If you’re interested in becoming a property investor, there are a few things you need to consider before you get started. Here are what we think are the four most important.
- Ask yourself: what’s my long-term goal? What kind of financial strategy do I need? Is it achievable with property? Work through the numbers so you know what you can afford and what returns you’ll get. Build in scenarios including periods of no-rent, and the financial impact of any potential interest rate rises. Consider an exit strategy, just in case you need one. If you do the due diligence up front, you’ll be more comfortable with your decision.
- Find a mortgage broker who understands what you’re trying to achieve. I’m not recommending tyre kicking. Ask around, friends and colleagues might be able to refer someone good. You can also get a thorough understanding of a Broker’s professionalism and experience by viewing their online profile and following their social media. When you’ve decided on someone you can relate to, set up a meeting and ask about their recommendations around your strategy.
- Don’t make an emotional buy. An investment property needs to be chosen for practical reasons. There are lots of considerations so make a decision based on fact, not feeling.
- Know the tax benefits and implications. If you have an accountant then it is worthwhile investing in a couple of hours of his/her time to understand what you can claim and what you can’t, and also set up a simple accounting system to keep track of your expenses and income.
At Simplify Finance we have lots of experience in helping people to start their investment portfolios. We’d be delighted to help you.
Call us on 02 9518 5728.