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Your Property Investment Made Easy

Property investment doesn’t require you to have a double degree or a doctorate. All you need is some common sense, sound advice and you should remember to keep your focus on the end goal.

It really is that simple. There is no need to drown yourself in market analysis or study like you are sitting an exam. It is much like learning to ride a bike – take it easy and go slow, stay within a comfortable zone and beware of big risks. Property investment is no different, so here are a few key tips to get you started.

Property investment doesn’t require you to have a double degree or a doctorate. All you need is some common sense, sound advice and you should remember to keep your focus on the end goal.

It really is that simple. There is no need to drown yourself in market analysis or study like you are sitting an exam. It is much like learning to ride a bike – take it easy and go slow, stay within a comfortable zone and beware of big risks. Property investment is no different, so here are a few key tips to get you started.

  1. Bite the bullet and buy!

There is no time like the present and hindsight is a beautiful thing. Don’t catch yourself thinking ‘I should have bought last year when the market was better’ because if you don’t take action now, you will never know how good it could have been! More importantly, you will miss out on the money you could have made.

It is also important not to saturate yourself in market research because this can often result in information overload and confusion. While you are caught up analysing last decade’s market trends and procrastinating over the current state of the property market, someone else will snap up the property you have your eye on, secure great tenants and watch the investment grow when it could have been you!

  1. Stick to your plan

Jumping blindly into any type of investment is a fast way to lose money, so make sure you devise a plan of what you would like to achieve from the process and where you would like to be financially. This could be as simple as selecting an area you want to live in eventually and putting a rough time frame on achieving this goal.

Think about why, when and how. These three questions will give you the answers you need to get started and then you need to stick to the plan. The purpose motivates you; the vision keeps you focused and the strategy makes it practical and achievable.

  1. There is no such thing as ‘get rich quick’!

Rome wasn’t built in a day and property investment doesn’t profit overnight. Remember when it comes to property it’s more important to focus on the length of time you spend in the market, not necessarily the state of the market. History has shown the longer you hold your property, the more time it has to grow in value. If you are looking for a quick return on your investment, the property market probably isn’t right for you.

  1. Buy where there is demand for rentals

Think about what tenants need and what your selected suburb offers. Does it offer employment, conveniences, entertainment, transport, parks and lifestyle opportunities?

A location with all these features will increase demand for your property, often resulting in the value of your investment going up. It is also worthwhile considering developing suburbs which donot yet offer all these features but will do so in the near future. You should be able to secure a home for a slightly more competitive price, safe in the knowledge the appeal and demand for your property will only continue to grow over time.

  1. Buy something that is practical and functional

Tenants come from all walks of life including young couples, singles, families and pensioners. Of course the type of property you buy will appeal to some demographics more than others but if it is practical and functional with everything in good working order, then your chances of securing tenants paying top dollar will be increased.

Look for good quality fixtures and fittings, durable floor coverings and window treatments, adaptable living spaces and low maintenance gardens. You can also never have too much storage space!

  1. Realistically assess your finances

Always make sure you stick to your budget. It is so important that you take a realistic view of how much you can afford to invest and don’t be overly ambitious. There is a very fine line between a financial challenge and mortgage stress so don’t over commit yourself.  Just because the bank will lend it to you doesn’t mean you should borrow the maximum amount. You need to have sufficient flexibility to adapt if there are changes to your own financial circumstances or market conditions such as interest rates. Plan for the worst rather than hope for the best!

  1. Buy at a fair price or better

You don’t need to find the bargain of the century to justify a purchase. Sure, it’s great to get a fantastic price on a property but remember to take your time and look around. Similarly, spending weeks or months negotiating on one property may end up being an overly stressful (and time consuming) experience that leaves you empty handed.

Always remember the golden rule – if something seems too good to be true, it usually is!

  1. Buy for capital growth if you have the time

All investments are about generating wealth. We need yield to help service the debt over a property but yield will never generate you the wealth you need to give you financial independence. Focus on properties that will generate above average capital growth so you can service your debt as well as watch your investment grow.

  1. Repeat points 1 to 9!

When you can afford to, purchase another investment property. Review and improve your plan and follow the same steps again but remember not to put all your eggs in one basket. Just because your investment performs well doesn’t mean you should buy your next five houses in the same suburb because if that suburb suddenly stops performing, your entire portfolio suffers. Diversify your portfolio and balance your investments. This will provide increased stability and improve your chances for long term prosperity.

 

DISCLAIMER:This information is of a general nature only and does not constitute professional advice. We strongly recommend that you seek your own professional advice in relation to your particular circumstances.