Our golden rules for investors
When it comes to property investment, how you start is the key to a secure future. There are some common mistakes to avoid if you want a successful experience.
Don’t get into too much debt
Over-borrowing happens when people max out their borrowing capacity without considering what they can afford.
Let’s say Mr H is considering property investment. He goes to the bank, the bank tells him, ‘you can borrow $600,000’. So Mr H searches for a property at that price. But, the bank is telling Mr H how much he could borrow, not how much he should borrow.
It’s a problem we see over and over again. The most distressed investors are the ones who have over-borrowed or have got the wrong information.
Avoid getting into too much debt and you’ll future-proof your investment against unforeseen circumstances. If your interest rates go up, or if your property isn’t tenanted for a full 52 weeks of the year, you can afford it.
Seek investment advice
A bank will tell you your maximum limits, and a mortgage broker will tell you your monthly repayments. But, they won’t give you a whole view of your finances – from rental income to tax reductions.
How much could you charge in rent? What happens if the market changes? Are you secure for the future?
It’s important to get this advice before you invest. You need to know exactly how much maintaining your investment property will cost you per week, and how this stacks up to your current finances. Only then can you decide if it’s the right step for you.
Don’t look at properties… yet
Many people decide they want to invest, then get straight onto their property search. Often, they will look in their local area, where they’re familiar.
This isn’t always the right approach. If your property is for investment only, you should be looking to buy in a suburb that will see the biggest return in your investment. Do your research and get a free suburb report for your area of interest to make sure you’re buying in the right place.
But remember – it’s important for you to first understand your borrowing capacity. Then, get the right advice about where you should buy.
Get personalised insights
There’s plenty of information out there, but every situation is unique. Investment advice tailored to your circumstances is a valuable tool in your research.
Reventon offers personalised property investment advice to explore your current financial situation, identify how much is safe for you to borrow, and where you should be looking to buy. You’ll leave with a full plan and practical recommendations tailored to you. It’s yours to keep, it’s free, and you won’t be obliged to take up any of our services.
Take the first step towards property investment with a free consultation from one of Reventon’s experts.