What key features set one investor out from the rest? Read on to discover 5 of our proven steps investors rely on to ensure they make the right decisions with property investing.
1) Research, Research, Research
You won’t make a better investment decision than if you thoroughly do your homework before committing to a property. If you don’t already, start regularly reading property blogs and investment websites, and consider attending some local seminars to gather additional information.
2) Speak with Your Accountant
Before anything else, you need to understand both your financial situation and the tax implications of property investment, and there’s no-one better to discuss this with than your account. They’ll be able to help you work out:
- Negative gearing, and whether it’s the right choice for you
- Whose name should be on the contract if you’re buying an investment property with someone else
- How much free capital they think you have to spend each week on an investment mortgage
3) Study Local Market Information
Look at the cold, hard facts shown in local market data. There are a number of resources you can access for different regions, including CoreLogic RP Data, APM Price Finder and realestate.com.au all give valuable information on the property markets in separate territories and states. On top of this, the majority of local council and government websites will host community profiles that’ll give you an insight into any planned developments within the area you’re looking to target.
4) Get Pre-Approval on Your Investment Loan
This is a key step, as it’ll ensure you’re prepared to commit to the purchase of the right property as soon as it hits the market. Although not a total guarantee, a pre-approval is a green light from a lender for buying a property. It’ll give you a clear idea of your borrowing power and put a cap on what you can spend. If you don’t have pre-approval, you won’t be able to confidently place a bid on a property.
5) Experience the Neighbourhood for Yourself
There’s no better way to judge the success of an investment property than by walking around the neighbourhood yourself. As a general rule of thumb, you should never buy an investment property without visiting it and its surroundings yourself at least once. This way, you’ll be able to get a hands-on feel for the area, as well as the sales prices and other types of properties that are currently on the market.
Walk down the main street during the daytime and take in your surroundings. Are shops open, or are there a couple of them boarded up? Are there a lot of other people around, or is it relatively quiet? Do the same in the evening and you’ll be able to build up a picture of how strong the local economy is.
This will also help you to understand how much you should be willing to pay for the home and how much you can reasonably ask for monthly rent.
The information and links provided on this website are for general information only and should not be taken as constituting professional advice. This information does not take into account the financial situation or particular needs of individual readers. Before making any decisions about matters discussed on this website, you should consider whether it is suitable for you in light of your own circumstances, and seek appropriate advice.