Six Property Investor Tips
By | 23rd Jul 20

1. Know your budget

Before investing in property it’s vital to have a thorough understanding of your cash flow and know what your upper limit is. It is important to ensure you have savings tucked away for a rainy day incase there is an unforseen repair cost or you lose a tenant. Also, ask your bank for a pre-approval of your investment loan, so you know how much you’re able to borrow before you start hunting for properties.

 

2. Buy in a growth area

Try to choose an investment property in an area where there is strong demand for rental accommodation. Buying a property close to transport, universities and schools will make it more attractive to renters.

 

3. Know your strategy

Are you looking for fast capital growth or wanting to hold the property long-term? During boom periods, it’s much easier to renovate properties and turn them over for a quick profit. In slower economic times, it may take many years to achieve the same growth. We often say it is "time in the market" not timing the market meaning all investments should be treated as a long term purchases and not just a quick flip. It is also important to consider if you are wanting to be positively geared or are looking for capital growth as these choices will change where and what you purchase. 

 

4. Build sweet equity

Paying tradesmen to renovate your investment property is costly. If you’re prepared to get your hands dirty you can save money and increase your profit margin by doing the work yourself. Things like demolition, painting and landscaping are easily done by yourself.

 

5. Buy with your head and not your heart

Remember a rental property only has to be clean and functional. Don’t get sucked into buying a property simply because it has a stylish interior and is brand new and all polished.

 

6. Get a building inspection

Before signing a purchase contract, take the time to get a building report to avoid expensive repairs down the track. Termites are one potential problem to watch out for.