14 Tips to get you ready to invest in property

Investing in property can be extremely daunting, especially if you are a first timer but it can also be very rewarding. 

Before you start - here's my 14 starting tips

1. Read 1-14

Understand and plan before you look at a house, unit, etc and especially before you write an offer.

2. Know your budget.

List your assets, your income and all your expenses. Find out how much cash you have available to invest.

Work out your budget; this is a boring task & one we tend to avoid because we don’t want to admit how much we are spending on things we probably don't need.

Looking at your expenses and tighten the belt where you can so you can prepare for the unexpected.

3.   How much can you afford to borrow?

Visit your favourite mortgage lender, bank or a trusted broker and have a chat. (Don't have one - ask me to suggest one of the nicer mortgage brokers / banks I deal with).

See what your budget allows for and consider reducing some of your other debts such as credit cards, car loans, and any other loans. There's always many options around consolidating debt, you may want to discuss this with a financial adviser.

4. One application only!

Do not apply with multiple lenders as this will show on your credit rating and may send a red flag to the lender when you finally decide to proceed.

5.   Establish your goal. 

What do you want to achieve.

What will investment success mean to you?

 Set yourself a goal and a time frame to achieve it.

 Map out what you need to do to along that set time frame to reach your target.

6.   What is your appetite for risk? 

What risk profile can you tolerate? For example - would you feel comfortable buying property in another country, another state or down the street from you.

Once you know what you are comfortable with then you can adapt your strategy accordingly.

7.   Prepare a purchase plan. 

A purchase plan sets out the structure for enabling your goal of growing your portfolio.

To create on make sure you include the following;

 Define your strategy. Ascertain what is important to you, capital gain or cash flow? Negative or positive gearing?

 Set up your criteria â€“what are you looking for in the property?

Look at your legal structure - are you planning as buying as you, a company, your self managed super fund, (talk to an accountant / financial planner about the tax and legal implications of your property purchase)

8.   Do your research

Find out as much as you can about the location and its surroundings, the council, infrastructure, what types of properties are in high demand for that area etc. 

 Cull your list – once you have made a list off all the properties you are interested in, prioritise them and analyse which ones are worthy and meet all your criteria until you can narrow it down to just a few.

Find out is the property Green title, strata, survey strata, built strata - get all the information you need around the property and the rights and obligations (& costs) attached to the property.

9        Get an appraisal

Find out how much you should really be paying for the property compared with others similar on the market. (I can provide a detailed appraisal on a property you are considering buying in WA - call me on 0431 417 345 or 9330 5277 anytime).

 10. Do your due diligence

Get the experts in and have a building and pest inspection done. These are an insurance policy against things that are already potentially wrong with the house. Good reports will also highlight areas for future maintenance and follow-up. People generally neglect maintenance of their property, so make sure you consider what it will take to keep the property in a good working order for longer.

11. Check with the council

Many properties I see have unapproved structures. You need to know whether you are buying an approved house or not. Don't rely on the real estate agent for this information, as many owners often don't know themselves what is and isn't approved (and the real estate agent is relying on the owner to declare what they know).

12. Check the property zoning and what it means for the property

Properties have R codes that relate to zoning, however different councils treat the zonings differently. The WA Planning Commission is the ultimate decision maker and they also have different rules and authority levels. For example they may say it is zoned for 2 properties, but in actual fact applying new criteria or the 5% rule or different height limits or densities you might be able to get 3, 4, 5 properties on the same property.

13.  Research, Research and More Research 

Research the market as much as possible. Search the internet for as much information as you can. Talk to professionals in the market (real estate agents, councils, surveyors, investors, accountants, financial planners, lawyers, settlement agents, people that live in the area).

14. Negotiate

After working through 1-13 you are ready to start the negotiation process.

If you would like the help of this real estate agent - here's what to do:

Call Peter Taliangis on 0431 417 345 or 9330 5277 or email peter@professionalsultimate.com.au

Peter Taliangis

Licensed Real Estate Agent - Sales and Property Management

Professionals Ultimate

https://www.professionalsultimate.com.au