Tips For New Investors
In Australia, there are over two million property investors.
While most start with the intention of building a wealthy portfolio, only a few reach the top treads of the property ladder.
Long-term strategy and smart preparation are your keys to success.
Ready to start your investment portfolio?
Follow these tips first.
Set realistic financial goals first.
Then select an investment strategy to match.
Are you looking for cashflow, capital growth or a mixture of both?
Emotion vs logic.
Don't let 90% of your decision be clouded by emotion.
Instead, focus on finances over fixtures.
Consider if the property is aligned with your strategy, offers the gains and returns you need, and appeals to the target renters market you're seeking.
Understand the market.
Invest time in solid research.
Without knowing the market, how do you know which type of property will suit it?
Location is critical.
When researching locations, ask yourself:
Is the population growing?
What are similar properties selling for?
Are there proposed developments in the area which may affect prices?
What are the average rental returns and vacancy rates?
Are there local amenities, such as public transport, schools, shopping centres and parks?
Calculate all costs.
There are more costs to consider beyond an initial deposit.
Budget for contingencies, land taxes, rates, insurance, maintenance and management fees.
A good rule of thumb is to allow 10% of the property's value for these costs.
Other costs include:
Stamp duty, loan fees, valuation fees, building and pest inspections, lenders mortgage insurance, legal fees and conveyancing costs.
Take the plunge.
It really doesn't take long to build yourself a very powerful property portfolio.
You just need to identify your goals, develop a strategy to suit and get started.