As a new property investor, you should plan how to start powerfully so you can be strong enough to continuously grow your investment portfolio. First, you should know the specific reason why you want to invest in property rather than other asset classes like shares.
You should also understand the risks of property investment and know that prices don’t necessarily continue to increase even if it did consistently for several years.
Value growth is seldom consistent and linear. There can be growth spurts and some periods of inertia. Remember that capital growth is difficult to predict. Vacancies and damaged properties are also part of the risk. In high demand areas, discounts are also rare.
You should stick it out even if you experience periods of slow to no growth before values increase. There is no guarantee that you will see growth quickly even if you picked the right area and property.
You have to be ready to hold your property for at least one cycle of around seven years to make a solid gain. Ensure you have a positive cash flow to avoid selling your property prematurely.
Read several books about property investment written by different authors and build your deposit by creating a budget so you live within your means. Remember that property investing is a long-term game and you can start with buy and hold, which is the basic strategy.
Do your research, protect yourself and be wary of people trying to sell you something. You should know how to read a property market from its supply and demand qualities, instead of your past experience with the area.
It may be best to buy existing properties rather than new ones, which come at a premium and drop in value right after purchase. You can also buy an old period or character house because these often make great long-term investments. However, make sure the house is in good condition.
Proximity is always a huge demand drawcard. Don’t forget that the closer the property is to the CBD, the more convenient it is for tenants. Look for a property with development potential like a block of land that can accommodate a duplex around 550 square metres or more.
Start planning early so even if you make some mistakes, you still have plenty of time to set up for early retirement.
What can you do?
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