Buying investment property: Where do I start?
Maybe you’ve owned your home for a while, now. And now that your life is feeling reasonably stable – you’ve settled down, bought a house, had some kids – you’re thinking about your financial future and ways you can actively get ahead. Perhaps you’ve had friends or colleagues who’ve bought investment property, and you think it might be something that you, too, can manage. The problem is, you don’t know where to start.
If this sounds like you, you’re not alone. Certainly, for many people, buying an investment property can seem overwhelming, but the process is actually pretty straightforward. With a little bit of thought, planning, and lining up your ducks in a row, you can be well on your way to securing your financial future through real estate investment. The following steps can help you get started.
Determine your financial goals
Before you do anything else, think about what you want your financial life to look like. In other words, what kind of life do you want? Presumably, it involves building your wealth so you can have the financial freedom and security to do what you want, whether it’s to enjoy a comfortable – versus a modest – retirement, own a bigger house, splurge on international holidays every year, or help your children get on their feet financially.
Next, think about whether and how an investment property fits in to this vision. By achieving high rental yields or by selling at a profit after a number of years, many Australians have found investing in real estate to be an excellent option for achieving the above goals.
Understand the costs
It’s important to keep in mind that the cost of purchasing an investment property is not just the sale price for the property itself. There are a number of other costs to be aware of, including:
• stamp duty
• conveyancing costs
• legal fees
• costs for inspection reports
• ongoing maintenance and repairs costs
• property taxes
• council rates
Look closely at your finances and create a budget
Once you understand these costs, it’s time to figure out whether you have enough cash to make the mortgage repayments and cover those costs – without having to resort to a permanent diet of bread and water. Take a hard, honest look at the numbers to see whether you can truly afford an investment property.
If you determine that you can indeed proceed, you’ll then want to set a clear budget and stick to it so you can stay on track towards your financial goals.
Consider calling in the experts
Though none of the above is too difficult, it can be time-consuming and sometimes a little confusing. Often, it’s a good idea to get some professional advice and help. After all, this is what the pros are trained to do. They understand the ins and outs of the real estate market. They can help you make sense of the numbers and answer any questions you might have. They’ll look at your individual circumstances so you can make the most informed decisions concerning whether property investment is the right financial strategy for you. What’s more, if you do go down the investment property route, they can help you look at financing options, help you execute your plan, and provide ongoing support.
If you’re thinking about buying an investment property, Allied Investment Group can help. Call us today on 1300 886 149 or request a Free Consult.