- Posted 02 Apr
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Property investing can be a great way to build wealth and security for your family, but if you don’t know what you’re doing, it can also be a quick way to financial hell.
Follow these tips to ensure that your property portfolio makes you money, not stripping it away from you and your family.
The Starter Guide – Property Investing Tips
Tip 1: Have a Team
Do you know what makes a good manager? Someone who knows how to delegate and surrounds themselves with people that can do what they can’t – and that’s called a team.
You can apply this same philosophy to your property investing – you can’t know everything about investing, if you did, you’d need a law degree, real estate license plus maybe a builder’s certificate. This is one of the first mistake a new property investor makes – trying to do everything themselves.
You want to leverage your time, and the best way to do this is to have a good team. A good property investor surrounds themselves with the following people:
- Buyer’s Agent
- Accountant and Financial Planner
- Legal Representative (Lawyer, Conveyancer, etc)
- A Mentor
A bit more on that last bullet point. A mentor is someone that can strategise with you and tell your next steps. Make sure you find someone that has plenty of experience in the market you are looking to purchase in and also understands your end goals.
Tip 2: Build a Solid Portfolio
When it comes to building your property investing portfolio, there are some key things you should be ensuring happen to make sure you have a solid foundation. You need to plan and make sure that you can also afford what you want to build in the time you’ve set aside to create the portfolio. Know the plan inside and out.
You need to think about the following areas when deciding your property investing plan:
- How will you manage your credit risk?
- Can you buy more than one property per year? What are the implications of doing so?
- How quickly will you build your portfolio? How does this affect your loan serviceability?
- Understand the difference between positive and negative cash flow and when to buy these types of properties (you should have both in your portfolio)
- Aim for capital growth properties
- Understand your own mental hang ups and deal with them
- Always have building and pest inspections completed BEFORE signing the dotted line
- Pre-approval is not a guarantee, they should be used as a guide only
Tip 3: Ask for Help
All experienced property investors know when they need help. Learn to ask for help when you need it and know who you can turn to if you do need help.
Get help in the form of property investing forums, networking with other property investors or by taking some property investing courses. Learn from those who have done what you want to achieve and then ask questions when you’re not sure.
Property investing is one of the best ways to ensure a secure and bright future for your family and to ensure that your retirement years are not spent penny pinching. The team at Australian Credit and Finance can help you with pre-approval and can also provide recommendations on which lender’s will work best for your situation. Get in touch with them today.