Are you a first-time property investor in Australia? We know all too well that the process of investing in your first property can be intimidating, daunting, and down right difficult.
So here are our top tips to help ensure your investment is smooth sailing.
1. Education
We know, going back to school isn’t exactly on the top of your bucket list. But before diving into the property market you need to take the time to educate yourself. Understanding the fundamentals of property investment, such as market trends, potential risks, and strategies for growth, is essential to ensuring you make informed decisions and don’t end up buying a lemon.
2. Define your investment goals
At PropHero, this is one of the first steps that we take our clients through. Set clear and realistic investment goals that align with your current financial situation and objectives. Are you looking for long-term capital growth? Rental income? Both?
Having a well-defined plan will guide your property search and help you decide which investment is best for you and for your future.
3. Evaluate your financial capacity.
How do you know what you can invest in if you don’t know your financial situation and borrowing capacity? First things first, speak with a mortgage broker to find out your borrowing capacity and apply for a pre-approval if you’re serious about making moves on a property in the near future. We recommend most first-time investors to seek out advice from a financial advisor to make sure you’re on track to achieving your goals, which for most of our clients is financial well-being. Afterall, our mission at PropHero is to help our clients achieve financial well-being through property effortlessly.
4. Conduct thorough research. Then research some more.
Research and information is the key to making sure you invest in the right property, in the right location, at the right time, for the right price. Start by staying up-to-date with market trends and property news. Then start looking into different areas across the country to identify potential hotspots that will perform strongly over the long term. It depends on your investment strategy, but at PropHero we look at market dynamics, capital growth, rent growth, rental yield, supply and demand, vacancy, macro-economics, economic growth, population growth, gentrification, job vacancies, main infrastructure investments, affordability, and foreclosures just to name a few.
PropHero’s award-winning data analysis, technology, and AI tools analyse millions of data points to pinpoint areas with the highest potential for growth. We save you an average of 200 hours of research that goes into finding the perfect investment opportunity and ensure your property is low-risk and high-return.
5. Don’t buy in your own backyard (mostly).
Buying in your own backyard is one of the most common mistakes that we see most first-time investors making. We get it – it’s an area that you know well and you’re comfortable with. But buying in your own backyard isn’t necessarily the most profitable area that you could be investing in, and in turn means that you’re potentially closing the door to higher-returning investment opportunities, and leaving money on the table.
So, how do I invest in one of the best performing areas in the country? Investing hours away or interstate is daunting, especially if it’s your first time investing. PropHero helps you invest in the top 1% of areas in Australia that have the highest potential for both capital and rent growth. Plus, our seasoned property experts are on the ground in every area that we’re investing in to help you feel confident in your decision. Fun fact – about 90% of our clients are purchasing investment properties without ever seeing the property themselves because of our thorough due diligence process.
6. Be patient.
Property investing is a long-term commitment, and finding the right property for you to invest in takes time – around 200 hours on average! Be patient, stay diligent, and don’t rush into decisions. Real estate agents will often use different selling techniques to push you to purchase properties sooner than you’re ready for, so as a first-time investor, it’s important to have done your homework and know your numbers so that you don’t get pressured into purchasing above the market rate.
7. Seek professional guidance.
As a first-time property investor, seeking advice from a trusted expert can mean the difference between a property that decreases in value, and a property that outperforms the entire Australian market, making you $49,400+ in profit (unrealised capital gains) in just 12 months, just like PropHero’s investors did last year. At PropHero, our team of seasoned property experts guide you through the entire investment process, from identifying the top 1% of properties to closing the deal and getting this rented out.
Want to learn more? Book a free investment strategy session today!