Smart property investment decisions can be a great way to achieve financial freedom and set yourself up for a comfortable retirement. However, making the wrong move can lead to a financial mess, so here’s our top tips for setting you on the right path.
- Set clear financial goals
Set some tangible goals around areas like return on investment, cash flow and time frame, then you have a framework to assess each potential investment. Just because someone says it’s a good investment, doesn’t mean it’s necessarily right for you with achieving your personal financial goals.
- Treat it as a business
Owning an investment property is much like owning your own business, with you at the helm. Good structure and management is essential to keep everything on track, so if this isn’t in your skill-set it might be worth hiring someone who can manage this aspect for you.
- Seek support
Before embarking on your property investment journey, get yourself up to speed with all things property as much as possible. Seek advice from trusted family and friends as well as independent advisors like accountants and financial planners if necessary.
- Research the market
In your knowledge quest, also focus on researching the market, particularly those areas you intend to invest in. You should register and talk with local selling agents, go online and visit property websites which often provide valuable and free suburb and property information like our blogs.
- Don’t rush into anything
Take your time and consider your options before making any decisions. They’ll always be another property which comes along, so don’t feel pressured to make any hasty moves.
- Capital growth is fundamental
A sensible approach for your first investment would be to look for locations where property values have shown solid and consistent growth over the long term. Start your search with properties within 20 – 30 kilometres from Perth and properties with unique aspects like ocean or city views.
- Inspection is a must
You don’t want to be stuck with a property lemon, so it’s essential to inspect every property thoroughly before thinking of putting pen to paper. Rope in some family or friends to join your inspection to give an unbiased opinion, then bring in the experts if you’re getting serious.
- Cash is king
It’s extremely important that you don’t over commit financially and that you can afford to own, manage and maintain your investment property. Prepare a budget to get a grasp on your current situation, as well as allow for contingency or changes down the track.
- Beware of rental guarantees
If it sounds too good to be true, then it probably is! It sounds good in theory, but in reality, often have a dubious value. In addition, they can often be hard to sell later on, so you’re probably better off finding another property that makes financial sense without the guarantee.
- Don’t do it all yourself
As a first time investor it makes sense to get all the advice and help you can get. If you need to pay an expert, simply look at the cost as mitigating your risks and adding to your education.
Contact Naked Real Estate to get on the right path for property investment.