Navigating the world of property investment can be complex for first-time investors. However, it doesn't have to be a daunting or difficult process, provided the right education is acquired and guidance is in place.
Top 10 Tips For New Investors
01. Have A Plan.
Property investors who fail to prepare, they should prepare to fail. 75% of investors only ever get to purchase one property and the vast majority sell within a few years at a loss. It is imperative to know what you are aiming for, with what and for how long?
02. Have A Budget.
The budget for me is a simple one. Be ultra-conservative in terms of what a property could cost to hold. One of the biggest reason’s investors don’t succeed is they can’t hold during tough times and forced to sell. A good accountant and/or financial planner can help you set out your strategies and structures.
03. Use A Good Mortgage Broker.
A good broker will make the world of difference in terms of getting the best deal for your circumstances, helping you through the complexity of borrowing money today, applying good old fashioned customer service and form a long-term meaningful relationship.
04. Do Your Homework.
There is a detailed level of criteria required in the consideration phase of an investment property purchase. My recommendation for first-time investors is to stay educated on the macro and micro investment fundamentals and also the trending topics that may emerge, such as lending and consumer sentiment. Learn more about the macro and micro fundamentals to master for property investment success here.
05. Use Your Brain, Not Heart.
This is so easy to say but very difficult to follow. Where you want to live and spend your life is a matter for your heart. Where one wants to make money is a quite different story altogether. There are macro and micro fundamentals that are imperative to understand what a market will become in years to come, a market that should show good growth, have very little vacancy, that attracts decent tenants and owner-occupiers alike.
06. Don't Listen To Family and Friends.
Once again be guided by unbiased, independent expert analysis, not friends and family who may have never even invested themselves.
07. Be Patient.
Making money in property takes time. Understand this from the get-go. Property Cycles will generally take 7-10 years. You must be prepared to hold the investment property or properties for the long-term to achieve superior outcomes.
08. Always Have A Defects Report Completed.
Before purchasing any property, it is imperative to have a defects report completed before settling. A defects report can be completed by a Building Inspection company.
09. Use A Successful Property Manager.
Once you have taken the step to purchase your first investment property, naturally you will want the very best tenants to live in the property. To save you slaving hours away trying to find this person/couple/family, lean on the expertise of a successful local property manager. A good property manager is worth their weight in gold. Again, looking for decent referrals is key.
10. Evaluate Your Plan, Yearly.
Every 12 months try and evaluate your plan….”How has the market done, am I in a position to purchase again, do I sit for a while, what is my next move?”
The Next Steps
Looking to get the property investment conversation started?
Or, just looking to stay in the loop?
Warren Jacobs - National Business Development Manager at Meridian Australia
P: (02) 9939 3249
Disclaimer: When considering purchasing a property, it's always prudent to seek the advice of an appropriately qualified professional to determine which strategy is most appropriate for your circumstance.
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