So, you’re planning to start investing in property! It’s an exciting step towards long-term financial freedom.
But the challenge for most first-time investors is knowing just how to invest in property in Australia. And importantly, how to ensure you’re laying the right foundations to build a successful property portfolio.
Below, our property experts share the three key steps you need to know before buying your first investment property.
Start by establishing your strategy
Property investment isn’t a one-size-fits-all approach. There are various factors you will need to consider before you even think about getting into the property market. These include your unique goals, your appetite for risk and your current and anticipated financial circumstances.
These factors will determine the various aspects of your acquisition strategy, including the type of property you invest in, the location in which you invest, and the attributes of your target property. And this is going to be different for every investor.
Whether you’re a first-time investor or you’re an experienced investor seeking to grow your portfolio, having a tailored strategy will be essential to your success.
So, before you begin building a property portfolio, it’s important to take the time to determine which property strategy is right for you and your unique goals.
Establishing a plan will not only give you guidance in your investment decisions – it will also help you recognise properties that aren’t right for you, so you don’t make a purchase that could hold back the long-term growth of your portfolio.
Set up the right loan structure
Once you’ve established a plan and you’re ready to get started in property investment, structuring your finances correctly should be your next critical consideration.
The way you structure your property loans can have big implications on your ability to progress with further purchases and access your property’s equity in the future. And this is something that will become more complex as you add to your portfolio.
It’s important to note that not all lenders have a strong understanding of property investment. Banks especially will often structure property loans in a way that mitigates their risk, not yours as the borrower.
In setting out to build your property portfolio, make sure you speak to a property-savvy broker. A good mortgage broker can advise you on the structures that best support your needs, while also minimising your investment risk and allowing the flexibility for portfolio growth.
Proactively manage your property from the outset
Don’t forget that purchasing your investment property is only the first part of the equation.
Once you’ve secured the property, your asset now needs to perform to its full potential, both from a capital and rental perspective.
This calls for the guidance of a good property manager – one who will proactively advise you on strategies to maximise the performance of your property.
This might include recommending cost-effective improvements to enhance market rent, implementing special clauses and procedures to protect your rental cashflow, or working with your mortgage broker to help you maintain a healthy cashflow position (it should be all three!).
Check out our list of key questions you should ask when choosing a property manager.
Get started with your property strategy
So, there are three of our most essential tips on how to invest in property in Australia.
If you’re looking to start your investment property portfolio and would like some further guidance, our experienced property consultants can work with you in tailoring a strategy for your unique situation and goals.
Ready to get started? Fill out the contact form below to request an obligation-free chat with our property strategists.
Free Strategy Consultation