You need to research before you get involved in property investing. You need to buy the right property in the right location to attract the best tenants. Co-ownership has advantages because you can afford a more expensive property with the possibility of greater capital gains. However, you must have legal agreements in place. Buying a property with a friend or a family member is an effective way for first time buyers to overcome some of the financial barriers when property investing. If you choose this investment road, make sure you join forces with someone you trust!
Most people believe that property investing represents the best investment opportunity. Australian property has been the high achiever in terms of capital growth for many years, doubling in value on average around every ten years. Although past performance is no guarantee of future returns, there are indications that property will continue to be an astute investment. Property investing can build your wealth. Often a property portfolio can increase your personal wealth more than your day-to-day income. In Australia, investors can borrow up to 80 per cent of a property purchase price. In fact some mortgage brokers will loan up to 95 per cent. This means you can grow your portfolio from a low base.
Before property investing, research the market to ensure you are well informed on where and what to buy as well as how much you should pay. The more research you do, the less mistakes you will make. Don't just research the Internet, go to auctions and open houses, attend seminars and read magazines. However, don't waste valuable time by watching the market for too long because you keep hoping for a bargain. Make a decision and invest.
Determining your budget for property investing is common sense. The best way to do this is to arrange a pre-approval through your lender, bank or mortgage broker. When you know exactly how much you can afford to borrow, and what your property price rang is, you can start your search. Your first property investment may be considered the most important because it will lay the foundation for your investment portfolio. Sometimes this is a learning curve, and you make better choices the second time. With diligent planning you will minimize the margin for error. When property investing, you need to be supported by a team of professionals including a good lender, an accountant and a legal consultant. Capital growth is the key so look for property that will grow quickly in value, or which presents opportunity to add value through renovations.
