Where do we start
START BUILDING YOUR INVESTMENT PROPERTY PORTFOLIO TODAY
You Don’t Have To Be Rich to Invest In Real Estate
Most people we speak to would like to buy an Investment Property but do not want the stress or the pressure that goes with it. Leave that to us, we will help you have the confidence that you need to go out and buy a great property and if required take you step by step through the whole process, you choose. We will also be there for you if you have any questions or need help in the future!
How to Buy an Investment Property
When buying anything as an investment you must be certain that you can afford to buy and hold the investment over the long term as there are costs and risks involved.
Cash flow is also important so ensure you are ready to take on the extra expense if the need arises.
Where to Buy an Investment Property
One of the biggest problems Investors face when looking at buying an investment property is “Where do I buy?”
We always suggest you look at historical data and consider the pattern of capital growth over the last 5-10 years to establish whether or not the locations you are looking at are worth consideration.
We must remember that one of the most important goals of investing in a property is to realise strong capital growth.
Are you ready?
You also need to be ready to take the first step and for a lot of people I have met in the past they have been far from ready. Some just wake up one weekend and decide today is the day and off they go looking for a needle in a hay stack. It’s easy to just do it, however there will be a lot less stress and possible pain if you have a plan and do your home work first.
This way you will reduce the risk of any unnecessary mistakes which include having your finance declined, buying in an area that has poor growth and maybe even poor rent returns as well as not thoroughly checking out the property for any major defects.
Selecting a property
Total Investment Property Solutions was established to help many investors that may lack the time, motivation or experience to find and negotiate a suitable investment property. The most common mistakes we see investors make include:
- Poor or Inadequate research – most people just don’t know where to look or questions to ask to buy the right property.
- Poor negotiation skills – some people just pay too much and in many cases over market price. You need to be ruthless WHEN BUYING AN INVESTMENT PROPERTY and if it’s not at the right price walk away because the next opportunity won’t be far away.
- The frustrated purchaser who ends up buying because they’re sick of looking and make a rush decision – patience is the key.
- Not understanding property cycles as there are clear signs when you should get in or stay away and you need to know them. Sure eventually you will make money however we prefer to get to this stage sooner than later.
- Buying for tax deductions, instead of capital gain – you need to talk to your financial adviser in conjunction with your accountant to get the right advice so you are clearly focused on the desired result you are trying to achieve
- Poor investment analysis
- Procrastination – many people have a fear of moving forward, and this results in missed opportunities.
So when the right property comes along you need to grab it
Good buys aren’t necessarily close to home.
You need to balance what you can afford to buy with the rent you’ll be able to charge. There’s no point buying a waterfront property if you can’t find tenants happy to pay the sort of rent you’ll need to make the exercise worthwhile.
Once you’ve found the right property, the actual mechanics of buying it will be the same as if you were buying a home to live in. Total Investment Property Solutions can take care of the whole process if you choose, including how much to borrower, where to borrow, and what types of loans are available.
Dealing with a developer
We also look out for Developers who are looking to sell properties off the plan as in most cases they will allow you to get the property slightly cheaper as they won’t have to seek the services of a real estate agent who they will have to pay a fee to for the sale of the property. The result is you SAVE money and everyone wins.
Managing your property
It takes time, effort and money to look after a property.
Setting a tenancy term
Most tenancy terms are six or twelve months but be careful if you have a unique property as you may want to vary this. For example if the property has a swimming pool try and have the term expire in the summer or better still the start of summer as it will be far harder to sell the benefits in winter. Everyone loves to move into a home in the hot whether and jump into a pool and this will add value when they are viewing the property for the first time. It may also change the mind of the out going tenants.
How good is the investment?
Know what you are buying. What rental will it attract and how will the value of the property rise over the short term and long term. Remember a good investment has a good exit strategy if required so we will look at your break even time considering the investment you have made to get into the property as well as the cost to sell if need be. We’ll also calculate any costs that will need to be spent on the property before it is able to be rented. Some of the investors we have dealt with in the past have spent substantial amounts on the property to renovate it before offering it to the market, so this also may need to be considered. By renovating the property, we need to make sure you’re not over-investing your time and money.
High demand for rental properties
There is currently a housing crisis in Australia with a reported 200,000 more houses needed and that number is increasing each year with our growing population.
Australia’s population is currently growing at around 400,000 per year and this demand equates to a further 133,000 homes a year, assuming 3 people per household.
As a result of this continuous demand, property prices and rentals will rise steadily. Along with strong demand from renters, the only real risk for new property investors is in trying to go it alone, and making costly mistakes simply through a lack of research or knowledge.