Property investment is a lengthy and involved process. To ensure you have considered all that is required before making the big purchase, we’ve outlined the steps you need to take.
A property investment must be a long term commitment in order for it to be worthwhile, so the very first step is to evaluate your budget, constraints and future obligations.
“Consider your future as far ahead as you can,” says an MFAA broker. “You need to ensure that your ability, commitment and financial capability can withstand a minimum of five to ten years, as that’s what generally brings premium results.”
Seek Professional advice
The next step is to seek professional advice. It is your opportunity to ask as many questions needed to alleviate any uncertainty you may have.
“Whether you’re chasing a great rental return, maximum capital growth or tax effectiveness, speaking to a broker will help you make the correct property investment choice,” says the broker.
Having an accountant, financial planner, solicitor and property manager on your team will also assist in ensuring that you’ve made the right choice.
Talking to friends, family and acquaintances who have, or are currently considering investing, provides a fantastic world of advice, advises the finance broker.
“Anecdotal truths is least impacted by gain, so you can learn a lot from their advice and also from their mistakes.”
As well as proof of your current income, employment, debts and loans, gather any paperwork that helps support your character in the application. For example, if you have been a long-term tenant, get a 12 month tenancy legibility that proves your ability to make regular repayments. Before applying for a loan, minimise your current debt load, and if possible reduce the limit on any credit cards you have, as this is perceived by lenders as potential for debt.
It is also advisable to have a fully assessed pre-approval before you start your search, as this will allow you to make an offer once you’ve found a property you like.
Key things to consider
Rowlands recommends choosing a property based on whether or not you feel like you could live in it. “It’s not an emotional decision, it’s still a business decision. But you also have to adopt the mindset that you could be selling to an owner/occupier down the track, which could be an emotional purchase.”
If however you plan to rent the property, your decision should be based on what would appeal to the type of individual who wants to reside in the area.
PROSPERA FINANCE — Geoff Norman
MOBILE LENDER PROVIDING MORTGAGE BROKERING SERVICES TO NORTH SYDNEY | CROWS NEST | ST LEONARDS | GLADESVILLE — FINANCING HOME LOANS — FIRST HOME BUYER LOANS — CAR LOANS — LOW DOCUMENTATION LOANS — EQUIPMENT LEASE