So, you’re thinking about investing in property? Maybe you’re unsure how best to get on or up the property ladder. We have been investing in property for nearly four decades collectively and, like anyone doing anything for that long, we’ve learnt a thing or two along the way!
Whenever we meet someone new, we’re invariably asked: “So, what do you do?”
To which we normally reply: “We teach people how to make bucket loads of money investing in property in Australia.”
Their next question is usually: “So, where should I be investing?”
Now this question is not a bad one; it’s just that you need to probably ask a few other questions before you get to that one. Otherwise, it’s a bit like going out to dinner and going straight for the dessert. Sure, dessert might be more exciting than the entrée and the main, but it probably won’t give you everything you need nutritionally — or fill you up!
So, what questions should you start with if you’re thinking of investing in property?
We have consistently found over time that those people who are clear as to why they are investing invariably get the best results. They are clear on their objectives and can then go on to formulate an equally clear strategy to help them achieve their desired outcome. So, you need to ask yourself: Why are you investing in the first place?
We are not talking here about reaching your financial goals but rather the major emotional rewards investing will bring, e.g. the pride that comes from knowing that you can look after your family financially; the relief and security that you will have being able to take care of yourself in retirement.
Then ask yourself:
Next, you must be clear about when you are going to start investing. There are three levels of readiness to consider when it comes to getting on the property ladder:
In fact, we know dozens of different ways that property could help you get ahead financially. We are not saying that everyone will be in a position right now to add to their portfolio. However, we would ask you to think about what you could be doing to become ready sooner.
For some investors, the right property might put extra money in their pocket each week, or it might cost as little as $20, $50 or $100 per week once the tenant and the tax man have provided their contributions to your property asset. If you are finding it difficult saving for that first deposit, then perhaps you need to go into a deposit accelerator program. Or if obtaining a loan is a challenge, then perhaps you need to undergo a financial makeover and make yourself more attractive to potential lenders.
Now that you’ve clarified your reasons for investing, and determined your readiness, you can start to focus on the how-to of investing. And at this point, there are even more questions to answer:
As with most things in life, there are many levels of property investing and how far up the property ladder you choose to climb is largely up to you.
Clearly, the skills and commitment needed to simply own one investment property are very different to those required to build a multimillion-dollar portfolio capable of producing a healthy six-figure-plus income every year.
However, in all cases, it pays to start by having a clear understanding of your why, when and how. The what and where of property investing are, of course, vitally important, but we will have to leave them for another time!