains: Read property-related and investment articles. Talk to people in the know, eg. experienced investors, about areas you are contemplating buying in. Compare suburbs’ rental yields, resident demographics, tenant demand, existing and planned infrastructure, past price growth and predictions, etc.
Aim long-term: The market moves in cycles; it has highs, lows and steady patches. Prepare for the peaks and troughs of the property cycle by building a financial buffer of around 1-2% to cope with additional expenses including interest rate rises, maintenance and repairs, and/or the loss of a tenant, rental arrears, etc.
Cross your t’s and dot your i’s: There are tax and legal considerations associated with property investment, so it’s a good idea to seek professional advice from an accountant and/or solicitor before getting started. You want to ensure you will make a healthy gain from your investment strategy.
Investigate your property options: Conduct thorough research before settling on a property investment strategy. Consider talking to a buyers’ agent who knows the market and can be a valuable resource to use for advice or for negotiating with sellers and their agents.
Choose a well suited loan: There will likely be a range of property loan products to weigh up against your financial situation and investment strategy. A professional mortgage broker can help you compare your loans and guide you through narrowing it down to one suited to your needs and objectives.