Starting out as a property investor ? Seven things to keep in mind..
There are many reasons to own on investment property, wealth creation, an asset for retirement, regardless, there are a number of factors that need to be considered.
Long term planning:- be very clear about what you want to achieve and within what timeframes. More often than not buying an investment property is a long term strategy.
Budget :- Understand how much you will need to spend on your property, how much you will need to borrow and what will be the associated costs to hold the property. Also consider other costs such as renovating the property, Insurance, Property Rates, Land tax implications and any ongoing management cost.
Research:– Undertaking research is an often overlooked step. Buying the right investment property in the right location is one of the most important elements to consider. Meet with local real estate agents and check out their “for rent” lists. Ask what type of properties are in demand for tenants as well as current rental estimates.
Finance:- Now more than ever lenders are being quite diligent when assessing a customers ability to repay their loans. What type of loan is best for you and your needs can make a big difference to the success of your investment. Seek independent advice from your accountant as to the right loan structure and meet with your lender or Mortgage Broker well in advance of your purchase to ensure you have your loan approval in place prior to committing to a purchase.
Management:- Landlords have two choices in regard to ongoing management of the property. You can either manage the property yourself or engage with a professional property manager, typically a Real Estate Agency. A Real Estate agency will take care of locating tenants, rent collection and any issues that may arise from time to time in regard to Tenant Law and maintenance of the property.
Investing in property can be an excellent way to build wealth , but it should always be approached like a business. Set your goal, develop a plan and work within your budget.
If you would like more information in regard to investing in property the team here at Barry Plant Rowville would be more than willing to assist with any questions in relation to the market, expected Rental returns and Property Management information.