Less than 6% of Australians, or roughly 1.3 million people, own an investment property, even though property is a national past-time.
It’s not surprising. A lot of people get overwhelmed by the process and quit before they even begin. But it doesn’t have to confound. Reality is, property investing is relatively straightforward.
To help you begin your journey, here’s eight steps to starting a property portfolio on a solid ground, without losing your mind.
This can be as simple as listing all your assets, including incomes and work out your expenses. This will give you an idea how much cash you have available to invest.
Don’t immediately assume that you can’t afford to invest.
As long as you have a stable and reasonably good paying job with solid employment history, you shouldn’t have a problem getting a loan.
You can get pre-approved through your lender or your trusted mortgage broker. Pre-approval can be beneficial if you’re not sure you’re financially ready to invest.
But remember, applying for multiple pre-approvals is not a good idea. Each time you apply, the lender will check your credit record. If there are multiple inquiries, this sends a red flag to the lender and may refuse your application.
Property investors generally invest in property to secure their financial future or to be free to do what they want, when they want it.
In order for you to achieve your goals, you must first articulate what your goals are. More importantly, you need to set a deadline as to when you want to achieve your goals.
Your risk profile will dictate your strategy. What sort of risk can you tolerate?
Getting an understanding of your own attitude to risk will help you create a strategy that reflects this.
There’s no such thing as a property psychic and while there are tried and true methods to research, no one can make guarantees. Understanding your tolerance for risk will help you shape how much you’re willing to take on over the shorter and longer term.
Budgeting is the only way to ensure you’re able to balance your income and expenses.
It allows you to see where you’ve been spending your money and helps you to plan for bigger expenses down the line.
What does an ideal purchase plan look like?
It should facilitate your goals of growing your portfolio to a point where it’s producing the growth or income you’re aiming for. It should serve as a structure for you to stay in the game.
Here’s an example of a purchase plan you can follow:
Use the tools available to you to make an informed decision. Knowing the market can be key to making the right investment choice.
Being informed also means being wary of “get rich quick schemes” and property peddlers.
If someone is promising you guaranteed returns and overnight riches, walk away; the only person getting rich is them.
Make sure you stay focused. Investing in property is a business decision, not an emotional reaction.
It’s easy to get overwhelmed when you’re starting something new and as massive as property investing.
But don’t give up. Just imagine in 10 years, if you buy the right properties this year, you could be sitting back, feeling happy, secure and even proud that you bought properties that more than doubled their values while your peers and everyone else wishes they’d bought back in the day.
Copyright © 2018 Property 1301. All rights reserved.