You’ve decided you want to start planning for your future, so you can spend less time working and more time enjoying the pleasures of life!
There are two ways you can make money; by working or having your assets work for you!
If you keep your money in cash, you will only ever have what you have saved. However if you invest your money you will, hopefully, see it continue to grow and grow.
There are many ways to invest your money such as: bonds, mutual funds and stocks. But by far, the most popular form of investing is through properties. There are said to be 1.7 million property investors in Australia, which means 1 in 7 people own an investment property. So it’s fair to say property investing is big business down under!
If you’ve been thinking about becoming a property investor but you’re not really sure how to go about it. Don’t worry; I’m going to give you a few tips to help you on your way.
But before you make any big decisions don’t forget to speak to the experts! Here at HomeSource we offer a specialised lawyer service which is very affordable and you can ask any questions about the buying process. We also have accredited financial planners who can offer you their expertise with money matters.
So back to my tips for successful property investing! The first thing you need to do is: Look at your budget. How much money do you have to play with? Once you have determined your budget you can start to get an idea of the types of properties you can afford.
Be prepared for the future! Interest rates are at an all-time low so when working out your figures add an extra 1–2% onto your outgoings. This will prepare you for rising expenses in the future – meaning you won’t get caught short and find yourself entering the negative gearing roller-coaster.
When budgeting also consider: property management fees, repairs and maintenance, council rates, water charges, loan charges and the loss of rent if you struggle to find a tenant. RentSource.com.au can offer you huge discounts on property management fees!
Do your research! Read property related articles and get an understanding of the current market.
Research and compare the suburbs that you are thinking of investing in. Chat to the local council and ask about future infrastructure and developments. This is good for sourcing up-and-coming hotspots.
When looking at new areas, hang out where the locals do. Go to the local bar, café and get talking to the locals. Ask them why they like living there. You’ll be able to get a good indication of the pros and cons of the suburb. Remember to always look with “investment eyes” only. Do not get emotionally involved when making purchase decisions.
Understand the target market. Different locations and property types will appeal to different target groups. Young urban professionals, uni students, families etc all have different needs and wants. Which group are you targeting? Don’t judge the property on whether it meets your needs by ruling out a property because of the design, colour or features because you could miss out on a fantastic investment opportunity.
Forget prejudices! There are suburbs that people will advise you not to buy into. However looking around these suburbs with fresh eyes and not having any preconceptions can sometimes work in your favour! Prejudices can be forgotten over time and you will be grateful that you bought into the suburb while it was still cheap.
A good investor looks at the figures, potential growth and rental yield. A good place to look is On the house. This site allows you to research the sales history of properties, analyse comparative properties and monitor the performance of properties over time. It also allows you to view how much properties have been rented at over time too.
Choose the right loan. There are lots of loans options available to you. Everyone has different circumstances, needs and requirements. You may want certainty of a fixed loan, the flexibility of a variable loan or you may want the best of both worlds and opt for a split loan. There is also the option for an interest only loan too.
Speak to a mortgage broker or a financial adviser; they will be able to outline the pros and cons and advise you on the loan that is most suited to your needs.
And finally the most important step in the process; talk to the professionals! Buyers agents, estate agents, financial advisers, lenders and fellow property investors will be able to share their experience and specialist knowledge about the market. Listen and absorb their advice!
So don’t forget to prepare, research, and talk to experts. Remember, all investing comes with risk. Do your homework to make sure that what you proposing suits your circumstances. And if you need help, join us at www.homesource.com.au/access or call us on 1300 733 420 to speak to an expert today!
With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now