09 Jul What is the right age to start investing in property?
As experienced property strategists, one of the questions we are most commonly asked is, “When should we start investing in property?”
The answer is always the same — as soon as you possibly can!
This is particularly the case for young people, as the sooner you can start on your investment journey, the more comfortable the future you are potentially creating for yourself.
Below we explore some of the most common issues that young people face when they are looking to get into the property market, and offer some specialist advice to help you get started on the way to successfully investing in property.
Getting together a deposit to start investing in property
The most common problem that people face when trying to buy property in Australia is being able to save for a deposit.
Although it can be challenging, there are clear practical steps that you can take to save the crucial funds you need.
The first step is to analyse your expenditure, so that you are better able to control it. A budget is crucial to this, as in order to create a budget you need to have a clear understanding of how much money is coming in and going out each month.
A key part of this is determining what might be called fixed expenses, i.e., money that you spend each and every month, rather than incidental or discretionary spending. These might include entertainment subscription services, mobile phone bills, gym membership, etc.
Although individually, none of these amounts may be huge, cumulatively and over the course of a year they can add up, so if you are really serious about saving for a deposit, you need to review these sorts of outgoings and ask yourself how essential they genuinely are. You might also talk to your phone or broadband provider and see if there are cheaper options or better plans available.
You should then extend this review of your finances to non-discretionary spending, i.e., the money that you have to spend each month on rent, food, utilities, etc. Are there any areas here where you can cut some costs and improve your budget bottom line? This can be crucial for freeing up funds so that you can save more going forward.
This could even extend to reviewing your employment position. When did you last get a pay increase? Are you in line for a rise in wages? Could moving job mean that you have more money coming every month? The amount you earn is of course essential, so when you are attempting to save for a deposit, you need to ensure you are maximising your income as far as possible.
A further priority when reviewing your finances is to pay off high interest debt (such as car loans and credit cards) as quickly as possible. This is because these sorts of debts significantly decrease your borrowing capacity, while at the same time servicing them impacts on your ability to save, so getting rid of them is very beneficial.
Why you should start investing in property as soon as possible
While we all have a general understanding of the value of owning property, it is useful to clarify the benefits you accrue when you start to develop and grow a property portfolio.
Firstly, you are creating a significantly more stable future for yourself. You have both assets to your name and a potential passive income coming in, and you have the opportunity of reaping the benefits of these over a longer period of time when you start investing early.
Ultimately, having property investments to your name means that you have a degree of financial comfort, and are able to live more freely and without the stress that comes when you are constantly in debt and can see no way out.
Therefore, having a clear and coherent property investment strategy will go a long way to ensuring that you have greater financial security throughout your life, are able to pass on valuable assets to your children, and you will be better placed to enjoy a more comfortable retirement with greater freedom to live your life as you choose.
The longer you invest, the greater the rewards
One of the keys to successful property investment is the time you spend in the market. In simple terms, the longer you hold an investment property the more it will be worth over time.
In addition, the earlier you begin investing in property, the more time and opportunity you have to grow and diversify a portfolio containing multiple properties.
Get advice from professional property strategists
For many younger property investors, one of the main barriers to entering the market is a lack of confidence and knowledge. Seeking advice from property strategists about how, where and when to invest in property in Australia can mean you are far better informed about what is required, and better placed to make positive investment decisions.
Working with an experienced property strategist can also help young investors to develop clear and attainable goals, along with complementary strategies to achieve them. An experienced investment strategist will also connect you with a range of other industry professionals, such as brokers and accountants, who can support you on your investment journey.
Likewise, property strategists have access to developments, properties and markets that are often not open or available to the regular investor, and so when you work with a property professional you have a greater range of investment opportunities open to you than if you are trying to break into the market on your own.
Look at all the loan options
A property investment strategist can also help you to explore the variety of different financing options that may be open to you. Working with a strategist and an experienced mortgage broker can help you to find a competitive investment loan on terms that best suit your goals and circumstances, while also advising you on the documentation you need in order to make the process as quick and straightforward as possible.
Power of Property can help you start investing in property
As experienced property strategists, we have extensive knowledge and understanding of what it takes to become a successful property investor.
Regardless of your age, we can help you begin the journey to financial security through investing in property, in conjunction with a highly qualified team of specialists to ensure that you always get the best possible professional advice.
To find out more about how to ensure you get the best possible value from your investment property, call Michael Lawton on 0407 785 560 or Danielle Charlton on 0411 268 795, or book an online property strategy session today.