It’s often assumed that investment properties are for those that have their life in order – they’re older, have a home of their own, finished having kids and are financially secure; but a lot of the time, the opposite is true.
Property is a great long-term investment and one of the safest options when you’re considering building your own nest egg. With a bit of homework and the right advice, you can purchase a property that suits a certain budget, has a good return and will require little maintenance.
With hundreds of properties under my belt in my career as a Buyer’s Agent, I have learnt that there’s a strong real estate investment option out there for almost any situation, you just have to be willing to look.
Start Small
I’m often surprised by the amount of people I meet who tell me of their intention to purchase an entire development site or complex series of residences, only to find out that they’ve never previously owned a property. Consider property like buying a pair of heels. If you’ve never worn anything but sneakers before, you wouldn’t jump straight in and purchase a pair of 11-inch Jimmy Choos, you would test the waters with smaller and cheaper alternatives until you’re sure that you’ll be able to actually wear them (so I’ve heard…).
This is the same with property. Start small and keep it simple. This allows you to understand how a contract is put together, get familiar with the real estate and ownership terms, and take the time you need to build some relationships with providers and contractors. You may have dreams to build an empire, but you don’t need to do it by lunchtime tomorrow. As they say, a fool and his money are easily parted.
Have a Single Goal
There are so many strategies for making money in property that it’s literally been made into an industry; from buy and hold, options, renovate and flip, to development deals, the list goes on. The sheer number of choices can be enough to make your head spin and for first time investors who are keen to get involved, it can be overwhelming.
The truth is, if you do them well, all of these strategies will yield great results. The key is to pick one and run with it. Focus all your efforts on becoming an expert in that area and the amount of knowledge required suddenly goes from being very wide to very deep. This is where the real wealth is found, as you will soon uncover opportunities that others will have missed because they haven’t grasped the detail.
Never Settle For Second Best
In the beginning, your portfolio will be made up of key properties that perform well over time, not hundreds of small value assets, so you need to be sure that your purchases are getting you the best return possible. There is no settling for second-best if you intend on spending the next decade or two focusing constantly on their performance, because second-best won’t get you winning results. Buy well, be selective and never purchase out of FOMO (fear of missing out). These are the tools that will build your future quality of life, so choose wisely.
You Have to Spend to Make
A big mistake first-time investors make is in assuming that once they purchase, they won’t have to spend a cent on their new property. In order for you to maximise your return, it’s likely that you’ll need to give your new home some TLC, whether it’s in the form of some small improvements or a full-scale renovation. This extra love is on top of the ordinary ongoing costs, such as rates, strata and utilities. Don’t get caught up in the ‘how much is this going to cost me’ frame of mind, instead try and look at property as a long term investment that will have a few unexpected costs along the way, but will ultimately reward you with a profitable return.
The most important aspect of jumping into the property market is to surround yourself with a team of experts that you feel comfortable with and equip yourself with enough tools that you’ll feel confident when talking to agents. It may seem daunting, but property is a safe and more accessible option than you think – and the return on investment is fantastic!
About Josh Masters
With more than 15 years’ experience in the industry and hundreds of property purchases under his belt, Josh Masters is one of Australia’s most respected Buyer’s Agents. He is author of new book and investment guide, Why Property Why Now – learn more at www.joshmasters.com.au
Written by expert Buyer’s Agent and, author of Why Property Why Now, Josh Masters.
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