So we hear you’ve been thinking about investing in property?
We’ll be the first to say – smart move, but we also know that it can feel VERY overwhelming. Where do you even start? What are the things you need to know? How can you make sure you’re not actually losing money in the pursuit to make it.
We get it. But you can relax because we’ve got you, and we’re here to give you our ultimate, no BS guide to starting your property investment journey the RIGHT way.
Step #1: Get clear on your goals
First things first, we need to do some soul searching. What are your reasons for getting into property investment? Are you in it for long term wealth or are you looking for a way to make some passive income? The strategy you create will depend on what your end game looks like, so stop scrolling realestate.com at 2am and whip out the journal to figure out exactly what your goals are.
Step #2: Know (and we mean really know) your numbers
If you really want to get into property investing for the long run, you can’t just go around buying a house and hoping for the best. Investing is a finance game as much as it is a property game, so understanding your current financial situation, borrowing power and how much risk you’re willing to take is a crucial second step.
Here are some things you’ll want to look at:
- How much money can you borrow based on your current financial situation? (Talk to a mortgage broker for this one!)
- How much financial risk are you willing to take on your investment?
- How much can you comfortably afford in repayments and expenses?
- What will the upfront costs be and are you able to cover these? (This will include things like stamp duty, legal fees and inspections).
- How much money do you have saved for a deposit, and are there any government schemes that may help you lower the figure you need?
It’s so important – not only at the start of your investment journey, but throughout it too, that you are crystal clear on your financial position. This will help you make decisions that are grounded in STRATEGY, always heading towards your goals.
Step #3: Choose the right investment strategy
There is no one-size-fits-all when it comes to investing, and your strategy should be completely tailored to your goals, financial situation and individual circumstances. In saying this, there are some common approaches that can be applied to your personal plan, including:
- Buy and hold: Purchasing and holding on to a property for the long-term, with capital growth as the main goal.
- Positive cash flow: Focusing on properties where rental income covers all of your expenses (or in some cases even puts some money in your pocket too).
- Renovate and flip: Buying a fixer-upper, adding value to it and selling it at a higher price point
- Rentvesting: Buying an investment property for long-term financial gain while you continue renting where you’re living.
It can be super helpful during the strategy step to lean on experts for guidance (like us here at InvestHER!) This will ensure you’re choosing the right strategy for YOU, and you’ll have the support you need as you get started.
Step #4: Do your research. Knowledge = money
The biggest barrier to entry for a lot of people is just feeling like they don’t know enough to get started. But there are SO many resources out there to help you start to get an understanding of the market, and exactly what property investing entails. A couple of things you might want to start researching are:
- The two main ways to make money: rental yield and capital growth
- What leverage and equity mean, and how you can use it to grow your portfolio
- All of the extra costs that come with purchasing property
- The current state of the market and how its changes impact investments
- Understanding interest rates and what it means when they change
Of course the learning is never ending, but if you’re committed and willing to grab all of the knowledge you possibly can and put it to work – you’ll have no troubles at all.
Again, this is where working with professionals can really come in handy, as they (well, WE) explain complex terms, discuss market changes with you and support you as you build your understanding of the property investment world.
Step #5: Build your A Team
Which brings us to – having the right people on your side. Rome wasn’t built in a day and it also wasn’t built alone, so don’t feel guilty for asking for help. Having the right support and guidance will actually put you AHEAD of the game, and keep you on track to achieving the wealth you so deserve!
Some people you may want to consider having on your side:
- Mortgage Broker
- Buyers Agent
- Accountant
- Property Expert
- Solicitor
At the end of the day, there’s only so much groundwork you can do. Once you’re clear on your goals, understand your financial position, have a solid long-term strategy in place, a team by your side and have armed yourself with the right knowledge –the next best thing you can do is just go for it!
Find a property that aligns, negotiate smartly and get your first property under your belt.
The hardest part is taking that first step, but once you do you’ll be unstoppable.
If you’ve got any questions, reach out and let’s chat. We’re here to help you build wealth through smart property investing, and we’re so excited to see you thrive.