When preparing to purchase a property you need to have three key things sorted. Know your goals, work out your strategy and finally lock down finance.
When you’re looking to prepare for the purchase of your next or your first property, some people think it’s as easy as, “Cool, I’ve got my money, I’m gonna call up the bank, and I’m good to go.” Now, I believe it’s actually a three, potentially even six, month process before you’ve even bought your first or bought your next property we actually need to start preparing.
Now, if we’re to categorize the main headings or what you’re looking to preparing, I’ll like to break it down to three areas. One, goals, two, strategy, and then three, finance.
So if you’re talking about goals, you’re trying to understand, “What am I trying to achieve long term? What does this next property do for me as part of that long term plan? Where do I wanna go? What am I trying to actually achieve?” That’s your goals, and that can actually be a long process. It could be something you’re discussing on your own, discussing with family, partners, so forth.
Part two is the strategy. So you’ve got where you wanna go, how do you get there? Now, an example of how people work with me on strategy is we actually conduct a free strategy session within the current or new customers. We go through what is it that they’d like to achieve from those goals, and bringing them with a strategy to achieve it?
Some of the risk profiling, and what I mean by that is what are they uncomfortable with? They could be numbers that could prove everything to be perfect, but no matter how much you show this number that looks so good this person just may be genuinely uncomfortable with a certain decision. So that’s where risk profiling helps you.
Here’s an example: I don’t wanna purchase a unit. I just don’t wanna be amongst all the other units, and I don’t wanna be amongst all the other investors as the majority of the units are owned by investors.
That may be a risk as part of your strategy that you’re trying to map out that you want to avoid. This is where you’re now moving into phase three. Looking back at phase one and two, it’s you’ve got your goals and what you’re trying to achieve, you’ve got the strategy or the map of how to get there, now you’re going to the last part, finance.
You might be thinking, “Is that applying for your finance?” That isn’t. With relation to finance, you could actually look at strategies for your finance. When you’re looking into that it’s, “Okay, three to six months leading up to getting my loan, am I comfortable with where if I had a property today, if I had a new loan, a big [Red Bank 00:02:45] shop in my name, would I be comfortable with where I’d put my money, how much I can budget, how much I can save?”
This is where that three to six months before purchasing is a good idea to actually prepare for your finance in the form of a finance strategy. This will allow you to be comfortable with the new dig that you’re taking on, create good habits before you actually apply, allowing the banks to see that you can actually save that much, or you don’t actually spend that much. And that means you’re now moving into the property purchase time with a lot of preparations.
So that’s it in terms of the three phases for property preparation that I like to use. Your goal, your strategy, and your finance plan or your finance strategy.