Invest in property with a suitable plan

Choosing to invest in property is a decision that should not be taken lightly and requires a lot of prior thought and planning. The process in itself is life changing for most new investors and can completely change how you live your life.

Owning an investment property has many benefits and can improve your wealth over time but throughout the lifetime of your investment there will be added pressures and challenges that might make or break you.

I believe a suitable Property Investment Plan is the key to reducing such challenges and pressures while also ensuring the success of your investment.

So your next question might be; what could be a suitable plan for me to consider before I invest in property?

The truth be told there is no easy answer to this question. Your plan will need to reflect your current/future needs and aspirations and is completely personal.

Here is a list of some of the things that I think should be considered and carefully planned prior to investing:

You finances

  • How much can I pay?
  • Do I need a loan or should I use my own savings?
  • Do I need to have tenants and how long can I service my property in the case of no rental return?
  • Should I get wage insurance?
  • What hidden costs may come about and how can I manage them?

Type of property/location

  • What do I want?
  • Where do I want to invest?
  • Will I move in and make it my principal place of residence after a certain amount of time or sell it off sooner or later?
  • Do I want high rental yield or do I want higher property growth?
  • Am I happier with higher growth on property value?
  • Do I want my investment positive or negatively geared?

Current lifestyle and future lifestyle

  • Do I want to travel more and will I still be able it afford it?
  • Do I need to employ professionals (accountants/property managers, etc.) or will I look after everything myself?
  • Do I have time to manage my investment?

On the whole there is a lot to think about when investing. I’ve found planning ahead in general reduces my stress and gives me a clear view of what I need to do. It helps me stay motivated and places me in a position of power, where I decide, what I want and how I want to do it. You don’t need to plan every contingency but I think it’s critical that some form of plan is put in place before investing or making any major change to your life.


5 Things to Ask Yourself Before You Invest in Australian Property

Tempted to go back in to real estate? Here are 5 questions you need to ask yourself before jumping on the investment bandwagon.

Can I afford to put down a 20% deposit?

Gone are the days where it is cheap and easy to borrow 100% of a home’s value. The financial crisis has forced banks to tighten their credit policies and be selective who they give their money to. That is why if you are testing if you can afford a loan and if you are financially ready to pay a monthly mortgage, see if you can afford to pay 20% of the principal amount.

Who can I turn to for money?

Buying any investment property in Australia is easy if you have your finances ready. For one thing, it gives you great negotiating power, giving you enormous opportunity to squeeze a better price. For another, it gives you freedom to buy that dream home once you’ve found it or stumbled upon it, giving you great advantage against competing buyers.

Do I know what I want?

Knowing what type of house you want, what location and what price you can afford to pay will not only save you time but also money. So do your homework, check out the property for sale in Australia, get any data available about the investment property you want, the recent sales in a particular area, and the changes in the local demographic.

Can I trust my income?

Buying a house with a mortgage can be a big financial responsibility. You will have to take away a portion of your monthly income for payment to lenders. This can throw your budget out of balance if you don’t have a reliable source of income that can cover this additional expense. And of course, you must have an adequate safety net for emergencies such injury, pregnancy, theft and the like.

Am I ready to settle down for at least 5 years?

Renting gives you flexibility to move out at a short notice. Ownership doesn’t. It may take 5 years to 7 years before you can recover from the purchase cost. So be prepared to settle down for at least five years.

Property investment needs planning and preparation. So before you start to invest in Australian Property, be sure you are ready to buy.