If you are a first time investor, or if you’ve been out of the game for a while, property investment can be like driving through a foreign city without GPS navigation. If you haven’t done some planning before you leave you could find yourself going in the wrong direction.
In a similar way, property investing, when done without some form of strategy, could be highly costly. So how do you avoid the potholes? Here are our top five tips to get you on the road to investing.
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- Be budget savvy
Until you have a firm grasp on your personal finances then don’t even bother checking out what’s on the market. Speak to an accountant or financial planner to help you with your finances, otherwise use an online budget planner or even create your own in excel. Once you truly understand how you spend your money you’ll be better placed to make the right investment choices. Check out this range of planners from experts including ASIC Money Smart.
- Be prepared to wait
Investing in property is not a get-rich-quick solution. It’s a long-term investment that needs patience and a forward thinking view. The property market is quite often cyclical in nature, so it’s important to understand that the capital growth on your property may also follow this pattern. However, if you are prepared to give the market time you are more likely to be successful.
- Be mindful of your purpose
How do you want your investment to work for you? Are you after growth or yield or both? The answers to these questions are highly personal and will hinge on many factors including your age, income and your current life status (or where you see yourself in the future). Regardless of your situation, understanding how the property can work best for you is an important consideration.
- Be a planner
Property investment is not the time to be ad-hoc, save that for another part of your life. A long-term investment requires some form of forward planning to map out your journey. Like any good business plan you should have objectives, a budget, a timeline and some clear goals. Most importantly your plan needs to be a living document and should evolve as your journey unfolds.
- Be smart, get some professional advice
There is little in life that you do without some expert direction. So take some time to build your knowledge. Read the property pages, watch the news, talk to an advisor, read a blog – arm yourself with as much expert advice as you can. Just make sure that your sources are credible and unbiased.