This article was originally published on iBuyNew.com.au and has been reposted here with permission.
Almost anyone can invest in property, but before you start, there are a few essentials that you need to consider first to ensure you get the best results and not go in blind and make a big mistake that will come back to haunt you. To help you get started, here are our top 7 essentials you need to start investing in property:
1. A Solid Plan
The first thing that you need to do before anything else is making a plan. You need to decide what your goals are as well as what your purpose is. Are you looking to invest to provide an additional income or maybe you want to build up your savings faster to lead a more comfortable retirement? Whatever the reason, make sure you write this down clearly as your goals to work towards. You need to also consider how many investment properties you want to purchase as this will affect what you buy and your future property portfolio.
As part of your plan, you also need to work out who you are buying the property with and how much you can afford, as well as the type of property you want to purchase such as off the plan or an established home.
2. Understand your budget
The next question you need to think about, which forms part of the planning stage is how much you can afford, what your income is and what outgoings you currently have. This will determine how much money you currently have available and whether you can buy straight away or need to continue saving first. If you have any bad debt such as credit cards or car loans then now is the time to pay these debts down, which will allow lenders to look at you more favourably when the time comes to apply for a mortgage.
3. 10% Deposit
When investing in property, such as off the plan, a 10% deposit is typically required to secure it. As well as putting money away each month from your income, you can also try to reduce your spending and the number of overseas holidays to help speed up the savings process. If possible, you could always ask your parents for help, as the longer you leave it, the more expensive properties tend to become and the harder it is to find the deposit with property prices outpacing income growth. If you have your 10% deposit ready now, then the best thing to do is buy a property today.
You should also make sure you have some emergency cash saved up as well in case you need it, such as covering the costs when your property is vacant. Buying a property off the plan helps you with this as it gives you more time to save up a buffer with typically longer completion times of 12 months or more.
4. Mortgage Broker
Another essential thing you require when investing in property is the expert help of a mortgage broker. Be sure to find a mortgage broker who is reputable and experienced, who is used to dealing with investors and buyers of off the plan property. Mortgage brokers will be able to help you work out your basic budget and what deposit you require, which won’t put you in financial difficulty. Once you know your maximum budget, you will be able to narrow down your search options and focus on properties that sit comfortably within your budget.
5. Property Consultant
As well as working with a mortgage broker, it’s also essential to have a property consultant on board. A property consultant will know the property market inside out and will be able to advise you which properties sit within your budget that best meet your requirements. They might even have access to properties that have yet to be released to the market, allowing you to have first access to the best stock before the public. Be sure to get on their email lists and book a meeting face to face.
Another important team member to work with is an accountant. They will be able to help make sure you are maximising all of your tax benefits and if you own more than one property, they will be able to structure these correctly and complete your tax return for you every year. And remember, their services are tax-deductible.
7. Motivation and Discipline
Finally, an essential personality trait you require when investing in property is motivation and discipline. You will need to be motivated and disciplined to start looking for properties allowing you to take action and make a successful property purchase!
To find out more about investing in property and how to get started, get in touch with a property consultant from iBuyNew. Click here to learn more.