Investing in property is a proven way to help build long-term wealth. However, even the purchase of just one property is a major commitment. The good news is that when you have the right property investment advisor by your side, you will be in a strong position to put in place the strategy that delivers the results you desire from the property market.
Here, then, are some of the tips that inexperienced property investors are well-advised to follow.
Be Clear About Your Financial Position
As a general rule, when you are looking to invest in property, it is advisable to have a deposit equalling around 30% of the asset’s value. You will therefore need to carefully scrutinise your income, assets, and expenditure, so that you can calculate the amount you are able to comfortably invest.
If your intended investment will necessitate taking out a mortgage, it is well worth discussing with a mortgage broker how much you will be able to borrow. This will enable you to establish the price range you can realistically aim for with the property you purchase, as well as how much the mortgage is likely to cost you over time.
Treat Property Investment as The Business That It Is
Even when they are clear from the outset that they are looking to invest in a property as an income stream, many first-time investors follow the same buying criteria that they would if they were intending to live in the property themselves.
While choosing a home is largely about the heart, property investment needs to be about deciding with the head. So, you should be mindful of the need to take a business-like approach to property investing.
Familiarise Yourself with The Risks, And Determine Your Risk Appetite
Any asset class presents certain potential risks to investors. By determining what those risks are for you as a first-time property investor, and planning for them, you can take the steps to help protect yourself.
There might be times, for example, when the local rental and sales markets are not performing well, which could cause a decrease in your rental income or your property’s value. Interest rates may also go up, which could heighten the cost of borrowing – and therefore the costs associated with your property.
You should ask yourself whether you are well-prepared for risks such as these, and how much risk you are willing to take as an investor.
If you are interested in investing in property for the first time, you can help minimise the risks and stress involved by consulting a well-qualified property investment advisor. Schedule an introductory appointment with Simpler, to learn more about how we can advise and assist you.
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