Buying Your First Investment Property: What You Need to Know
The starting point in any investment decision is to set financial goals. One of the most common mistakes that people make when purchasing property is neglecting to consider exactly what they want to achieve and setting goals accordingly.
For many of us, investing in property is a strategy to grow wealth on the road to becoming financially secure. Purchasing your first investment property can be a long, complicated and emotional process, but preparation will go a long way in ensuring you meet your goals.
The starting point in any investment decision is to set financial goals. One of the most common mistakes that people make when purchasing property is neglecting to consider exactly what they want to achieve and setting goals accordingly. This then directly impacts the properties you consider and will help to narrow your search. For instance, if your goal is passive income and fast capital growth, you will want to look at positively geared properties in urban areas.
From a financing perspective, Harry Bongiorno of Marshall White Finance gives the following advice, ‘It’s important to have the right loan structure in place and quality advice from a mortgage broker can help ensure you get a competitive rate, as well as an understanding of your capacity to make your first purchase.’ Seeking advice from a mortgage broker can help to define your financial position and narrow down the options.
When considering properties, research is absolutely paramount, particularly if you are buying in an unfamiliar area. Look online, speak to local residents and agents to provide you with an indication of the area’s advantages. This will allow you to gauge how rental returns could perform in the future.
Researching multiple investment properties in different areas will provide a better understanding of the market and increase your chances of finding the most suitable property for your financial goals. A commonly used principle is the ‘100/10/3/1 Rule’ that suggests, by looking at one hundred properties and making ten offers, three offers may be accepted, resulting in a final outcome of one property purchase. While seeing multiple properties is a time-consuming process, it will ultimately be worth it when you find the perfect investment.
At the offer stage, staying objective is key if you want to avoid overpaying for a property. It is useful to liken buying your first investment property as a financial deal, taking the emotion out of the decision to avoid making poor decisions. By approaching the purchase of your first investment property with a level head you will be one step closer to expanding your property portfolio for financial success.
Establishing a property portfolio is no easy feat, with many hours spent searching, talking to agents and dealing with financing and taxes. Our Marshall White Property Management Team is on hand to provide clients with assistance around the complexities associated with purchasing property, streamlining the process in line with your goals. For more information contact us on (03) 9822 8711.
Marshall White Finance Pty Ltd is a corporate credit representative 501291 of BLSSA Pty Ltd A.C.N 117 651 760 (Australian Credit Licence 391237).