There’s a fair chance that one day you plan to buy a property and rent it out as an investment. This is a super popular way here in Australia to add an extra income stream to your all-important bank account.
The Australian property market has experienced a boom over the past decade and there is no sign of it slowing down. Seasoned investors and professionals alike have taken full advantage of these market conditions, buying up properties ripe for the next generation of renters that have all but been priced out of the market.
For all those that succeed at investing, there are many who have failed in the face of rising interest rates and poor financial planning. So before you enter the property market, make sure that you do your research so you can be prepared for the complex world of investment properties.
Here are five things for you to consider before investing in property:
1. Finance options
Is it feasible for you to invest in property? Can you afford to have your money tied up in mortgages in the short term? Many property investors get caught out by stamp duty fees that far and exceed capital growth when investing in the short term so it’s incredibly important to consider your financial position before you purchase a property.
2. Set goals
How many properties are you hoping to purchase and when do you want to make the purchase? A defined strategy can help you plan your finances around future purchases and ensure you have the capital required for multiple mortgages and the associated fees.
3. Get familiar with the market
After committing to an investment strategy, where to buy in the market is your next major decision. Where are the areas of the greatest capital growth and do these suburbs offer the greatest rental returns? Speak to an agent to get their thoughts and watch properties prices in suburbs of interest to uncover trends and buyer behaviours.
4. Use property investment calculators
Take to the web and use investment calculators! Homesales.com.au has a dedicated investment property search tool which can help you find investment properties based on your goals. Such tools are incredibly useful when you’re looking into the feasibility of suburbs or if you’re unsure about the different investment approaches and whether to invest with a positive or negative cash flow.
5. Seek professional advice
Speaking to a professional with local market knowledge can be a huge help once you’ve decided on your approach. Agents deal in property every day and will help you finalise your purchase once you’ve decided on which property to buy. Schedule inspections with agents and review all available options in person before you take the plunge. Investing for the first time can be a stressful experience if you haven’t done your research.
SO! Make sure you review all of your options before you make that decision to purchase so that you can be sure that your investment delivers sold returns for years to come.
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Speak to an agent to get their thoughts and watch properties prices in suburbs of interest to uncover trends and buyer behaviors. Investing for the first time can be a stressful experience if you haven’t done your research.
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