11 Oct How to Become a Successful First-Time Investor
There are a number of challenges to becoming a successful property investor, particularly if you are entering the market for the first time.
At Power of Property, we specialise in devising and delivering strategies that help investors at all stages of their property journey, especially first-time investors, and we work closely with our clients to help them navigate the Australian property market with greater confidence and peace of mind.
Following are our tips for first-time property investors who are looking for capital growth, rental income and, most importantly, long-term financial independence.
The best time for first-time investors to start is now
We often hear from first-time investors that they are waiting for the perfect time to enter the market. Whether it’s holding out for a pay rise, a drop in interest rates, or just waiting to see the direction of the economy, they are essentially letting circumstances that are beyond their control put them off getting into property.
However, our long experience as property strategists has demonstrated time and time again that time in the market is more important that when you enter it.
We consistently advise first-time investors that the sooner they begin, the more opportunities they have for capital growth and equity gains. The best time to enter the property market is always as soon as you possibly can.
Understanding your financial capacity
Before you can start seriously considering buying a property, you have to have a clear understanding of your medium- and long-term investment goals, as well as your current borrowing capacity. It’s also important to know as much as you can about potential lenders, the loan types that might be open to you, and how repayments can be structured.
As part of our property advisory service, we work in partnership with experienced mortgage brokers and associated professionals to devise financial strategies tailored to your personal circumstances and goals.
Getting high quality, professional advice at every stage of the property journey means first-time investors can be confident that their tax position has been optimised and that they are better placed to access equity for additional purchases in the future.
Become a first-time investor, not a property owner
When you’re looking for an investment property, you need to apply different criteria to your search than you would when looking for a place to live for yourself.
Your should not be looking at investment properties through the lens of whether or not you would choose to live there; there are a range of more important factors that are more relevant to investment and that you need to take into account.
For example, you need to look at whether any potential investment property is in a high-demand rental area, and whether it can provide a favourable rental yield. Historical data also needs to factored in, such as whether there has been capital growth, low vacancy rates and consistent tenant demand over a number years. You also need to look forward, and consider the property’s potential for future capital growth.
At Power of Property we take this sort of data-led approach to buying property, and we support first-time investors so that they are equipped to purchase property strategically, rather than being guides by emotion or sentiment.
Take the time to learn
In our experience, the most successful investors are those who make it their business to better understand property market data, find ways to access to the most favourable finance, and are able to use their equity to the best advantage.
We are committed to supporting first-time investors and providing all the training, guidance and resources required to develop greater financial literacy. Our goal is always to empower our clients so that they can make informed investment decisions based on data and which align with their goals and strategies.
Property is not a passive investment
One of the most important lessons that first-time investors need to learn is that a property portfolio (even if it only consists of a single property) is not a passive investment. Being a successful property investor means regularly reviewing the performance of your asset(s) to ensure that it continues to meet your goals and expectations.
There are a number of economic and societal factors that can impact on the performance and returns of an investment property, such as changes in the rental market or interest rates, so keeping on type of portfolio performance is essential.
At Power of Property, we provide ongoing support for first-time investors and conduct regular portfolio reviews and cash flow assessments, in order to help you to plan for future purchases. in this way, you can be confident that all of your investment decisions are based on data and you can be responsive to changes in market and economic conditions.
Take the first step towards investing in your future
Michael Lawton and Danielle Charlton at Power of Property have many years’ experience in all aspects of property, especially helping first-time investors to make their first forays into the market.
We can help you to build your wealth through making smart, data-driven property investment decisions, and our personalised approach means you can feel confident that you have all the information, support and access to professional advice you need to succeed in the ever-changing world of Australian property.
Call Power of Property on 0407 785 560 or use the online booking form to arrange a free, no obligation strategy session.