Tips For Achieving Your Property Investment Goals
To be a successful property investor, having a well-thought investment plan is an important step to take before you purchase an investment property. This is because a goal without a plan is just a wish. In order for you to achieve your property investment goal, you got to have a concrete plan in mind.
Let’s look at some tips you can use for your investment plan:
Tip #1: Know your financial situation
Working out how much you can afford is a sensible part of the plan. Can you afford an apartment or a house in your desired location? Can you pay for the maintenance costs of the property? Can you afford the loan repayments, body corporate fees, and insurance?
Calculating all of the expenses, the upfront and ongoing costs, can give you an idea of how you’re going to achieve your investment goal. This can give you a clear idea of what your monthly income and expenditure will be. Additionally, applying for an investment loan that is suitable to your financial situation will help.
Tip #2: Create a strategy
Negative gearing, positive gearing, and neutral gearing are some of the terms you hear when investing in a property. Gearing is an important aspect of your investment strategy.
To put it simply, negative gearing is where the expenses of the property are greater than the rental income. Positive gearing is where the income the property generates is greater than the expenses. This can cover the loan repayments and there is less risk. Lastly, neutral gearing occurs when the expenses and income are equal.
Make sure to know what kind of strategy will work for you and your property investment.
Tip #3: Do your research
Do you already have a property investment in mind? Who will your target renter be? And how much is the median rent? Doing your research prior to buying will give you better understanding of what you’re getting into once you've bought the property.
A well-thought-out plan with the right strategy is the secret to property investment success. Make sure to do your due diligence so you can make a good property investment decision.