Real Estate ownership in Australia still remains the dream for most people. And for many that extends to owning their own investment property.
Many people read online articles, reports, books and keep track of interest rate changes. But when it comes to taking that first step are still unsure how to proceed.
If this sounds like you, don’t worry. You’re definitely not alone.
Despite a large number of Australians being keen on property investment. Only 8% of us actually own a property of their own.
The reality is, investing in property can be daunting, but it definitely isn’t as complicated as people think.
Here are the 8 steps you will need to get your foot on the property ladder.
1.Check Your Finances
Understanding your situation let’s you plan and know what you might be able to do and what you might want to do.
Don’t assume that you won’t be able to afford to buy an investment property. It pays to look around as different lenders have different rules and criteria dictating whether they give you a loan. Not all are created equally for investors.
Pre-approval is given by a lender are sets out how much you can borrow. A mortgage broker can take the heavy lifting off your shoulders and get your pre-approval for you if you are unsure if you can invest.
They are also paid by the banks if you use their services to get a loan. So, there is no cost to you.
3.Set yourself a target or goal
What is your end goal? Where do you want to be in 10 years, or by the time you retire?
You cannot achieve a goal that has not been set. So, get a pen and paper and write them down. Then make a plan to reach your target.
If you want to retire in 10 years on the returns from your investments, then create a 10-Year Plan.
4.Understand your risk-profile
Are you someone who likes to take a higher risk approach to potentially gain better returns? Or do you prefer a lower-risk more secure return?
5.Create a budget
Yes. The dreaded B word. Almost a swear word these days. Budgeting is the only way to ensure you’re able to balance your incoming and outgoing funds. If you don’t understand them, you can’t control them.
Lender’s are stricter than ever with checking your expenses. So, if you make a budget and discover you’re spending big on streaming services and UBER Eats, then it might be time to put some limits in place.
6.Create a purchase plan
- Define your strategy
- Set criteria
- Speak with an advisor
- Do your due diligence
Even if you use the services of an advisor like many people do, it always pays to be informed so you better understand the decisions you are making.
There is no such thing as a sure thing but speaking with someone from the industry can certainly help you understand the current environment and what strategy might best suit your circumstances.
If you are 35 with 3 children, your strategy might be very different to a 55-year-old single person.
8.Don’t get distracted
It is easy to put investing in property into the too-hard basket. People naturally tend to feel overwhelmed when venturing into unfamiliar territory (This doesn’t just pertain to investing!)
Stay focused. Be clear on what you want to achieve, set deadlines and work towards achieving them.
Property investment returns come from amount of time in the market. So the sooner you enter the market, the sooner you are able to see return.
P.S. Don’t forget: There’s no cost to you and no obligation to work with us or do anything after your consultation. It’s simply a no-risk way for you to speak to a professional about improving and growing your wealth safely and effectively.