8 Steps to Getting Started in Property Investment

You’ve read the books, magazine articles and reports. And you’ve been religiously checking real estate websites for properties. But when push comes to shove, you never follow through.

Don’t worry, you’re not alone. In fact, despite real estate being a national pastime, only 8.4% of Australians, or roughly 2.1 million people, own an investment property, according to the Australian Tax Office.

But the reality is property investing isn’t as difficult as it’s made out to be.

And so, here are eight steps to invest in your first property.

Don’t rule out property investment until you’ve done the numbers.

1. Check your finances

This can be as simple as calculating your expenses and offsetting them against your total income and assets.

This will give you an idea of how much money you have to invest.

Don’t immediately assume you can’t afford to buy an investment property. As long as you have a stable, reasonably well-paying job and have a fairly long history of employment, you shouldn’t have a problem getting a loan.

2. Get pre-approval

Pre-approval is a formal indication from a lender that they will lend you a certain amount of money.

You can get pre-approval directly from your lender or through a trusted mortgage broker. Going through a broker before applying for pre-approval is a good idea if you’re unsure you can afford to invest.

While neither you nor the lender is obliged to follow through with the pre-approved home loan, applying for multiple pre-approvals is unwise. Each time you apply, the lender checks your credit record. Finding multiple inquiries when they conduct their checks signals a red flag and increases the likelihood that they will refuse your application.

Top tips

Find out if you qualify for a loan
Check your credit rating
Consider reducing your debit or credit card limit

3. Set your goals

What are you looking to achieve? What does success look like to you?

In order to achieve your goals, you must first articulate what they are. More importantly, you need to set yourself deadlines. This allows you to create a plan, by providing an end date to aim towards.

For example, if you’re looking to replace your income and retire on your investments within 10 years, start by creating a 10-year plan. Then break down your long-term goal into weekly, monthly, and yearly goals.

Not only does this provide you with a clear plan of action, it makes your goals more manageable, preventing you from being overwhelmed by the enormity of the task.

4. Understand your attitude to risk

What sort of risk can you tolerate?

Your attitude to risk should inform your strategy.

5. Start budgeting

It’s not sexy. It’s not even remotely interesting. But budgeting is the only way to ensure you’re able to balance your income and expenses. It allows you to understand how you spend your money and helps you to plan for bigger expenses down the line.

With great budgeting tools such as this planner and this spreadsheet tool, there really is no reason for you not to set up a budget.

Make sure to set this up even before you start looking for a property.

6. Create a purchase plan

What does an ideal purchase plan look like?

It should help you reach a point where your portfolio’s producing your target growth or income. And it should serve as a structure to help you stay in the game.

Here’s an example of a purchase plan you can follow:

Define your strategy
Set up your criteria
Do your research
- Choose a property from your shortlist
- Get appraisal
- Do your due diligence
- Make an offer and negotiate

7. Be informed

Use the tools available to make an informed decision and keep abreast of property market trends; understanding the market will be crucial to making the right investment choice.

8. Stay focused

Property investment should be driven by the numbers, not emotions. Make sure you stay focused on your end goal by

painting a clear picture of what you want to achieve,
setting deadlines for your goals,
breaking down your long-term goal into short-term goals
It’s easy to get overwhelmed when you’re venturing into something as fraught as property investment.

But don’t give up on your dreams. Tell yourself: if I buy the right properties today, in ten years I’ll be leaning back with my feet up and a cocktail in hand, celebrating the fact that I bought properties that more than doubled in value, while my peers sit around cursing their decision not to follow me down the road of investment.

Ready to sell or invest?

At Empower Estate agents, We provide a great experience, outstanding marketing & the best negotiations tactics to help our clients to achieve their property goals. One of our best real estate agents in South Western Sydney Sana Ullah, a well-experienced, trusted and reputed real estate agent in Sydney with his excellent marketing skills.

We believe, Buying or Selling a home is one of the biggest financial decisions of your life. That’s why finding a real estate agent with the experience to guide you through the process is key. Our extensive southwest western Sydney real estate market research and strategies will help you to sell your property at the highest value.

Disclaimers: Data provided in this article is of a general nature and should not be construed as specific advice or relied upon in lieu of appropriate professional advice.

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