Top 5 Property Investment Tips

In the aftermath of the global financial crisis, many investors adopted a ‘mark time’ strategy, and withdrew from the investment sector. Property investing also fell during the initial 18 months of the crisis and we are only now witnessing a return to the property market. However during this time, property investors with a disciplined methodology were able to purchase great properties at the lowest rates in 45 years. They were able to afford 2 properties at the same cost as one 18 months prior and locked up their loans via fixed rates for 5 years.

Whilst there is no doubting the generous returns that investors can experience through property investment, the global financial crisis has been a timely reminder for many investors of the need for professional advice and assistance, especially when times get tough. However those with a proven approach like the famous investor, Warren Buffet, who was actually investing during the crisis would strengthen their position in due course. Using his mantra of ‘be fearful when everyone else is greedy and greedy when everyone is fearful’ Buffet invested, whilst many were paralyzed with fear.

Some property investors began to panic as property prices stalled and some began to struggle maintaining repayments on investment loans. Other savvy investors however who had planned their strategies well and had taken professional advice at the beginning of their investment plan were able to sleep comfortably at night knowing that their plans were still on track.

In this article we are going to cover five tips that apply to any property investment strategy will include things like how to get the best investment loan, why proper research is imperative, how to create a checklist of essential needs and why property is such a successful wealth creation vehicle.

At the outset, it is important to recognise that generalist media opinions about investment strategies are not necessarily the best source of information for a savvy investor. Whilst journalists are happy to rely upon general statements, every successful investor knows that specifically tailored plans are the only reliable method upon which an investment plan can be based. Investors also need to take a broader view of the market than local journalist articles would otherwise have you believe. Reading limited information about local area or general advice about a state is insufficient when it comes to research and that is why independent advice and research are imperative.
The aim of investment property research is to identify growth and emerging suburbs within cities that are affordable and target properties with a larger land component. For example, buying a house and land package in Brisbane in a growth suburb based on specific research is better than buying any unit in Sydney even though a journalist may choose to state that Sydney will outdo Brisbane. The reality is no person will be buying a whole city, so suburb comparison is far more precise. If you are only able to afford $450,000 then a comparison of what you could buy in Sydney, probably an older unit further out from the city, compared to a house and land package in Brisbane’s middle ring suburbs is the value decision you need to consider. The decision to be based on a commercial basis and not on a emotional whim, or idea of where you may want to live yourself. As an investment property, you need to be return driven. If it is a home, that is a different story.
Every element of buying an investment property portfolio needs to be hand in glove with every other aspect of the strategy. After you have chosen a suitable property for example, it is important to look at the taxation position that applies to your income and family circumstances and then choose the appropriate financing vehicle that will suit your purposes.
You should always make sure that your finance is flexible enough to cater for not just your current purchase but also any planned future purchases as your strategy unfolds. Lines of credit may have more advantages over term loans and interest only packages. Whilst obtaining the cheapest finance is one important aspect, you still need to look at all options to ensure your strategy is not compromised further down the track.
Using a property specialist is a prudent way to plan your strategy. In the same way that you leave your tax problems in the hand of an experienced accountant, your property accumulation strategy needs to be planned in overall context and having all professional resources under one roof can be a big advantage.

These five simple tips can really set you up on the path to acquiring a fruitful property investment portfolio.

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