No doubt you’ve been exposed to the ongoing buzz around investing in property in Australia. Commentary on the subject constantly fills our newspapers and newsfeeds, making it difficult to miss. However, this is all with good reason. The Australian property market is strong, resilient and often pays dividends.
It’s easy to understand why local and international investors look to our shores to build their portfolio. That being said, only six per cent of Australians own an investment property, as many people become overwhelmed throughout the process due to what they perceive as challenging protocols and procedures.
But whether you’re looking to invest in property for a home, or to build a portfolio, it is far more achievable than many realise. To assist you in your decision to invest in property, we’ve narrowed down they key steps to help you along the property investment journey.
Get your finances and pre-approval in order
First things first. Find out if you quality for a loan, check your credit rating and consider reducing your overall debt. Understanding your overall financial position is important before you embark any further on your investment journey.
It might sound obvious, but taking the time to check your financial status will ensure you know your borrowing capacity, and once you understand this, you can develop a long-term strategy for your investment objectives. Consulting a financial professional at this stage is advised to ensure the structure of your mortgage lends itself to further investments down the track.
Seeking approval from the bank via your mortgage broker, will speed up the process when you’ve found the property you’re willing to purchase. Having your pre-approval in check prior to meeting with a seller’s agent can be used as leverage or bargaining power for those keen on a quick sale.
Be clear with your objectives
Why are you investing in property? Hopefully not because the media is telling you to, but perhaps you want to build up your wealth for retirement. Or grow your equity to eventually buy an owner occupied property? All investors have different objectives, the key is to identify them early so you and your broker can develop an appropriate strategy to achieving them.
Having a comprehensive plan in place prior to investing will help to ensure you don’t embark on an emotional purchase, but rather a rational, strategic decision. As an investor, it’s important to leave your emotions at the door and make decisions from a logical point of view. This means viewing properties that make a smart investment choice, rather than properties which fit your own personal preferences.
Do your research
You know what they say – location, location, location. It really is that important. But it’s more than just the geography that’s determines a strong purchasing decision. Do your research and understand the demographic profile, rental yields, walk scores and local infrastructure before you consider investing in a specific location. Engaging with key professionals will assist in narrowing down these areas to identify where a strong investment opportunity will lie.
Invest in people
There is a wealth of knowledge out there, so make the most of it. Surrounding yourself with trusted professionals who understand the financial and property landscape will take the unwanted stress out of your purchasing process.