Ready to become a property investor? Whether you’re looking for a career change, saving for your retirement or want to
leave something behind to your children, investing in property is a great way to achieve all three. At first glance, property investing may seem pretty easy but there’s a lot more than meets the eye. Here are some questions to ask yourself to gauge if you’re ready to jump into the deep end.
What do you know?
How much do you know about property investing? Do you understand the difference between capital growth and rental yield? Are you aware of buzz words such as leverage or equity and what they mean in the content of property investing? If you’re being honest with yourself there’s a good chance you know a lot less than you think.Start off by reading our blog, we have several posts relating to investing and property management that can help you get on your way.
Do you have a plan?
This is where most people fail, they neglect to have a plan for their investment. Do you intend to renovate and sell (short-term plan), or are you looking to buy and hold (long-term plan) and turn it into a rental property? It’s important to know your goals,because this will greatly affect the type of property you will look for.
Have you factored in the costs?
We don’t just mean the purchase price of the property, but the stamp duty and all other costs associated with it? Without using a reputable Realtor it’s not uncommon to have your property empty for a few months or even longer before you find tenants or a buyer. During the months the property stays empty it’s you who will pay the mortgage. Before you budget for your property, ensure you have reserves to pay off the mortgage during this period.
How will you finance your property?
Unless you have a big lump sum of money lying around chances are you will have to go to a lender. Before you even start looking for properties get yourself pre-approved to see what you can get, this will help shape your budget and give you a much more realistic goal of what you can afford.
Will you manage your property or not?
Buying an investment property is just part of the battle, next you will need to find suitable tenants or a buyer. A property manager may cost between 7-10% of your monthly rental income but they take away all the stress and bothers that come with managing a property. To see what our property managers can do for you, feel free to give us a call anytime.
Have you done your research?
First of all do you know what you should be researching? If the answer is no, go back to our first point about learning and gaining knowledge about becoming a property investor. Location is one aspect of researching, you ideally want to find a place where there’s demand for rentals or homes depending on your plan. Research the target market that live in that location and then buy a property that would suit their needs. For example, if an area you selected is populated with senior citizens, they will value a one story house that is easy to get around. Compare this two a family of 4 who will prefer a big open garden and several schools nearby. Research the location and who your target demographic are. Nobody said property investing is easy but the rewards can be very fruitful. If you’re considering investing in the Queensland area and are in need of advice or properties to
view, feel free to contact us for more information.