For seasoned experts, the basic nuts and bolts of property investors come as second nature. But if you're only embarking on a first time property investment, you're not likely to be as familiar with the basics of the process.
Allow us to provide you with a brief overview of some basic knowledge no Australian property investor should be without.
Strategy is the lifeblood of your investment
No one invests in a vacuum. If you're starting a property investment portfolio, it's probably because you have an end goal in mind, whether it's improving your current lifestyle with a source of passive income or having enough to comfortably live on when you retire.
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From here, you've got to evaluate your financial position and square it up with your goal. This involves some hard questions, such as: When do I plan to retire? Where am I right now, financially? What timeframe am I working with? A good understanding of your financial situation will let you know what kind of strategy and portfolio size you should take on.
Capital and rental growth
Key to achieving your goals are the concepts of capital and rental growth. As far as the latter is concerned, you ideally want a cash flow positive property, where the amount of rent you receive is greater than the property's other expenses. You can put this extra income toward an improved lifestyle, or use it to save for retirement.
As for capital growth, this simply refers to the gradual increase in your home's value over time. Unlike other types of investment, property requires time and patience to see huge increases in value. If you hold on to and successfully maintain your property over the long term, you're more likely to come away with a handsome profit at the end of it.
Be sure to get in touch with a team of property investment professionals to help you in this goal. Direct Property Network, for example, can come up with a tailored Property Investment Plan for you, as well as do the groundwork in helping you figure out where to invest and even assist you in securing financing.
This information is provided by DPN Pty Ltd ABN: 94 630 700 186, Australian Credit Licence 514759. DPN Finance Pty Ltd is an authorised credit representative 504129 and a related entity of DPN Pty Ltd. Casa Capace Operations Pty Ltd ABN: 79 624 981 184, NDIS provider Number 4050038018 trading as Casa Capace.