How to invest in property like a professional
Ready to step onto the lucrative property ladder?
Property is a popular investment choice for good reason. Not only can you touch and feel the asset it is easy to research, but it can be less volatile than other investment options like the stock market or a business you have little or no experience in.
With WA’s vacancy rate hovering around 1%, the lowest levels since March 2007, now is the time to invest. “With the fundamentals in place for making great investments in WA, BBQ conversation has returned to property, finally!” says our CEO Andrew Graham. “WA has it all - solid business competence, record low-interest rates, low unemployment, rising rents, solid mining, and job prospects. Now is the time!”
With the state’s property market seeing solid momentum and performance, now is the time to seriously consider investing. Ready to hit the weekends home opens? Arm yourself with the following tips and criteria and choose your perfect property like a pro.
Do your homework
Unlike buying a forever home, investing in property is driven to create wealth. Begin the process by identifying exactly what type of wealth you want to build – a second income stream, equity and cash, or high capital growth? Pinpointing your key drivers will inform your choice of investment strategy that will help you meet your goals.
Consult a reputable mortgage broker who will assist you in finding the right home loan to best fit your needs and financial situation. After assessing your current financial conditions and determining exactly what you can afford, your mortgage broker will do all the legwork for you. Navigating and comparing home loans across multiple providers, they will also guide you through the lengthy application process and help you secure your loan.
Understanding the costs involved in buying and maintaining a property can be confusing and result in poor cash flow management. It’s important to know you have enough money to cover all your investment costs without struggling to cover your general living expenses. Speak to a reliable Property Management company with a good knowledge of real estate investment. They will provide you with a thorough understanding of your rental returns and where the levels of tenant demand are.
Timing is everything
Timing is really important. Because property is for the long term, it’s important to keep on top of the market’s ever-changing movements and dynamics. While there are always investment opportunities available, some market conditions are more favourable than others. Buying at the right time is key to achieving long-term profitability of your investment.
Determining the perfect location is critical in finding a property that will work towards maximising your return. “It’s important to really get to know the area you are looking at investing in, and researching how the market there has behaved historically,” says Andrew. “What is the local demographic, and will it produce the capital gains and returns you desire? How far is it from the CBD or area that provides job growth? Are there shops, local amenities, and public transport nearby? What school zone is it in? Is there any future zoning or development in the surrounding area that will enhance or gentrify the neighbourhood in the long term. These are all vital questions to be asked and answered before committing to a location.”
If you already have your own property, it might be practical to purchase an investment nearby. Or perhaps through your research, you can identify better growth opportunities in another suburb or even interstate. Be open-minded and consider all locations before making your decision. Walk around the neighbourhood get a feel for it.
It takes a village
A property investment requires many areas of specialised expertise, from finance and legal to real estate and building. Gathering a great team to support you through the process takes the stress out of decision making and ensures you have all bases properly covered.
Recruit your dream team that includes the following experts -
- Mortgage broker
- Real estate agents
- Property Management Expert
- Settlement Agent / Conveyancer
- Handyman or builder
“Look for a property you would like to rent yourself,” advises Andrew. “It’s also important to consider your demographic and find a property that will be appealing to them. For example, if your focus is young families look for a home with a second bathroom, separate laundry or a back garden.” Seek out properties that offer something unique, like rear north facing living areasor potential zoning changes in the future. If it draws you through the front door, chances are others will find it appealing too.
Ready to hit go? RMA wishes you all the best in securing your first investment in Western Australia, and taking that first step in building your wealth through property.
Call us. We are always here to independently help.