Property Investment – Tips for a first-time investor

on Mar 30, 2016
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The process of getting into the property market for the first time, whether as an owner-occupier or as an investor, can be an imposing one. However, you should not by any means allow this to put you off. With property prices expected to rise this year, the best time to buy is sooner rather than later. The following steps should prove useful in ensuring that you make your entry into the market successfully:

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Know Your Goals

It is very important to have key goals in mind as you choose a property to purchase. Obviously the two main goals you might hold are either finding a nice place to live or obtaining a profitable property investment. However, it is possible – and advisable – to get a lot more specific and detailed than that.

If you are looking for a home, think about what exactly you want to get out of it. Do you see yourself settling there pretty much indefinitely, or do you see yourself moving again in five or ten years? Is it a place to raise a family, a bachelor pad, or something else? All these things can play an important role in informing your property choice.

If you are looking for an investment, think about the time you plan to hold the investment for and any future exit strategy. Consider your budget, the kind of market you want to target, and the things that tenants in that market look for. Choose a location and property according to these considerations.

Don’t Get Carried Away

It is all too easy to get carried away when buying or investing for the first time and start looking for a property that is absolutely perfect. You will probably not be able to find your dream home or that prime, ultra-profitable investment as a first-time buyer unless you are willing and able to commit a very generous budget – and even if you can do this, it is not always a good idea.

Instead, have realistic expectations and appreciate that there may be limits to what you can achieve. If you can find a property that is all you could have wished for, that is great. If you can’t, on the other hand, then don’t dismiss what could still be a solid purchase.

Builders and Developers

This is something that investors tend to encounter more often than owner-occupiers, though either class of buyer might come up against this consideration. If you are either planning to build a property or buying off-plan, then it is important to give careful consideration to the developer or builders you deal with, and to carry out due diligence.

For example, a developer may be offering a generous percentage off of market value and a period of guaranteed returns on a yet-to-be-built rental property, but are you certain they will be able to follow through on those promises? Do they have a strong, established track record of successful projects in this area? Answering that question doesn’t necessarily have to be the full extent of your due diligence, but it is one of the best single indicators of reliability.

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