5 Factors to Consider when Starting in Real Estate (Expert Tips)
Are you new to real estate? Do you want to know some practical ways on how to get started? In this article, you will learn what you need to know about property investment, straight from the experts who have been in the business for years.
Getting started in property investing can be confusing and costly if mistakes are made, but with careful planning and first-class market information, kick-starting your financial future can be a breeze!
The first decision for first-time investors should be to decide on their budget – and then stick to it. It sounds obvious, but knowing your budget and getting pre-approval for your loan in writing so you can put in realistic offers with confidence is absolutely critical.
You also need to factor in purchase costs such as stamp duty, mortgage costs and settlement costs.
2. TYPE OF HOME
There is a huge difference between buying a home and purchasing an investment – the best opportunity for capital growth may not necessarily be the newest, nicest property. Investors need to carefully consider why they are buying and what they expect from the purchase.
However, there are issues to consider such as if you are willing to undertake renovations, how much maintenance you want to deal with and if you want to manage your own investment. All of these decisions play a part in deciding whether to buy a house, unit, townhouse or any other property that best suits your needs and budget.
Limiting your search for an investment property to one or two suburbs is ideal, especially for new investors. It’s imperative to know as much as possible about the area you’re wanting to buy into – including that you can afford to buy the specific property type you want in these suburbs. If not, you may need to look to a suburb further out or look for an older property.
When you’ve chosen your target suburb, the next step is, knowing the right price to pay for any property.
One of the best ways to ensure you can accurately assess how much to offer is by looking at 50 to 100 properties in that suburb and assessing their eventual sale prices, with the aim of being able to walk into a property and know what it is likely to sell for within a few per cent.
Once you have found a property you are keen to purchase, decide what it’s worth in the current market and make a good offer, being careful not to overpay and ensuring you have the right terms and conditions. The key is to act quickly, but to not get carried away when there is competition or pressure from the sales agent – and jeopardise the performance of your investment by overpaying just to get into the market.
Another crucial piece of advice is not to try and time the market. Holding back believing prices may drop can leave you wishing you’d got in sooner and not tried to pick the exact bottom.
Fear and indecision can have a huge cost in real estate, as can delaying buying in order to save a bigger deposit.While this sounds like a clever strategy, it can hit the hip pocket hard as you can miss out dramatically in lost equity and potential capital growth.
Watertight research and data are critical in property investing, and there are a raft of ways to access such information, so don’t be afraid to seek expert help if you’re not sure as it can save a lot of headaches in the long run.
If you want more information about property investing, why not read our Property Investing Beginner’s Guide eBook. Or, if you’re ready to talk about buying your first home, why not complete our Getting Started form to get the ball rolling.
If you’re ready to invest and you’ve got any questions about finance, call us for a free Financial Health Check: 08·9381·7450 or download our Finance Services information.
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We can help you unlock the potential of the real estate market for your family through savvy property selection, negotiation on price and conditions, development expertise and the magic of robust research.
Regardless of market conditions, our research, local knowledge, and access to silent sales means we find the hidden gems that can outperform the market in capital growth and rental returns for long term wealth creation.
Importantly, we’re able to provide property investors and homebuyers with the same level of representation that property sellers have benefited from for years.
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Property Wizards takes away the stress of buying a property and saves you money at the same time. We can show you how, or you can sit back and let us do all the hard work for you.