As a first-time property investor, you are probably hearing various things on what to do and how to go about it, but is there such a thing as the right way to getting your foot in the door when it comes to property investment?
The two worst things you could possibly do
With 1,764,924 people in Australia who own investment property, and a patchwork of property markets at play what is the worst thing you could possibly do?
It is being too impulsive or cautious. Acting impulsively on the first house deal that you come across as a first-time home buyer can wreak havoc on your finances and you could also miss out on other great deals on the market.
That is why it is important that you think a deal through, research and compare the market for something that is suitable for you. Acting to cautiously due to the over-analysis of various statistics on a limited market pool can have you overlooking good investment property that can be found in other places either than the big apples.
It could also cost you in cashing in on a house that will make you receive great returns. The only way you can beat such mistakes is by enlisting professional help through a financial advisor and estate agents who will be able to help you make a sound decision. Take your time when investing to make sure that it makes financial sense in your financial decision.
You will have to crawl first
Building a quality investment portfolio doesn’t happen overnight. Biting more than what you can chew by rushing to invest in a property that you cannot afford can create a financial burden for you. Even if owning multiple investments is something that you can afford, it will still be a management nightmare to keep up with.
72.8% of the 1.7 million people who own investment property Australia only own one, while 0.9% of the Australian population owned six or more investment properties. It takes a gradual increase of accumulating more over time. You first need to understand all the costs that come with homeownership and other expenses. The best option is to start off with one property until it is stable and generates enough finances for you to buy your next property.
Get your finances ready
When investing in property even if it is for your personal use you need to see it as a business transaction. Something that you could sell one day, therefore you want to get as much return on the property as possible. This is why it is important to set financial goals after you have found the right property in the right neighbourhood.
Corelogic released some interesting numbers that revealed just how big the property market is in Australia is. It found that the Australia property market experienced a $21.2 billion worth of owner-occupier housing finance commitments of which $6.4 billion were refinances and 11.9 billion of investor mortgages.
When looking to get the key that unlocks your opportunity of investing in your first property it is important that you sit down and work out every cost that could possibly arise from it. This means also considering the changes in the property market. The next step will be to compare various home loans that are available on the market to finding something that is affordable and has the best interest rate.
The same way that you would take your time when investing in a property, and be looking at various angles needs to be applied to a home loan before you end up with a loan that will be hard to maintain.