In our experience at Infinite Wealth, there are so many potential property investors out there amongst all of the successful ones, but more and more often people get so overwhelmed by the process that they quit before they have even begun.
Considering the popularity in Australia for property investment, isn’t it surprising that less than 6% of Australians actually own an investment property? Have you ever wondered what separates you as a budding investor from those already in the industry? Here we take a look at the strategy behind becoming a property investor to help try and answer this question.
Know what you want to achieve
At Infinite Wealth we have found an interesting distinction between successful property investors and those not faring as well in the industry- successful property investors know what they want to achieve. Goals can vary, some investors want to get started in the property market with the goal of creating an extensive portfolio while others want a way to fund their retirement in their future years.
You may be asking yourself if setting goals really are that important when it comes to property investment and the answer is yes. One of the most important things that goals provide is a sense of direction. They make it much easier for you to budget and direct your financial resources when you have something that you want to achieve in mind.
Also, without first establishing goals for why you want to get started with property investment, it will be difficult for you to decide what type of property to purchase and where. For example, your goal may be to invest in a property so that in the future you can pass it down to your children. If this is your goal, you will be looking for properties where the income it generates is sufficient to cover its running costs. This will lead you to look in locations that have identifiable capital growth drivers and so forth.
Know your financial capacity
This point may seem obvious but you wouldn’t believe the amount of property investors who jump into the market without a realistic outlook of their financial capacity. We cannot stress this point enough, property investors cannot start searching for properties until they can pinpoint exactly how much they can borrow and how much they can afford to pay for an investment property. You will only waste your own time and resources looking for investments in areas where the average house costs $700,000 if you can realistically only afford half of that amount.
Extract emotion from the equation
Successful property investors will know that there is no room for emotional involvement when it comes to making a purchase decision and this is what often separates the most successful investors from the rest of the herd. A lot of budding investors base their decision to buy a particular property on factors such as whether it meets their idea of what a property should be, whether it will impress their friends or acquaintances or whether the property is their favourite colour or not. These are all emotional questions that can lead to purchasing the wrong type of investment. The right type of questions you should be asking yourself are what are my goals? Does this property generate an income or will it cost me money? Is their growth projected for this area?
Want to live the life you really want? The team at Infinite Wealth can provide the education, direction and on-going support you need to reach your property investment goals. Get in touch with us today on 08 9438 6333 or click here to contact us.
The information provided is of a general nature and is not intended to be constituted as financial advice. We recommend that you seek independent advice from qualified professionals before employing any strategies outlined.