Last week in our Facebook Group, we welcomed three property and finance experts to explain…
Want to invest in property? Here is how to get started
So, you have been curious. You are tempted. Everyone seems to be doing it. Why shouldn’t you do it too? Yes, I’m talking about property investing. What used to seem like an elusive pathway has now been brought into the mainstream, and following Sydney and Melbourne’s booming market conditions in recent years, it seems like a great idea.
But where do you even begin? Get educated!
Here are 3 things you need to do to get started in property investing:
- Sort out your finances
Before you begin investing, it is important that you a) know your financial motivation to start investing and b) have a solid financial base to start off with. So, what are you hoping to achieve financially through investing? A passive income? A healthy cash flow? Retirement security? Financial freedom? Knowing what you hope to achieve will narrow your focus and help you reach your goals.
It is also important to have adequate finances to begin with. Though it’s not reserved only for the wealthy, investing can be expensive, so you need to make sure you have enough money to cover all the necessities before you start seeing any return. This is why it is a good idea to work towards clearing any debt you may have.
- Talk to a mortgage broker
Before you start spending your Saturdays trekking around to different auction sites, make sure you have got pre-approval from your lender first. Pre-approval is an agreement from a lender that they will allow you to borrow a certain amount of money, to be used towards your investment.
While pre-approval is not essential, it is definitely a smart step, because it means you will know exactly what your budget is before you begin property shopping. It also means you can narrow your property search down to what you can afford.
Do some research into the different home loans available from various lenders, or better still, contact an experienced broker, such as our team at Zippy Financial. Generally there are three main types of home loan: basic (with few features and a low-interest rate), standard (which offers a bit more flexibility) and package deals (which include incentives like no-fee credit cards and transaction accounts). We can help you navigate the various products and choices available, to match you up with the best loan for your needs.
- Get the right people on your team
Successful property investors understand the importance of outside help, so consider getting a few team members to assist you in reaching your goals. Who should you have by your side?
A property investment advisor can help you get a clearer view of the properties you should be going for by giving you expert advice on everything, from the best locations to the potential risks you will need to consider. A mortgage broker can help you navigate the home loan process, while a buyer’s agent can guide you towards the best quality property your money can buy. An accountant can help you file all the necessary financial documents once the sale has been finalised, and allow you to stay on top of your taxes!
Hiring these guys might seem like an unnecessary expense at first. But, with professionals on your team, you will be able to make smarter investing decisions that will ideally lead to a successful outcome. Over time I’ve discovered that you pay for good advice somehow – either through trial and error and making mistakes, or through paying for strategic advice. I know which one I prefer!
Property investing can be an intimidating game to get started in. But as long as you do your research and plan properly before you begin, you have the ability to create the wealth and financial freedom necessary to live your best life.
Louisa Sanghera is a Finance Broker for Residential Mortgages, Vehicle and Asset Finance, Commercial Lending and Budgeting and Cashflow Coaching with Zippy Financial.
She has gained more than 30 years in the Banking and Finance Industry, and since founding Zippy Financial, has become a multi award nominated expert in the field of finance featuring regularly in industry press and speaking at finance and investment seminars across the country.