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WEEKLY PROPERTY UPDATE – #010

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The Beginners Guide
To Property Investment In Australia

Investing in property can be daunting and complicated.

Can I afford an investment property - www.pumpedonproperty

Ben Everingham – Pumped On Property

1. Learn how to make money through property

Successful investors have learnt that you make money in the property industry through one of three ways:

  • You grow the value of your property – this is called a capital gain
  • You receive passive income from your property
  • You receive tax benefits – depreciation, etc

2. Set some financial goals

Before you go out and start looking at investing in property, sit down and set some financial goals. Right down the answer to the questions below to get you started.

Reality (where are you right now?) Roadblocks (what’s stoping you from achieving your goals?) Vision for yourself (where will you be 3 years from now?)

Be honest with yourself and get clear on exactly what you want.

3. Choose an investment strategy that’s right for you before you begin

A great way to identify which strategy will work for you is to work down the table below and circle the most appropriate option, in either the left or right hand columns. Once you’ve worked through the table, write all of your answers on a blank piece of paper and you will begin to see the foundations for your property investment strategy.

High risk  –        –        –       –        –        –        –        –       – Low risk
Short term gains  –        –        –       –        –        –        –        –       – Long term wealth
Older property  –        –        –       –        –        –        –        –       – Newer property
Units  –        –        –       –        –        –        –        –       – Houses
Regional properties  –        –        –       –        –        –        –        –       – Metro properties
Buy and hold  –        –        –       –        –        –        –        –       – Flip
Cash flow  –        –        –       –        –        –        –        –       – Capital gains
Multiple markets  –        –        –       –        –        –        –        –       – Single market
Multiple states  –        –        –       –        –        –        –        –       – Single state
Single income property –        –        –       –        –        –        –        –       – Dual income property
Go it alone –        –        –       –        –        –        –        –       – Build a team of trusted advisors
Small deposit  –        –        –       –        –        –        –        –       – Large deposit
Interest only –        –        –       –        –        –        –        –       – Principle and interest
Fixed loan  –        –        –       –        –        –        –        –       – Variable loan
Bank manager  –        –        –       –        –        –        –        –       – Mortgage broker
Low depreciation benefits –        –        –       –        –        –        –        –       – High depreciation benefits
Under market value  –        –        –       –        –        –        –        –       – Market value
On market listings  –        –        –       –        –        –        –        –       – Off market listings
Light research –        –        –       –        –        –        –        –       – Extensive research
Renovated  –        –        –       –        –        –        –        –       – Un-renovated
Low maintenance –        –        –       –        –        –        –        –       – High maintenance
Low holding costs –        –        –       –        –        –        –        –       – High holding costs

Your investment strategy should always be tied back to your financial goals.

4. Decide on your investment strategy and stick to it

Once you’ve identified which investment strategy is right for you make the decision to see it through.

Keep implementing your strategy until:

  • You’ve achieved your goal
  • It’s not working anymore
  • You’ve found something that works better

It is all about finding a winning formula that works for you.  The sooner you can find (and decide on) that winning strategy the better.

5. Go and see a mortgage broker

See a mortgage broker before you start looking at property.

A mortgage broker will give you an idea of how much you can actually borrow and how much of a deposit you will need.  Also don’t forget stamp duty, solicitors fees, bank fees, insurances, etc on settlement.

A great mortgage broker will help you create a plan for getting into the market sooner and support you on your journey.

6. Learn how to analyse a suburb

The quality of your research will be dependent on the quality of the questions you ask, so make sure to ask the following:

  • What’s the demand to supply ratio in the area?
  • Is the population growing?
  • What type of rental yield can you expect?
  • What are the historical growth rates in the area?
  • Is the state or local government investing the area?
  • Is there any gentrification occurring in the area?
  • Are there any neighbouring suburbs which are more expensive?

Select a suburb with growth potential that aligns to your financial goals.

7. Identify an area and focus your attention

The biggest issue first time investors face is analysis paralysis.

Become an expert in one area.

8. Get pre-approval

Before you go and make an offer on a property go and get pre-approval from your mortgage broker.

Pre-approval gives you confidence knowing that your ready to buy the right property when it comes onto the market.

9. Make an offer

Everything is in place and now it’s time to make an offer.  Don’t get too caught up if you miss out on a few deals when you’re starting out, this is completely natural.

HAPPY PURCHASING AND BUYING!!

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FAVOURITE PICS OF THE WEEK

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Credit: @homeadore

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Credit: @casavoguebrasil

photo 1

Credit: @revistaformas

photo 10

Credit: @secretlandscapes

photo 9

Credit: @iainclaridge.co.uk

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Credit: helendushko.tumblr.com

photo 7

Credit: @adesignermind

photo 6

Credit: @inandoutdecor

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HAPPY WEEKEND EVERYONE!

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Posted by

I am a mother of 2 living in the Eastern Suburbs of Sydney. My two passions are Interior Design and Real Estate. I have been fortunate to have had the opportunity to work in both industries. I started off working in Interior Design assisting Interior Designer Darren Palmer which was amazing and a great experience. What I loved most was working with such a creative sole as Darren and having the opportunity to source and work with gorgeous products. From there I continued with my other passion in Real Estate. I am now a licenced Real Estate Agent with Raine and Horne Double Bay/Bondi Beach working within the Goldman team (Mark and Barry Goldman). As the saying goes:- "It's a beautiful thing when a career and a passion come together" So very true for me and I feel very fortunate to be doing something that I love everyday around my kids and that's also rewarding.

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