Top 10 Tips To Buy Your First Investment Property
Buying and investment in property is really on the rife in Australia. Investors should invest in it because it has the ability to secure their financial future and has the ability to increase their wealth substantially. If you are also planning to invest in a property, you should keep the following tips in mind;
1. Know the Nuts and Bolts of Property
Before you take the plunge to invest in buying a property, it is essential for you to understand the market properly and consider all the properties which are available. For this purpose, you need to check out your local area and ask for advice from investment properties agencies about all the properties. On getting valuable information from them, you can then decide which real estate property to buy.
2. Do Not Opt for Higher Interest Rates
The cost of the investment property may be cheap but the interest rate may be higher. Higher interest rates can really put you into a loss as you will have to pay heavy amounts as interest. Therefore, you should look for a mortgage payment method that is low enough and to not eat into the profit.
3. Consider Paying Down Debts
Savvy investors never keep their student loans, medical bills, utility bills or other bills due when buying an investment property. Instead, they consider paying them first before making the move of buying the property.
4. Opt for the Right Location
The next thing that all investors should keep in mind is to look for the right property location. Ideally, investment properties should be located at a place where low taxes are levied, there is a low crime rate, a booming job market and where the basic facilities are nearby. Also, investors encourage having general stores, malls, parks and some other attractions in the area.
5. Manage Your Cash Flows
If you are a beginner investor, you can fall into the trap of poor cash flow management. However, savvy investors keep all the types of costs involved in acquiring a property in mind. If you do not know about the costs involved, you should always seek advice from real estate agents to manage your resources efficiently.
6. See Your Affordability
Investing in a property requires affordability handsome amount of money. Smart investors always ensure whether the property in question is affordable for them or not. They make calculations beforehand and see if that will be enough for them to afford the property.
7. Contingencies for Shortfall
There are chances that you can fall short of money if you are a newbie in the investor business. In such a case, investors should always prepare contingency plans for when things go south. It is good to at least keep 10% of the amount aside in this regard.
8. Hire a Property Manager
A licensed real estate agent is a professional and experienced person in the relevant field and they ensure to keep the things right for you. To get the best possible quote of the property, you should hire a property manager. Once you get some confidence, you can opt for a do it yourself solution, but as a start it is best to stick with the professionals.
9. Don’t Get Your Hands Dirty
Fixtures and repairs in the property you are investing in is not your job. You should not get your hands dirty with things like unclogging the toilet, repairing the burst pipelines or getting the walls repainted. Look for the age of the property and other amenities that are ready and leave you with profits.
10. Pick the Right Mortgage
You have a lot of options regarding the properties you can invest in. So, you should get a sound advice from your local real estate agent about the mortgage type and enjoy a passive income stream down the road.
Now that you know the tips, we hope you will be able to make an informed decision regarding your first investment in a property. Good luck!