5 Important Steps to Buying Your 1st Investment Property

Here we outline five important steps to buying your first investment property:

1. Set Your Goals

To accomplish your property needs, you need to establish some primary objectives.  Are you purchasing a property to generate a high rental income stream or capital growth? Is it to be held for the short or long term? Break down your objectives into a few important criterions and place a deadline and/or date when you want to achieve these goals. You may not meet every goal you set out, so outline a few very important goals that you will not alter and ones that may be changed if other goals are well aligned.

2. Establish a Finance Approval

Before searching a property, determine your borrowing capacity. Ensure you are looking at properties that are within your budget and work within those parameters. By seeking a pre-approval for a loan, you will have a clear understanding of just how much you can afford. A mortgage/finance broker would be my suggestion. They can ascertain your circumstances and review a variety of options rather than just one bank or loan product.

3. Set up a Cash Flow (Budget)

You have a pre-approval or an indication of your borrowing capacity, but identify what the likely loan repayments will be. The rental income may offset a substantial amount, but what if you lose the tenant. You’ll still be responsible for paying the debt. Check that you can cover the full loan repayment before proceeding. Other factors that you need to take into account are the estimated outgoing expenses of the property. Can you afford these with your personal budget? Some of these expenses may be tax deductible, but you still need to afford paying them first.

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4. Research the Property Market

Take some time to review the property market. Many investors don’t acknowledge anything outside of a 4-5kms radius of their family home. Diversification is important, but researching property can be difficult and time consuming. I suggest you seek property advice from a licensed estate agent who is qualified and knowledgeable. A buyer property advocate (like myself) is an excellent way of ensuring your investment decisions are fundamentally formulated rather than emotionally invested.

5. Invest Intelligently

Buying your first investment property can be overwhelming and quite nerving. No one wants to lose money. Use your ‘head’ not your ‘heart’. Get professional advice and your investment experience will become a fun-loving moment that will improve your financial situation immensely.

Would you like some help?

If you’d like to learn more about buying an investment property, please don’t hesitate to contact us. We would welcome the opportunity to help with your property purchase. Our YouTube channel and Market Insights also provide a wealth of information to assist you with many areas relating to property investments.

www.crestproperty.net.au

While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.

Sep 2017

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