Are you looking to increase your wealth or add an extra source of income? The chances are, like most Australians, you’re looking to invest in property. If you are, it is important to understand and feel confident about your decision. Here are some tips that will assist you in making the transition from homeowner to property investor:
1. Get sound advice.
The first and most important step you need to take is to seek advice from a mortgage broker. Using their knowledge and experience, they can help you find out what you can afford, work out your long and short-term investment goals and find a loan that is right for you. Working with a broker also helps you to structure your loans in the most effective way tailored to your needs and improve your chances of success in your investment.
2. Understand the market.
Property investment is highly beneficial when done right, however can also be a risky investment if you don’t understand the market. It is important not to jump right into investing in property until you have done some research or have a great team who have done the research for you.
You need to find out what drives the market, what the current investment climate is like, what types of properties are popular and the locations where potential tenants want to live. As an investor, you want to align your investments with what the market is demanding. This will make it a lot easier for you to attract a quality tenant and increase the yield off your investment.
3. Set achievable goals.
It’s also important to set achievable investment goals based on your circumstances, both short- and long-term ones. Your financial advisor will ideally help flesh out these goals for you, but it is imperative to have achievable goals in place in which to work towards.
For example, would you like to have enough money to send your children to private school? How about having the ability to travel around the world by the time you retire? Maybe you want to double your number of property investments several years from now? You need goals because these will help you map out a strategy to assist you in achieving these goals.
4. Devise a strategy.
Once you have established your goals, you need to create a strategy by which you will achieve those goals. Ideally, you need a strategy when you’re just starting out, on how you’re going to grow your investments, and your eventual exit plan. Aside from that, it is important to also prepare a plan B, should your original strategy not eventuate for any unforeseen reason.
Becoming an investor takes a lot of work before you reap the rewards of your efforts. However, if you get the right loan advice, establish obtainable goals and execute your strategy, you’ll significantly increase your chances of success with your property investment.
Written by Duncan McKinnon.