Lately, I’ve had a number of people reach out to me feeling somewhat overwhelmed with all the information available out there and asking for some guidance on where to get started with property investing.
I too had little to no idea what I was doing when I first started my journey. I hope these five steps will help answer those questions.
Be clear about your goals
I’m a huge believer in goals and it’s important you are clear on what you are trying to achieve from property investing. Be specific about the financial outcomes you want to achieve from property investing and the time frame you want to achieve this. Remember, property is just a vehicle to get you to the financial position to give you the lifestyle you desire. Ask yourself, “Is it passive income or a net equity position, or is it a combination and when do you want to achieve this by?”
We’re playing with large sums of money, and buying a property will often be the biggest financial decision you will make in your lifetime. It still baffles me that some people spend more time researching a weekend getaway than they do buying a property. I use a variety of resources to ensure I’m ‘in the know’. There are some great online platforms including right here on Smart Property Investment, Australian-specific property investing books, podcasts, online forums, networking events and free seminars.
It’s in the strategy
By now you will be getting a better understanding of property fundamentals, how investing works and the types of strategies out there. Let’s take a look back at your goals. As I said earlier, it’s important to understand what financial outcomes you are trying to achieve from investing in property because this will dictate the strategy you adopt, and how passive or active you need to be. In addition, it’s important to assess your risk appetite. Some well-known strategies are buy and hold, renovation, flipping, development, and joint venture, to name a few. It might be a combination of these. However, always be clear on what outcomes you are trying to achieve.
Build your dream team
Once you’ve created what you believe is the right strategy for you, I encourage you to start speaking to some property professionals and investors. Run the strategy through with them, bounce ideas off them or simply use these conversations as your sounding board and a source of validation. This exercise will also help you build out your property dream team. The people I reach out to the most are my mortgage broker, other investors, builder/tradies, property manager, accountant, solicitor and local real estate agents. All these people serve different roles at different times.
Sharpen your ground game
There’s only so much research and analysis you can do in front of your computer screen. I’ve seen a lot of people miss out on great opportunities because they had analysis paralysis. The best way to get rid of this bug is to hit the ground and start going to property inspections. If you’re looking at buying interstate, I still encourage you to go to some local inspections in your neighbourhood. The more inspections you go to, the better you will get at sensing what a good property feels and looks like. It’s also an opportunity to network with real estate agents and to practice your information gathering and negotiation skills.
Needless to say, these aren’t black and white rules, but more of a guide if you’re a little lost and not sure where to start. Following these five steps gave me clarity on my investing direction and confidence to start putting in offers. Let me know how you go with adopting all or some these steps. Please let me know your thoughts below or reach out to me via my social media platforms. Happy hunting.
Taku Ekanayake, Millennial rentvestor