Despite the ups and downs of a volatile global economy in recent years, purchasing property remains a sound form of investment in many areas. Whether you’re looking for property solely with its investment value in mind or are also searching for a long-term home, the process of purchasing real estate can be nerve-wracking at times for beginners. By preparing yourself for this process, you can ease yourself through it and make a worthy investment.
There are numerous resources available online to help first-time buyers, including real estate investment courses, E-books, and brochures. If you’ve never made a purchase of this magnitude before, it can also be a good idea to take a basic personal finance course. By learning more about what to expect with this type of investment, you can work with brokers and sellers more efficiently and know where to look to narrow your focus on the right property.
Location is Everything
One of the most stable property markets in the world at the moment is in Australia, making it a prime place to invest in real estate. Yet even within this country, there will be some areas that are more financially sound than others. Home prices have more than doubled in large cities like Brisbane, Melbourne, and Canberra in the last ten years, according to the Australian Capital City Indexes. However, these can be costly for first-time buyers, whose salaries may not have kept up with the real estate boom. In addition to property investments in Melbourne or Sydney, it’s worth looking at alternative hotspots like Hunter Valley, Tasmania, or Port Lincoln, which offer a strong tourist infrastructure and agriculture-based economies.
Getting Finances in Order
As you research the best location for your investment, it’s also important to be sure that should you see the right opportunity, you will be ready to seize it. This includes getting your credit in best shape. You can request a free copy of your credit report to ensure that there are no errors or surprises. Those with imperfect credit will need to start preparing at least a year in advance, as lenders will need to see a steady track record of on-time payments before they will consider approval.
Create a Nest Egg
Although investing in Australian property is statistically safer than many other types of investment opportunities, it’s still best to prepare for financial upheaval. Experts recommend setting aside at least six months’ worth of mortgage payments before closing on any deal, so that you will have a safety net to avoid foreclosure. This may come in handy should your circumstances change in the future. An added bonus is that this money will not only make you look better in the eyes of the lender, but it can also be used for home repairs or maintenance down the line.
Find an Estate Agent with the Right Experience
There are many estate agents who can help you purchase a home, but if you’re shopping around for investment purposes it makes sense to choose an agent who owns property. A professional who has first-hand experience with property investment in the area you are interested in can help guide you through the local market with ease. They can also help give referrals for other professionals, such as insurance agents, mortgage brokers, and home inspectors.
When to Hire Help
Should you purchase a property with multiple rental units, it’s time to think about hiring a property manager. Although this will require further investment on your part, it’s well worth it because the manager will deal with maintenance issues, help find tenants, and deal with any daily issues that come up. It’s recommended to set aside 10% of the rental income that you make for this purpose, depending on the scale of your property. To protect your investment don’t forget to get cheap landlord insurance as well.
By following these tips and taking some time to plan your investment strategy, you will stand a better chance of completing all transactions with ease.