Are you considering buying your first investment property?
Purchasing an investment property requires careful consideration and is often the single biggest financial decision a person can make. Now that sounds daunting doesn’t it? Unfortunately, this sage advice scares many people away from the idea of investing when in fact all that is needed is simple consideration. Anyone can do that, right? You consider things on a daily basis. Where is the best place to service your car or which internet provider and package meets your needs? Now, investing is no doubt on a much bigger scale but by simply considering your options and engaging the help of experienced professionals all of a sudden something that once seemed overwhelming and risky becomes a very straight forward process.
You don’t need to know everything about property investing to make property investing a success for you. Knowing a few simple key steps to get you started and who to engage and when, will who help you get on the path to property investing sooner.
- Always keep in mind the reason why you want to start investing. This will act as a beacon to keep you on course and focused on your goals when the myriad of investment options are inevitably presented to you. What is my goal? Is it to give up my job, help my children, retire rich, have extra income, or retire sooner.
- Once you have your goal in mind spend time considering the risks and rewards from property investing and speak to a licensed financial planner and your accountant. They more often than not have a network of other reputable professionals who they can recommend to you to help guide you through the process of investing.
- How much can you borrow? It doesn’t cost anything to get finance pre-approval and it will save you time and energy by informing you early on in the process what your limitations are and help you narrow your property search before you waste hours looking at potential investments that are outside your borrowing capacity.
- Be patient. Whether you decide to use a buyer’s agent or undertake the search yourself this principle applies. It is tempting to want to go with the first property that you like in your price range, after all, you have already put a lot of thought and effort into buying an investment so you are no doubt biting at the bit to get the deal done. Patience and focus can be the difference between a good investment property and a great one. Remember, you are playing the long game, a few extra weeks or months waiting for the right property will serve you well in the long term.
- Stay focused. Now, your excited and you just love the property you viewed this morning and you want to make an offer? Hold on. What you love and what will give you a good return on investment are not the same thing. While you might think the northerly aspect and open plan kitchen are wonderful unless the math adds up too then forget it. Many people fall into the trap of thinking if they love a property so too will their prospective tenants, and maybe they will, but will the return on investment ensure your financial goals are met.
In part 2 we will go through the steps from the offer stage to having a tenant move in and ensuring the long term success of your investment.