Many successful property investors often advise the younger generation to start investing early on in their lives to be able to make the most out of the assets they could acquire throughout their journey, but for those beginning a new venture, starting a property investment journey entails some good and diligent preparations.
According to buyer's agent Paul Glossop, young prospective investors must be clear on their goals before starting their property investment journey.
"A lot of people get caught in that trap—just because there's a little carrot dangled, they think all of a sudden, it's a licence to print money. Instead of paying rent, they're going to pay a mortgage, but if that property doesn't increase for five years, then you effectively probably would have been better off renting or chucking your money into an investment that's going to work harder for you," Paul explained.
"So, oils ain't oils, and do some research rather than just thinking, 'Because there's a grant, that's going to be twenty grand in my pocket rather than someone else's and all of a sudden I'm gonna make money out of it.'"
Smart Property Investment's Phil Tarrant reminds these young people looking into entering the business of creating wealth through property to be careful about where they put their money into. After all, investing in property does come at a price—which could be very steep at times. However, according to him, there's no harm in starting small and building your property portfolio from a modest first purchase.
"Just because you can get a First Home Buyer's Grant in Queensland doesn't necessarily mean that that's the best place for you to buy. [If] you've only saved a small amount[,] ... can you actually afford to live where you want to buy, in Queensland?" Phil said.
"You know there's a lot to be said about renting where you want to live and buying where it makes the most sense for you.
"You can get into property markets, good property markets... for, maybe, a lot cheaper, so you can be [still] in the game. You can realise the benefit of being a property investor and holding property long term [without putting] a lot of strain on yourself... If you need that First Home Buyer's Grant in order to have enough money to buy a property, maybe it's not the right time for you to be doing that."
Finally, as much as a lot of property investors are telling everyone to start young, both Paul and Phil agreed that it is more than acceptable to sit on your hands for a while and prepare yourself better through good education—both theoretical and practical—and the right mentorship before actually beginning your journey.
"You're probably early on in your career and your salary's probably gonna go up so you might want some flexibility in life... It's good that you're thinking about getting into property... [Just] come back to: What is the purpose in investing in property? Very, very simple, [but] that's not always next door," Phil said.
"You need to do the groundwork to be successful in property. You need to be on the road, you need to be out there looking at places. If you don't want to do it, you can use a buyer's agent, but you need to do everything you possibly can to try to understand what you're trying to achieve in property and where the properties are best suited to meet the objectives you have in terms of investing in property," Phil concluded.
Tune in to The Smart Property Investment Show's Q&A session with Paul Glossop to know more about mortgage lenders, the ins and outs of first home owners' grants, accountancy, and money management platforms, and how you can better prepare yourself at tax time.