People looking at buying their first investment property often tell me they are concerned it will limit their financial freedom. Nothing could be further from the truth: property investment is a ticket to freedom and one way to ensure you’re financially set up for a comfortable retirement. The current market presents ideal conditions for investors, and starting to steadily build up a portfolio gives you a dependable asset and a fantastic, flexible lifestyle; something we’re all searching for.
Property is, in my opinion, the best way to achieve real wealth and to ensure you’re well set up for your later years. It’s solid and relatively easy to understand and is fully supported by a stable government and banking system. This is why you won’t see property owners panicking like shareholders might when the market takes a turn for the worse. Property can also be self-funded and provides a passive income, rather than business owners who start their own business to escape from a job, but often end up working twice as hard and only benefit when they sell.
A careful property investment strategy will, overtime, start to provide you with long term rewards and the freedom to focus on doing the things you love with the people that matter most or take some well-deserved time off to travel; all the while knowing you are backed by a bricks-and-mortar asset. Unlike you, your property portfolio is working 24 hours a day, seven days a week to constantly expand your wealth. It took me nine years to gain financial freedom through property investing, by focusing on buying well and steadily building up my portfolio. Once you have one appreciating asset you can build up equity which you use to purchase your next property, without having to fund it from your wages. And that’s when the financial benefits allow for a change of lifestyle and, ultimately create freedom.
I believe property is the best possible investment; however the key to getting rewards is to buy well. In over two decades of investing in residential property I have come to believe that “bargain property” is an oxymoron. Everyone wants a bargain, but often bargains are a false economy. The majority of ‘bargains’ are less desirable properties in less desirable locations that aren’t in any great demand. Rather than focussing on finding a cheap deal, you need to know what do to at an auction, or better still before the auction, to ensure you buy your dream home or investment property. Auction day is always very stressful, especially if you have already set your heart on buying. And to make things harder, better homes in better suburbs often sell before auction. So how can you guarantee that you’ll secure that perfect property?
Firstly, you need a clear picture of what you are looking for; a defined plan means that you are more likely to find what you want. If you have too many options, you might never make a decision. Once you’ve found your property, a building inspection is imperative to ensure that there are no hidden problems you will have to repair down the track. You also need a strata inspection when buying a unit and pest inspection when buying a house. These give you a clear idea of any works that you need to add to your budget. It is also vital that you get pre-approved for finance to avoid the frustration of spending months looking for the perfect property, only to have your mortgage application knocked back. If you get pre-approved for finance and tell your bank or mortgage broker the type of property you want to buy, there should be no surprises down the track.
Many in-experienced buyers make emotional decisions when they find their dream property which is why it’s important to really do your research, and learn a few tricks of the trade to ensure you’re putting your money towards a solid investment. As a professional buyer, I have been buying similar property in the same suburbs for over 10 years and even though I have a good idea of what a property may be worth, I still pay an independent valuer every time I bid. It also helps to get friendly with several property agents as they’re the first to be aware of properties for sale. The better you know them, the more likely you will hear about silent sales, as agents often take a property to their closest contacts before the general public. And finally, I strongly encourage you to use a professional buyer. Successful property buyers will look at around 100 properties in the area they are interested in, as well as conduct secondary research, before making a decision. If you’re busy, it can be hard to dedicate the time to buying a property. Professionals make the process easier and can help secure a better deal.
So what would a professional buyer recommend? Firstly, rather than trying for undervalued suburbs which may or may not grow, research the market and choose areas that always attract good tenant demand and have scarcity of stock. Property investment professionals always give good ratings to inner urban suburbs such as Melbourne’s – Albert Park, Middle Park, St Kilda, Elwood, Elsternwick, Prahran, South Yarra, Armadale, Hawthorn and Sydney’s eastern beaches from Maroubra to Bondi Beach, their inner west suburbs such as Leichhardt, Annandale and Balmain and north shore harbour side suburbs including Neutral Bay, Kirribilli and Cremorne.
When done right property truly can be your ticket to freedom, and can lead you into a fun, flexible and exciting retirement. So do some research into the current market and then when you’re done, do some more! When you feel confident about your property investment choices, and with the help of professionals go ahead and buy your dream home or investment property, watch its value continue rise and just sit back, relax, and enjoy life!