Published on April 6th, 2015 |
by Chris Snell - Rental Success
Buy home. Buy Property – rental property investment
Many people set out on the journey of wanting to buy property for rental property investment and for personal occupancy. If you want to buy property for rental property investment you can. If you are looking to buy a home to occupy you probably can do that too. Whilst the money is a big part of the process to buy property, it is not the only part. Even if you only have a little bit of money set aside you probably can buy property – you definitely do not to be filthy rich to become a savvy property investor or home owner.
So what is important about becoming a property investor who might one day own a portfolio of property investments? Here are a few important tips to start you thinking about your journey to becoming a property investor.
1. Establish a plan to buy property. There is no greater risk than that of buying property off the cuff without any planning, goals or research. Setting aside some time to create your own personalized property investor blueprint is worth its weight in returns in the long term.
2. Review your financials.
You need to know exactly the condition your personal finances. Review your existing financial commitments. Document your income both gross and net (take home pay). It is important to understand the differences. Understand your current spending habits for your daily costs of living. Scrutinize your social expenses too. Review your current savings in the bank and any saving plans you might have in place now.
3. Seek advice from a financial planner. A good financial planner will help you to review all of your financials. The process of putting all your financials on the table for an outsider to review can be challenging but also very rewarding. You will be surprised how many new insights you can gain from a professional about your present situation. Some people advocate an accountant which is well and good however I believe that a financial planner will help you to create a big picture tapestry of your circumstances and set you up with a plan to help you buy property in the future.
4. Understand your superannuation. Have you ever considered establishing a self managed superannuation fund? Believe it or not, you might be sitting on a wealth of opportunity and resources by tapping into your superannuation funds to assist you with your plans to buy property. Just a note, if you buy property using your superannuation you will be unable to occupy such a purchase – the property can only be an investment property in most circumstances.
5. Research the areas that you are interested in or want to buy property. Don’t limit yourself to buy property in areas you simply like but adopt a property investor mindset and research information from leading commentators and property professionals. Exclude slippery salespeople and “get rich overnight” investment companies from your research. Visit local councils and speak to town planners about future infrastructure to be constructed.
6. Follow the market. There is so much free information in the public realm nowadays – don’t be afraid to use it. Inspect some homes for sale, attend public auctions, speak to some active salespeople , follow some leading property websites. Know the current value of home prices in the for sale homes pages of your local and state newspapers. You can develop a good understanding about an area in a reasonably short period of time. The internet does make research so much easier nowadays.
7. Research the cost of buying property as a property investor. Every state has variations in the cost of stamp duties and title registrations when you buy property. Every bank has a suite of fees, valuation fees, settlement fees and bank account fees associated on your loans when you buy property.
These suggestions can all be broken down into much smaller items and extensively expanded upon. The list is presented as an appetizer to the discussion you should be entering into in your pursuit of becoming a property investor. The real secret behind any property investor who sets out to buy property or establish a portfolio of investments properties is their commitment to the development of a plan that is researched, prepared, calculated and implemented.
Good luck with your mission to buy property – wishing you rental success.