Have a clear budget
Before investing in property, it is essential to have a detailed understanding of your finances. Getting a loan pre-approved is a crucial first step to building your investment property portfolio, as you know exactly how many funds you are able to receive. Making sure you have a contingency plan in place in case of financial difficulties will make sure your investment journey isn’t cut short.
Buy sought after property
Seek out properties that are in demand! Property in growth areas make for ideal investments, as the demand for accommodation in these suburbs will continue to grow therefore increasing your investment value. Key indicators of investment hotspots include:
- Easily accessible transport
- Close to schools or universities
- Proximity to the city
- Located in a desired suburb
Appeal to your audience
You want people to want to live in your property. Identifying what your ideal tenant wants will better inform your decision to buy certain properties – consider how many bedrooms or bathrooms are offered, if the property has car parking and if the market price reflects the area and the building itself. If you can appeal to your market’s needs, the better your investment will be.
Before purchasing your property, you need to know the ins and outs of every aspect of your building. You don’t want any unwanted surprises for you or your future tenants – pre-purchase inspections will save you a lot of pain and money down the road. Essential checks include:
- Ensuring the building is structurally sound
- Making sure there is no faulty wiring or a lack of smoke alarms installed in the building
- Checking for hazardous materials such as asbestos
- Examining sundry structures (sheds, patios, etc.) to make sure they conform to regulations
Set realistic investment goals
It can be easy to get swept up in the prospect of immediately making money from your property, but investing in property isn’t a get rich quick scheme. Researching the current housing and economic market can help to estimate the nature of your returns from your investment. Be prepared to be patient – good things come to those who wait!
Don’t get too invested
Buying a house traditionally is a very personal and emotional experience. It’s where you picture beginning your new life, where you may raise children or grow old with the love of your life. However, buying an investment property requires a level of detachment – thinking with your head and not your heart. It’s easy to get attached to certain properties, but it is crucial to invest in something that will appeal to your ideal tenants and make you the most profit. Coming from a financial perspective is essential when finding a property that best suits your investment goals.