Investing in property can be a smart way to grow your money and get yourself set up for the future. If you’re lucky enough to own your own home and start thinking about an investment property, you could soon have an important part of your retirement plan hashed out. Choosing your first investment property is no easy matter, however, and you need to make sure you don’t rush into it. There’s a lot to think about if you want to make sure you make the right choice, especially if you want to grow your property portfolio in the future. Take some of these tips into account if you want to choose the best investment property for your first time.
Consider Your Goals
Whenever you make any investment decisions, it’s always important to think about what your goals are. You don’t want to start investing your money in anything without knowing why you’re doing it. Property is usually a long-term investment, unless you want to try the option of “flipping” houses, which can be very difficult to do successfully. So if you’re thinking of investing in property for the first time, you’re likely doing so with a view to making a considerable profit in the future or perhaps producing a steady income now as well. Your goals will help to inform any decisions you make about what sort of property you want to buy and how to handle your investment. If you need help defining your investment goals, visit www.investors.asn.au.
Think About Possible Investment Styles and Opportunities
There are various ways you can get involved with property investment. You should think about how you might want to do things before you forge ahead. Many people take their first dip into property investment with a buy-to-let property, renting out a residential home to long-term tenants. Others might buy a holiday home they can rent on a short-term basis, or perhaps even consider commercial or mixed-use property. If you can afford it, there’s also the option to buy a property that needs some work, make some improvements and sell it on. However, this can be difficult for beginners, especially as you need to make more money when you sell than you spent on fixing up the property.
Research Potential Locations
If you want to buy an investment property, it doesn’t necessarily have to be in your neighbourhood. There are so many options for where you can buy property, including in other countries. Casting your net out wider gives you the opportunity to find the ideal market and choose a property in an area that’s on the up. However, you do need to consider the difficulties of owning a property that isn’t close to you. Who will you get to manage the property? How often will you actually be able to go and see it yourself? Before you look elsewhere, research areas close to you that could be potential options.
Make Sure You Do the Sums
Any investment decision needs to take into account whether it’s going to make you money and when. It’s essential to run the numbers so you can work out how much money you’ll have going in and out. Can you charge enough in rent to cover the mortgage, as well as maintenance, repairs, insurance and other assorted costs? Ideally, you should be able to break even or only spend a small amount maintaining your investment, but it’s better if you have more money coming in than you have going out. Your property ultimately should make you a profit, so you don’t want to have spent more on it over the years than you’re able to make when you sell it.
Get Expert Investment Advice
Going it alone when you’re investing in your first property might not be a good idea. Even though you think you can find all the advice you need for free, getting advice and assistance from the experts could be a much better idea. Take a look at www.vystal.com.au for an example of a service that could help you out. You could get the support and help you need not just for your first investment property but any subsequent ones you might want to invest in too. Getting the right advice can make a huge difference to how well you choose an investment property and your management of it too.
Understand the Market
It’s always crucial that you understand the housing market you’re going into before you buy a property. There’s the wider national housing market, but then there are more local markets you need to take into account too. Whether you’re buying close to home or even abroad, make an effort to understand the area and the direction the housing market is taking. You can do things like speaking to estate agents and residents in the area to find out where the neighbourhood is heading. There’s plenty of information available online too, about everything from crime to businesses in the area.
Know Everything About a Property Before Buying
When you’re looking at properties and think you might have identified one you want, you can never be too careful before you buy. Ensuring that you know all there is to know about a property before you purchase it is crucial. You need to find out about the history and the condition of the property so you can identify any potential issues in advance. If there are any problems, it doesn’t mean you should avoid the property, but you should take into account that you need to address them.
Consider What Renters Want
If you will be investing out your investment property, it’s worth thinking about what tenants want before you buy. Think about whether it’s for residential or commercial purposes, or even for short-term renters who might be visiting for anything from a few days to a few months. What’s in demand in the area you are considering, and what do people in those demographics look for in a property?
Your first investment property could be the beginning of a larger portfolio. Make a wise choice for your first time, and it could set you up for the future.