First Time Investors
Making the decision to become involved in purchasing property is a wise and rewarding investment. History shows that property values continue to increase in value and this trend is sure to continue into the unforeseeable future. This, along with the rapid growth in population, is creating a demand for more rental properties to accommodate the expanding population. Property investment is one of the most significant financial commitments that can be made. There is a multitude of choices and options available. Due to this, it is no wonder that it can often be quite a daunting process for first time investors.
Below are some pointers that will help make your first purchase an enjoyable and profitable one.
BUDGET
One of the first important steps is to take a look at your budget. Talk with a financial adviser as to the amount that can be comfortably borrowed and make allowances for fluctuations in interest rates that may occur. Ensure that your budget can accommodate such changes. Enquire about the tax benefits that you are entitled to receive. Finally, once your budget has been determined, avoid the temptation of straying from it.
RESEARCH
Following the establishment of your budget, it is time to proceed with the important task of doing your homework.
To locate a suitable suburb, look into the following factors:
- Growth in population
- Rental market rates
- Age of population
- Average income of residents
Areas that are situated, in close proximity, to the following features have proven to be advantageous:
- Schools
- Shopping Centres
- Freeways
- Public Transport
Suburbs that have easy access to the CBD by public transport or major roads are also a good choice.
PROPERTY SELECTION
When your budget and potential area has been determined, the next step is to search for and select an ideal property. Narrow down the type of dwelling that you are interested in such as a unit, house, land or apartment.
Use weekly newspapers, of the potential area, to view properties that are on the market. Search online real estate sites for listings in the ideal suburb. It may be a good idea to set your search parameters to include properties in the surrounding suburbs.
Contact local real estate agents and describe the properties that would fit your criteria, as they are often able to inform you of properties that are about to appear on the market.
Once you have selected an appropriate property, take into consideration any improvements or alternations that are required and make an offer.
MANAGING YOUR PROPERTY
You may decide to manage your own investment property. However, many take advantage of using the services of a Property Manager.
Select a company that has a good reputation and a history of experience with dealing in property management.
ROLE AS A LANDLORD
Becoming a landlord also attracts responsibilities in keeping your dwelling and your tenant safe while they reside in your property.
Acquire Landlord Protection Insurance to protect yourself from loss of rental income and any damage to your investment property. Make sure that smoke detectors are installed and functioning. Safety switches are also another option for peace of mind for you and your tenant.
Specify that you are to be notified, after inspections, of any degradation on your property that requires attention. This will ensure that your property remains safe and retains or increases its value.
