Everything You Need To Know About Real Estate Investment
A lot of people think their first investment property is all about buying the biggest and best one that they can. And they often have that mindset without even taking the time to come up with a plan or visualise an end goal.
Before doing anything, a property investor should have clarity about their financial goals and what their properties should achieve. Once the game plan is in place they can start taking action.
Our powers combined
Got your financial goals sorted? Now, it’s about getting the right team around you. Make sure you have the right broker, the right accountant, lawyer, and other professionals you need.
Most property investors get stuck at one or two properties. There are less than 18,000 people in Australia- 0.001% of the population- which has six or more properties. You want to have the right team that can help you get to 10 or 20. There would be very few out there that have three, four, or more properties that don’t have the right team around them.
Everybody needs a broker, a lawyer, an accountant. Just make sure the ones you engage are competent, have an understanding of what you’re trying to achieve and have been able to help other people along the way.
What about if I don’t have the money saved for a deposit?
Getting a deposit together in a low interest rate environment is especially tough these days.
But there are ways to get some money together that you may not have thought of. b Invested founder Nathan Birch saved about $40,000 to buy his first property, out in Western Sydney for $248,000.
To save up $40k, which was a lot of money back in the early 2000s, he pushed himself, worked hard and did all the usual things, but he also had an eye for a rare bargain or opportunity. On one occasion, he saw an old Toyota Corolla, unregistered, on the side of the road. It was for sale for $300.
He looked in the window and saw it had a new Sony radio deck in it, which alone was worth $300. He called the seller, offered $150 and got it. He took it home, advertised the car in the trading post and flipped it for $900 and took the radio out of it and sold it for $300. He made all that money in one weekend on top of his regular job.
A man with a plan, and a van
Nathan also used to flip caravans back in the day. He’d buy them for $2000, put them back in the trading post with a better ad and sell them for $3000 or $4000.
There was no Uber, no eBay, no ways of earning money from YouTube or social media, so it was difficult. But you could still get a side hustle.
You might have a deposit but no means of servicing a loan, while a sibling might have no deposit but they do have the ability to service. You could do a deal and go halves with them.
If you do go down the path of a joint venture, you need to be careful about a couple of things. Imagine one sibling wants to go travelling and partying and the other wants to settle down. One may want to sell the investment property, while the other one might want to keep it. These differences can put a void in the relationship. You need to have clear boundaries as to what the property is going to do specifically and agree on that from the beginning.