Getting Started in Property Investment: The Beginners Guide
Are you looking to turn a dream of property ownership into reality?
Property investment may seem like a big leap at first.
But with some careful preparation and expert advice, you can invest in property with confidence. While there will always be obstacles to overcome in the Australian housing and property market, by knowing what to expect and how to position yourself for success, you can take the steps you need today to wake up in your dream property tomorrow.
Don’t do a single thing without reading this beginner’s guide to investing in property in Australia.
1. Be Clear About Your Real Estate Goals
Being clear about your real estate investment goals is the first step to become a successful investor. Preparing yourself to invest in real estate can be a real challenge at times. You should be aware of your emotions because you cannot become successful in real estate investment with emotions running high.
The property you plan to invest in isn’t a property that you plan to live in. So you don’t need to feel a personal connection with the property. The return the property will give you is more important than the property itself.
Decide what your end goal is – whether it’s capital gain, cash flow, a home for your family or something else. You should create a plan to get to the goal once you have decided upon the final goal. You should have a realistic timeframe for this purpose. Make sure you review the plan on a regular basis since the property market will often change.
2. Decide On The Ideal Property Type
If you plan to invest in an investment property, you should look for something that will give you a high rental demand. You should do enough research to see what type of property that the renters are snapping up quickly and what property is languishing on the market. Do you plan to go for something that is a renovator’s delight or market-ready property or do you plan to invest in an apartment? It is a dream come through if you are able to buy a property that you can rent out immediately.
But you shouldn’t discount the properties with minor renovations. According to the renovation experts from KJ Concreting, “the amount you invest in renovating the house can be recuperated within a short period of time with higher rental returns. Look out for houses that stand out from the pack with a special feature such as a second bathroom, good outdoor space or a garage. These extra features will let the property stand out in the real estate market.”
3. Zero In On Your Location
Location is the most important factor to consider when investing in property. You will have to narrow down your search to find the best location before investing in real estate.
Which areas are performing well in the rental market right now? Are local property prices increasing at the moment? You should separate the heart and head when investing in real estate property.
Consider the distance between your chosen property and the city centre or the local business area. How far is the nearest public transport?
Are there local shops within walking distance? Check the proximity to schools.
These are important things to consider when investing in real estate.
According to the home renovation experts at Glen Gilbertson Floor Sanding, it also pays to do your homework, they note “areas that may look as though they don’t offer amenities may be hotspots for growth in the future. Enquiring about plans for the future, especially in regards to major developments, can help you snap up a bargain that will return major dividends.”
4. Get Your Finances In Order
Speak with a mortgage broker to get free advice on a mortgage loan. Make sure you check how the loan repayments would correspond with your likely rental returns. You should be 100% clean on what your upper limit is – after taking all extra costs into consideration such as conveyance, insurance, inspections, taxes, and property management. You should have a financial buffer in case there are months where your property is vacant.
The experts at Metro Bookkeeping offer an exclusive tip, explaining “getting your finances in order requires a 5 step plan. First create a budget, next save money by starting with a narrow focus and expanding as you build discipline, automate your finances so the decision is out of your hands, pay off high-interest debt first, and finally set a long term goal and start working towards it.”
You should set up the purchase so that it benefits you the most when investing in real estate in Australia. You can purchase the property in your name through the superannuation fund or a trust. But you should also understand how the purchase will affect you and your family. You should get expert advice in order to make a smart choice in this regard.
5. Succeeding In Your Investment
Learning the basics of real estate investment can be a real challenge. Although there are real estate investment opportunities available out there, some market conditions can be more favourable than others. Timing is the key to your success. You are making a big decision when you decide to invest in real estate. So you need to get expert advice for the process.
You should get in touch with an experienced financial service provider who is able to advise you on all aspects of real estate investment. In fact, it’s hard to find good accountants, financial planners, real estate agents, lawyers, conveyancers, valuers, and other professionals. But these are the professionals who can help you to make the best decisions when investing in real estate in Australia
Fiona White is an Australian freelance writer and Sydney-based university student. As an accounting student, she has a passion for learning about global changes in business culture and specialises in entrepreneurship and innovation-related topics. When Fiona isn’t at her desk, you’ll find him exploring National Parks.