Top 5 investing tips for new property investors
Every investor had to start somewhere and whilst we’d all like a crystal ball to tell us exactly where to put our hard-earned money, knowing ‘how’ to start can be the difference between actively investing or not doing it at all.
Taking the first step as an investor requires significant thought and planning. Here are our Top 5 Investing Tips to help new investors embark on their journey:
1. Investing within your means
There’s an abundance of information on property from market trends, hot spotting and research reports, media announcements and advice from people you know but what’s most important is you the investor.
Understanding your financial perimeters and ultimately your capacity to invest is absolutely critical. This is one of the key factors you need to make an informed investment decision yet many people are unsure of how to do this. People will give you advice based on the property market, but you need to work out “what is going to work for me?”.
Think of cost in two ways: i) what will the property cost me to buy, and ii) what will the property cost me to own. If you look for properties within these perimeters it means that you can still live a comfortable and enjoyable life whilst you’re investing. Additionally, this clarity helps to identify whether specific properties work for you.
2. Leading indicators of growth
Statistics based on past information is only useful when we’re looking at overall trends. To identify locations with growth potential, then we need to look at leading indicators that point towards public and private investments, new infrastructure or changes and catalysts that will make the location even more attractive for people to live. The increase in demand is what drives prices to rise. Likewise, the suitability of the type of property to appeal to the largest tenant demand in that particular location is critical. Leading indicators look towards how a location will evolve.
3. Long-term view
We can all think of things that get in the way of investing, no time, don’t know how etc. but property investing is a long-term wealth creation vehicle. It becomes less about what point you enter the market and more about the length of time you allow your investments to mature in the market. Investors are always dealing with external factors such as interest rates, changes in lending restrictions, availability of finance or media sensationalising the market but despite these environmental factors property has proven to be a consistent performer in wealth creation.
By taking a long-term view on your property investments you can ride out the bumps in the market and give your property time to grow.
4. Protect your assets, protect yourself
Like all investments there are risks and investors are not immune to things going pear shaped, even the most experienced of investors. Protecting yourself from unforeseen circumstances must be part of your strategy. This refers to everything from the property’s insurance, landlords insurance and your personal insurances.
Protect your assets so if anything goes wrong, you have a financial back-up. Protect yourself as this could help you keep your portfolio in dire circumstances so your family is well looked after.
5. Surround yourself with property savvy professionals
Having a collaborative team of professionals working towards your individual goal is relevant to all the previous points. Various professionals such as your mortgage broker, accountant, financial planner and property researcher will all share their perspective and area of expertise. It can be conflicting or could be the X Factor in being able to navigate through the changes and potential turbulence of a market. This is the team that can help you identify the best investing structure, how to optimise your return on investment and how to work with potential changes so you become a resilient property investor.
Investing in property is much more achievable than people think. Equip yourself with information, surround yourself with a collaborative team and have the courage the take the step so you can shape your financial future.
Active Property Investing offers a boutique service to help busy people successfully invest in property across Australia.
Save time and stress by having someone walk you through the process and access well-researched properties, many of which won’t be advertised on the open market.
For more information or to speak with a consultant, call 1300 449 974.