Investing in property may be desirable, but is it possible? You might be surprised at how many regular Australians are able to secure cash-flow positive properties and start growing their wealth.
You'll need a smart investment strategy to make sure your goals are realised, but planning certainly pays off. Here's a guide that will help you work out if property investment is possible for you.
Establish your goals
Investing in real estate may be appropriate if you want to build up your equity in an appreciating asset.
Stocks can fluctuate drastically, and while they're appropriate for some, they're certainly not for everyone.
Property, on the other hand, is a very understandable investment. You can still hand over the day-to-day responsibilities of your investment to a property manager, but you may find that investing in a tangible asset is a favourable option for your situation.
Evaluate your finances
When you buy your first home, you need to come up with a deposit. In Australia, this can be anywhere from five to 20 per cent - or more - depending on how lenient your lender is. If your deposit is less than 20 per cent, you'll need to obtain Lenders Mortgage Insurance.
It can be daunting to save up for a home deposit. But it's a different ballpark when it comes to investing in real estate.
That's because you can leverage your existing equity to secure a rental property. Plus, you can even take out an interest-only home loan, which lowers your repayments. You'll need to pay off the loan principal at the end of the loan term. By this point, you would have ideally seen favourable capital growth in your property.
From here, you can sell the property, or leverage its equity and expand your property portfolio. There are plenty of possible approaches, but what's important to remember is that with dedicated planning and a long-term outlook, obtaining investment property can be more feasible than you might think!
