Property is without a doubt the most desired asset class to invest in. Keen investors across all generations are attracted to the opportunity property represents and the safety of knowing their investment is a tangible asset.
When it comes to securing a family home, there is a wealth of knowledge and support to direct first home buyers, and seemingly nothing as substantial for those looking for an investment property.
If you are hoping to expand your portfolio to include investment property, here is how you can get started:
See a Financial Advisor
There is a misguided perception that we should only seek the counsel of a financial advisor when we are wealthy and older. This couldn’t be further from the truth, and even more so when you are looking to invest in property. A financial advisor will be able to assess your options in pursuing a knock down rebuild in Sydney, an established home, house or apartment, or an off the plan option.
Your advisor will also be able to articulate how this investment could impact your financial standing and will explore and define what your ultimate goals are in this venture. Property is (or at least should be) a long term strategy, so if you are hoping to access a return in the next five to ten years, flag this with your financial advisor so you can discuss if this is possible.
Consider the Location of Your Investment
You might think that your property investment should be located in the city you live in, but is that conducive to the market and your overall investment goals? The truth is, some property markets pose small to little return due to being either oversupplied with property or available at a high price range to entry. Given that your investment property is to be something that brings you a passive income, is there really a benefit to having your investment property in the same city or state as you? If you are open to getting started as a property investor with a purchase in another state, make sure you are familiar with the legislation and laws as you will find it varies from state to state.
The last thing you want to be is an unprotected landlord.
Find the Right Home Loan and the Right Mortgage Broker
When it comes to finding a financial adviser, GP or psychologist, we choose one based on whether there is a connection and genuine trust. For some reason, individuals will choose any mortgage broker they find, despite the huge number of operating brokers and the variation between them. Despite what your bank will say, you should be seeking an independent mortgage broker as they will offer a number of different options across a wide selection of lenders.
If you walk into a bank and sit down with their brokers, they will show you three options and all will be tied to that very bank. This is a problem because the advice given is biased, rather than an independent broker who assesses your individual circumstances and recommends options that may not be in the big four. Also, it’s never too early to talk to a mortgage broker, even if you are not ready to pull the trigger yet, as they can discuss your plan and steer you in a direction to enhance your position when you are ready.
There is a lot to consider and a lot to prepare before you secure your investment property. If it was easy to do, everyone would have one. Before you make any decisions, talk to the experts and ensure you have a 360-degree understanding of every process and every situation that may or may not arise.