Property

8 Steps to Getting Started in Property Investment

Admit it, you’ve been thinking about investing in property.

A lot of people get overwhelmed by the process and quit before they even begin. But it doesn’t have to confound. Reality is, property investing is relatively straightforward.

To help you begin your journey, here are eight steps to starting a property portfolio on a solid ground, without losing your mind.

1. Check your finances

This can be as simple as listing all your assets, including incomes and work out your expenses.

This will give you an idea how much cash you have available to invest. Don’t immediately assume that you can’t afford to invest. As long as you have a stable and reasonably good paying job with solid employment history, you shouldn’t have a problem getting a loan.



2. Get a pre-approval

You can get pre-approval through your lender directly or through your trusted mortgage broker. Going through a broker before applying for a pre-approval can be beneficial if you’re not sure you’re financially ready to invest.

3. Set your goals

In order for you to achieve your goals, you must first articulate what your goals are. More importantly, you need to set a deadline as to when you want to achieve these. Then you can work backwards.

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4. Understand your attitude to risk

Your risk profile will dictate your strategy. What sort of risk can you tolerate?
Getting an understanding of your own attitude to risk will help you create a strategy that reflects this.

5. Start budgeting

Budgeting is the only way to ensure you’re able to balance your income and expenses. It allows you to see where you’ve been spending your money and helps you to plan for bigger expenses down the line.

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6. Create a purchase plan

An ideal purchase plan should facilitate your goals of growing your portfolio to a point where it’s producing the growth or income you’re aiming for. It should serve as a structure for you to stay in the game.

Here’s an example of a purchase plan you can follow:

- Define your strategy
- Set up your criteria
- Do your research
- Cull your list
- Get appraisal
- Do your due diligence
- Make and offer and negotiate

7. Be informed

Use the tools available to you to make an informed decision. Knowing the market can be key to making the right investment choice.

Being informed also means being wary of get rick quick schemes and property peddlers. If someone is promising you guaranteed returns and overnight riches, walk away; the only person getting rich is them.

There’s no such thing as a property psychic and while there are tried and true methods to research, no one can make guarantees. Understanding your tolerance for risk will help you shape how much you’re willing to take on over the shorter and longer term.

8. Stay focused

Investing in property is a business decision, not an emotional reaction.

Get clear about what you want to achieve
Set a date as to when you want to achieve this goal
Identify milestones you need to do to get to your goals

It’s easy to get overwhelmed when you’re starting something new and as massive as property investing. But don’t give up. Just imagine in 10 years, if you buy the right properties this year, you could be sitting back, feeling happy, and secure that your properties have more than doubled their values while your peers and everyone else wishes they’d bought back in the day.

Source: Realestate.com.au
Author: Nila Sweeney