So you want to be a property investor?
There is no doubt that the number of Australians who are securing their long term financial security by investing in property has grown in recent years. Many Australians imagine that property investors tend to be older investors with a firm eye on retirement planning, but that is not actually the case. In fact, we have seen a growing number of people becoming a property investor in their twenties, before they actually buy their own home.
So, whilst it is not our role to offer investment advice – that’s something we leave to the professionals – here’s a bit of a summary of the different factors you may want to consider if you are thinking of purchasing a rental property.
Have a plan
Being a successful property investor requires planning. You need to have a clear understanding of what your goals are, and have a financial plan that enables you to service the loan…particularly in the first few years when your outgoings are likely to be at their highest. We would always recommend that you get experienced professional advice in this area before you do anything else.
Your deposit is important
Obviously, the larger the deposit you have, the less you need to borrow and therefore pay interest on. However, saving a deposit also enables you to show potential lenders that you can stick to a budget and have the financial ability to service a loan. So don’t underestimate how important this is.
Think long term
Anyone who goes into property investment thinking they are going to make a short-term killing is either planning on becoming a developer or has been watching too many ‘Reality TV’ programs! Successful property investors plan for the long term, as that’s where the consistent growth comes from.
Get the right advice
The simple fact is that no single expert has ALL the answers. So, plan on getting advice from several sources, and try to build a ‘team’ of people you can trust to guide you along the way.
There’s a difference between investing and gambling
Investing is something that is based on knowledge and experience. It’s not designed to be a game of chance, so don’t fall into the trap of adopting a gambler’s mind-set. Set out to learn as much as possible about every aspect of the property world, so that you can make decisions based on intelligence, not a hunch.
Last, but not least, don’t forget that is you have any questions about the rental market in our part of Melbourne, or you would like to have a chat about what type of property might best suit your own goals, you can give me or one of our Property Management team a call at any time.