02 Aug Getting Started In Property Investment – Some Simple Steps
‘There is no time like the present.’, we often hear this expression, but does this apply to property investment?
Well, this definitely doesn’t mean that one should jump in and get started when you feel the urge. So, how can a new investor know what time is the right time to invest in a property? We’ve put together some Simple Steps to Getting Started in Property Investment which we hope will help!
We all know that the best investment one can make is a property investment and most of us are always searching for a good property deal in newspapers, magazines and on the web. The entire process is quite overwhelming, but it’s not surprising to see that most investors quit even before they’ve begun. Investing in a property without knowing what you’re doing is a brutal sin for your finances. So, listed below are some simple steps to get you started in property investment without losing your mind.
Simple Steps To Getting Started In Property Investment
1. Have a thorough record of your finances
Make it a habit to list down your assets, incomes and expenses so that you know the amount of money that is available for investing. It’s always good to maintain a record of your finances. Once you know that you have a reasonably stable income, you can think of applying for a loan.
Investing in a property is a proven road to building wealth, but since this is a long term investment, you should consider and ensure that you can afford to maintain your mortgage repayments over the entire tenure. Once you own the property, it’s easier to service the loan because you can earn rent as well as claim tax deductions on expenses associated with it.
2. Set your goals for property investment
What are you looking to achieve with this investment? List down your financial goals with deadlines and work backwards to start achieving them. Speak to as many people as possible and do your research. Consider what is the best investment plan with the current cash flow and refer to average rents, property values, demographics and suburb reports.
3. Start budgeting
Budgeting is a key to strike a balance between income and expenses. It gives you a clear idea of your spending and helps you plan for bigger expenses down the line. Use a budgeting app to keep a record of your monthly expenses. Ideally, you should start budgeting at least a year in advance before purchasing a property.
4. Risk-taking attitude
Understand your attitude towards risk in property investment. Remember that property is a long term investment and that the present price cannot be relied upon. Take a long term view of your investment and prepare yourself to commit to the investment plan.
5. Employ a team of experts
Get a great team of experts and mentors on board. Even Bill Gates has a mentor who he still goes to for advice and guidance. You don’t need to do it all on your own.
Your ‘Team’ may consist of a Property Investment Specialist (such as Property Asset Planning!), a Financier, a Financial Adviser, a Conveyancer, an Accountant, an Estate Planning Specialist (i.e. Wills) etc – all of whom should be expects in property investments.
6. Create a purchase plan
An ideal purchase plan is the one that facilitates your portfolio to meet the growth objectives that you are aiming for. Buying a property is easy enough, once you have the deposit, the borrowing capacity and a purchase plan in place. Don’t simply invest your hard earned money in a property because it seems like a good deal or it looks nice. It’s important to have a purchase plan in place with approximate returns or profits that you expect out of the investment. If you’re simply making a property investment to save tax then ensure that you have calculated in advance whether doing so is to your advantage.
7. Stay focused
Buying an investment property should be a very calculated decision and not an emotional reaction. Stay focused on what you wish to achieve with clear dates and numbers in mind and identify key milestones during the entire process. It’s easy to get overwhelmed, but if you’ve done your research correctly, chances that are 10 years from now, you could be sitting back, feeling happy, secure and proud with great investment returns on your property.
If you wish to seek advice on your property investment goals, talk to one of our experts at Property Asset Planning.