Planning to Invest
Jul 5, 2019
If you’re new to the idea of investing in property, then this quick and easy 4 point check list is for you. Here’s the basics to put into your overall plan to ensure you’re making sound decisions when investing:
1. Plan: A plan is called just that because planning is required. Research, ask questions, read everything you can, write it all down, prioritise and then be prepared to innovate. The market is consistent in movement and your plan will need to move along with it. Figure out what some of the things that “might” happen are, and work what you’d do about that into your plan.
2. Budget: Taking an objective look at your overall finances is a must. If you’re not confident to, outsource to a professional so that you’re on the right track when it comes to budgeting. Know how much you can spend, understand how much it will cost you in associated fees and charges, and have a buffer. Create a cash flow analysis and include the ongoing charges for management of the property. A good rule of thumb is to have about 20% for a deposit, 5% for stamp duty and legal and ideally, a bit of a buffer. Allow for about $50,000 for future cashflow so that even if you can’t afford to pay costs from wages, you’ve got this fund to back you up.
3. Get good advice about property taxation: Do you fully understand negative gearing, investment property tax deductions and capital gains tax? If not, find someone who does and book in to speak with them.
4. Research: What infrastructure is in the surrounding areas? Are there schools, doctors, transport, shopping centres? What’s already in place and what is planned? Are there many rental properties in the area you’re considering? Are there great tracts of land ready to be developed close by or will your property be one a small selection of rental opportunities in the area? What growth is maintained in your suburb? What’s your expected capital growth and your rental income? Always come back to the plan. Do the numbers add up? Was the research what you were expecting? Do you need assistance? Are you looking in the right area for you? Keep referring back to the plan until you’re satisfied with all the answers.
Want some help?
Here at Home 2 Home Realty, we offer a FREE consultation to help you understand property investing. We are here to help provide you with sound advice that will help you get your property investment portfolio started.
For a friendly and informative consultation, simply call our office to make an appointment – 08 9591 3328
Finding your new home
In our experience, going out and looking for a new home can be quite an emotional process. It is so easy to fall in love with a home without stopping to think it through.
Purchasing a new home is often the single largest investment you will make, so it makes sense to get it right.
Before you even step out the door, we have created a few simple ideas that will allow you to assess each home in a more analytical way to avoid you simply following your heart.
Step 1: Why are you wanting to move? This might sound simple but it is a good idea to sit down and write out the reasons you want to move house. If you are part of a family or partnership, get everyone involved in this process. The reasons might be very practical like moving closer to work but it is critical that everyone understands the motivation behind the move.
Step 2: Create your wish list. Many people have big dreams for their next home. It is a great idea to actually put pen to paper and write down what you are looking for in your next home. A great place to start is a list of what you don’t like about your existing home. Again, get everyone involved in this process as it might reveal some interesting thoughts you had not considered yourself.
Step 3: What do we do? Often we have lived in a home for a long time and the home may not have adapted and evolved with our life. This means that perhaps you bought a home as a couple and now you have a family. Consider where you are at right now and how you are likely to change in the next few years.
If you follow these 3 simple steps, you will have a very clear idea about what you are looking for in your next home. Be sure to take this list with you when you head out to home opens. It will make life easier and allow you to not only follow your heart, but be a little practical and follow your needs as well.
And a final word, don’t be afraid to talk with the agent about your wish list – they are there to help you.