10 Tips for Your Investment Strategy to Work
Exciting news…looks like the Australian Property Market is on the rise again!
Are you a property investor and have been waiting for this to happen? It’s been really great with the interest rates so low, what opportunities to invest – but the market is on the move…up wards.
There is a lot more buyers interest and due to the competition alone prices will start sliding up wards
Using investment property as your wealth vehicle, it is a good idea to have a clear strategy in place and to follow a few simple guidelines
1. Surround Yourself with a Team
You might think you’d like to know it all, but realistically that’s not really possible…the simple and most effective way: surround yourself with a team of experts. Find a trusted lawyer, accountant, finance broker, insurance broker and property manager, to name a few. Build on this team as your investment property portfolio grows. These experts know what they are professionals in so you can do what you love…looking for the right investment property to buy!
2. Know Your Financial Situation
Knowing your borrowing capacity helps you to plan how many properties you can buy, what type, what price range. This makes it easy to grab oportunities when they arise quickly. Be in a position to make a decision by knowing your financials and it also helps with forward planning
4. Set up the Right Format
It is not only important to know what you want to buy but also how you are going to buy it. Prepare your financial format before you start looking for property so you don’t struggle with asset re-arranging and trust set up just at the time you should focus on the purchase. Set up your asset protection vehicle before you buy
5. Establish Your Strategy
Successful ventures come about with careful planning. Set out your strategy…for example, are you going after negatively geared high growth property, cashflow positive property or somewhere in between? What can you afford, where do you want to be when? Do you plan to buy and hold, or renovate and sell? Get clear on your strategy
6. Set Yourself Buying Rules
Cover these basics: ‘where to buy, how much to buy for, why this property, and how does this purchase fit within my overall investment strategy’? Setting yourself buying rules helps you focus your search on properties that fit your investment strategy
7. Finding the Right Property
How do you know what the right property is? The best tip here: do your research, continue your research, always do research. With a property manager and real estate agent in your team of advisers doing research will be easier to know where and what the right property is for you
8. Do the Figures
The property investors golden rule is: Fall in Love with the Deal, NOT the Property. Analyse the figures- including confirmed rental income/potential, verified by independent property managers – as well as ongoing ownership costs and mortgage expenses to ensure the property is aligned to your buying strategy
9. Learn to Negotiate
Negotiating is a skill you can learn. This is where you make your profits, as the money you save as a result of your negotiations is money in your pocket…and be prepared to walk away!
10. Make Inspections Part of Your Process
Building and pest inspections are an important part of conducting your due diligence, don’t skimp on them! They are well worth the money you spend and can have an impact on your negotiations
Be Ready for Ownership Takeover
Once your contract has gone unconditional, be quick to arrange appropriate levels of insurance (building, contents and landlords insurance policies) so everything is in place for you….and do get a property manager in place. This is an expense well worth it. Property managers know the laws and of any changes in the laws. They create a barrier between you and the tennant and make all dealings with your property easier. Plus, a good property management agency will do effective research into the tennants background, something not easy and open for you as an individual
There you have it, 10 Tips to be on your way for the next property boom, it’s the start, be preapared and in a position to make your move