Looking for the best piece of property advice? In these uncertain economic times, we are all looking to improve our cash flow as much as possible. Mike Greeff, CEO of Greeff Christie’s International Real Estate says that property remains a safe and reliable investment and has the potential to yield positive, long-term results.
Before jumping into the guidelines, it’s important to look at what to avoid when wanting to invest in property.
Common mistakes to avoid when investing for the first time:
- Jumping right in, before doing thorough due diligence
- Making decisions based on emotions not facts
- Borrowing money to their limit and not considering future changes in the lending market.
- Choosing the wrong location or property
- Relying solely on rental income to pay expenses.
Investing in bricks and mortar can be a great way to create wealth and diversify your portfolio, but there are some key rules, and the best property advice, to consider before taking the plunge into property investment.
1. Know your budget
Before investing in property, it’s vital to do a thorough audit of your cash flow. Request a pre-approval from a bond originator, like BetterBond, so you know how much you’re able to borrow from the bank before you start hunting for properties.
2. Don’t underestimate ongoing costs
Make sure you budget enough for rates, insurance, and general repairs on a monthly basis. Once you have purchased your ideal investment property, do what you can to prevent costly maintenance issues arising, such as replacing an ageing tap.
3. Location is key
Try to choose an investment property in an area where there is a strong demand for rental accommodation. For example, you could buy in a student-populated area close to a university as there will always be a demand for your property. Buying a property close to transport, universities and schools will make it more attractive.
4. Look for livable, not luxury
Remember a rental property only has to be clean and functional. Do not get sucked into buying a property simply because it has a stylish interior. While a home on a steep road may have a stunning view, it also has the potential to be a nightmare to renovate due to excavation costs and council regulations.
5. Still paying off your own home?
This is one of the best pieces of property advice. It isn’t necessary to have your own home fully paid off before buying an investment property, however, it is important to be comfortable with your current debt. Ideally, you’d want to have a large portion of your own home paid off before embarking on the investment journey.
Buying an investment property requires a completely different mindset to that of purchasing your own home. Buying a home is largely an emotional purchase whereas an investment property is bought because of its value and the income it will generate. When beginning your hunt for the perfect investment property, ensure that you have a trusted agent at your side who can guide you through the process. Make sure that you are going in with the correct mindset and that you always have the end-goal in mind which is capital appreciation. For the best property advice, stick to these guidelines.
See the full article by REImag here.