Property could be regarded as one of the best places for new investors to start. After all, housing is something that everyone needs, plus if you choose your property development site cleverly you can essentially obtain it for less than if you’d purchased the already completed unit.
If you’re wondering how to start investing in property, here are 6 tips for starting out in property investment!
1. Get smart about investing in property
Become a sponge that absorbs everything you can find about investment properties, specific to Perth. Identify quality information sources (AKA avoid those spruiking ‘get rich quick schemes!’), talk to family and friends who are investing or developing in property, pick up property investment magazines and even make an appointment with your accountant or financial planner to get your head around key property development elements such as negative and positive gearing and depreciation. Look into the types of property investment too, such as investment homes with turnkey packages (Perth) and units or apartments.
2. The importance of an investment property finance strategy (Perth)
Crunching the numbers to create a solid property development finance strategy is the foundation of any successful property investor. Add up your personal daily living costs and the costs of keeping the investment property/s for a long time (mortgage repayments, rates, insurance, etc.). Make sure you can accommodate all these costs comfortably against your income and incoming rental returns. (We’ll explore the financial side further in Part 2 of this First Time Investor Series.)
3. Do you know your future tenants?
The smartest investors for property development are those that know their future tenants back to front and develop property accordingly. Is the area full of young families wanting room to grow? Or are you catering to busy professionals who want a stylish townhouse and minimal maintenance (potentially via a backyard subdivision)? A busy playgroup over the road and cafes overflowing with prams might give you an idea as to who is in the area! Know the amenities of the area well too – a ‘promised’ school and train station might not eventuate, so be wary of investing on the back of possibilities that aren’t set in stone!
4. Is the block suitable for investing in property?
Get to know about R-Codes and other council regulations in your chosen area/s of development. Do they permit the unit or apartment development you are planning? Why is the block for sale in the first place? Did they try to develop it themselves but hit too many brick walls? Maybe the existing home is heritage-listed? It’s best to ask the hard questions so you go into property development with your eyes wide open.
5. Don’t rush!
Rather than focusing on quick profits, focus on doing things well to maximise your long-term gains. Rushing means you could skip vital steps, overlook important details and essentially put unnecessary stress on yourself to achieve in two years what your parents achieved in ten!
6. Partner with Summit Projects
Starting out in property investment can create more questions than answers. At Summit Projects, we will help you become an investment property development expert, explaining all those fundamental terms such as ‘backyard subdivision’ and ‘fully completed turnkey homes’.
We can even help plan your investment property finance strategy!
To find out more about our property investment experience and fully completed turnkey homes, contact our team at Summit Projects today!
Disclaimer: The information within this article is general information only and it does not constitute advice or recommendation. It does not take into account your financial situation, investment objectives or personal circumstances. Before making a decision about developing your property, you should seek independent financial, legal and taxation advice.