YOU WANT TO INVEST – BUT WHERE TO BEGIN? HERE ARE SIX STEPS TO GET YOU STARTED IN PROPERTY INVESTING
STEP 1. WRITE OUT YOUR GOALS AND OBJECTIVES
Assess your situation and decide what you want to achieve in the short, medium and long term. Treat your goals as commitments and stay focused. Write them out as a to do list and take action on each one.
STEP 2. SAVE A 20% DEPOSIT
Draw up a weekly budget and stick to it. Cut out unneeded spending and be frugal. Do you already own a property? How much equity could you access to use for deposits? Once you have a deposit, figure out your weekly/monthly costs – and I don’t just mean loan repayments. Draw up a budget for the property you want to buy. Include expenses such as council and water rates, strata or building insurance (depending on whether it’s a unit or house), estate agents’ fees and annual smoke detector fees. Don’t forget hidden costs like stamp duty, legal fees, land tax, utilities and unseen renovations. How much rent will the property earn? Will it cover all of these costs?
STEP 3. BUILD YOUR SUCCESS TEAM
A lot of people choose family friends which, though nice, may actually hold them back. Using the wrong team of professionals can be detrimental. Are they experts in property investing? If not, it is unlikely they will provide the best service – whether friends or not. One of the unique things about the Binvested group is that we are all investors. We know what is best for our clients because we have professional and personal expertise in investing. When choosing your mortgage broker, accountant, solicitor, financial planner and buyers agent, don’t be afraid to ask the hard questions. Cross-examine them to see if they really do walk the talk – because a lot don’t.
STEP 4. PLAN YOUR STRATEGY
How will you structure your investing? How will you finance your portfolio? Before buying anything, you need to build a strategy. Consult with your success team about which strategy is the best for you. Binvested runs group map sessions for our clients. We get together, talk about their goals and financial situations, and decide on the best strategy for them.
STEP 5. PURCHASE PROPERTIES IN LINE WITH YOUR GOALS
Depending on your age, profession and amount of capital you have, whether you are single or married with kids, you will have different goals, opportunities and time frames for your investing. Are you looking to build equity by increasing your assets, or is it more cashflow you need? These considerations shape your strategy. Purchase in-line with your goals.
STEP 6. HIRE THE RIGHT PROPERTY MANAGERS
Is your property manager pro-landlord, or pro-tenant? Will they conduct regular rent reviews to maximise your cashflow? Make sure they are proactive and not reactive. Compare agents to see who is charging the higher end of rent for comparable properties. Sometimes you have to find a bad one to understand the value of a good one.