For those in the know, property investment can be extremely rewarding. However, it takes much more than a few seminars and a solid deposit to come out on top. From unyielding research, comprehensive knowledge, an abundant understanding of the industry and innate instincts to pursue opportunities as they arise – all play a role when it comes to becoming a successful real estate investor. 

Too frequently these days we witness newcomer investors buying property under the premise of – it is now or never! These investors are throwing everything at the gauntlet while they can; worried that if they do not buy now, they will miss out altogether. This kind of impetuous attitude is a big mistakes for any investor – investing in property should not be an impulsive buy. Instead, new investors need to take time, do the groundwork and have a rock-solid plan of attack.

To help, we have compiled the following tools and advice for those starting out in the investment world.

1. Understand industry jargon

Like anything in life, knowledge is power. To get ahead in the investment game it pays to do the homework. This involves devoting much-needed time researching the industry and its market… including getting up to speed with current trends and latest reports, becoming familiar with technical terms and jargon and sourcing articles and information from reliable resources (books, magazines, websites, etc.) about property investing and the market as a whole.

2. Have an end goal in sight

Set goals surrounding personal investment achievements and be very explicit about reaching them. For example, investment wise – where do you want to be in 10 years, how many properties do you want to acquire, financially where do you need to be to make this happen.

3. Evaluate your financial situation

Calculating all assets (income, bank interest), expenses (bills, loan repayments) and financial resources (such as other investments, if any) is extremely valuable prior to commencing any investment. Doing so provides great insight and understanding towards the financial situation at hand. It also indicates the available borrowing power by measuring the ability to take on extra debt and avoid overextending financial expenditure.

4. Recognise the risk

The secret to adopting the right property investment strategy comes down to knowing the risks involved and how much any personal or financial situation can tolerate. To help, there are numerous means that can be taken to self-assess a risk profile, including the following:

1. a.     Age – How many years until retirement? The closer to retirement the less risk is taken because there is not time to rectify any potential mistakes and squander the nest egg.

1. b.     Financial buffer – Are there any back-up savings to help in a worst-case scenario?

1. c.      Income – Amongst jobs, property portfolios and other investments is there an access income? If so, how reliable is this income? E.g. If the investor is younger and earning a modest to good income, taking on more risk to achieve long-term goals now could be considered as a way to better your future prospects.

3. Source expert help

Investing in property is about much more than earning rent; it is about preserving a solid cash flow. This in mind, mortgage brokers and accountants are an invaluable resource for any investor – but not just anyone. It pays to find professionals who specialise in property investing; the right mortgage broker can calculate the borrowing power based on each financial situation, as well as advise what loan would suit and how to structure it so the investor can continue borrowing money down the line. Whilst a sound accountant can help structure investment properties to maximise tax deductions and cash flow, structuring investments to minimise tax bills and protect the property investment, and the investor.

Other expert help can be sourced from a trusted real estate agent with years of experience in the investment market.  For sound advice on property, including possible opportunities to break into the local Brisbane market, contact Hannah and the team on 0419 782 133 and setup an appointment.