First-timers know what they're doing
Australia's new investors are a savvy lot who see benefit in putting their money into property, according to a new survey released this month by national mortgage broker Mortgage Choice.
The 2011 First Time Property Investors Survey shows that one in five of the respondents will be buying their first property as an investment rather than to live in.
The number one motivator to buy was `I want to set myself up financially for the future' (82 per cent), then `I see more benefit in investments such as property than I do in shares' (57 per cent).
`Tax benefits' ran third (53 per cent), followed by `I've researched the property market and feel property investment will enable me to achieve my financial goals sooner/better' (40 per cent) and `potential rental yields' (39 per cent).
Mortgage Choice spokesperson Kristy Sheppard said, that the results show these first time property investors to be logical, long-term thinkers who were determined, careful researchers and aware of their limitations.
"This may be why so many are buying for investment purposes before becoming a home owner", Ms Sheppard said.
"They are making educated choices based on a long-term commitment to their property cause and are thinking with their heads rather than hearts.
"All are vital attributes of a successful investor.
"For example, 84 per cent already knew how much of an interest rate buffer they were going to factor into their repayment budget and only 2 per cent weren't putting in a buffer.
"Also, 47 per cent were looking to hold onto the property for 10 years or longer and 43 per cent were looking at five to 10 years."
54 per cent of respondents also owned their first home and 27 per cent had owned more than one home before.
Other key results
- 44 per cent were not concerned by falling property prices and 40 per cent were only a little bothered.
- 23 per cent will purchase alone, 69 per cent will buy with a partner and 5 per cent will buy with friends.
- Most common finance strategy was borrowing while using equity in their home as security.
- 69 per cent will make, or are already making, lifestyle sacrifices in order to buy.
- Favourite property type was a small house of one to three bedrooms.
- Top two property features were tenant demand in the area and right suburb and street.
