Investing in real estate can be overwhelming for a first-timer. When you don’t know where to start or what to do next, it’s easy to get lost in your journey and end up losing interest or failing to achieve the goals you’ve set.
But because it’s the ideal time to invest in real estate, given that the interest rates are at their lowest in a very long time, you shouldn’t miss out on the opportunity.
After a decline in investment lending in the last couple of years or so, with the lowest point seen in May of 2020, it’s surprising that the investor market is once again rising. If you are among those first-time home buyers in Sydney who wants to give real estate investing a go, read this two-part post to learn some tips that could help you succeed on your first try:
Step 1: Establish Your Goal and Come Up With a Plan
Before you contact a real estate agent and start looking for properties, you first need to determine your goal. Then you need to create a plan that you can follow so you can be prepared for the next steps.
Tip #1: Determine How Long You Want to Keep the Investment Property
What’s your plan for the property? Will you actually live in it in the future or keep it as one of your first rental properties? You need to determine this as your answer to this will influence your decision.
Tip #2: Have a Clear Grasp of Your Finances
Before you start looking at available properties, take time to understand where you stand financially. Calculate your capabilities by determining both your income and your regular expenses. You can also use home loan calculators to have an idea of the additional expenses that the investment property will bring.
Tip #3: Know the Area
Another essential thing to consider when you’re thinking of investing in real estate is the area where the property is located. Make sure that it is in an ideal location with thriving businesses where your tenants could work or near universities where students may be looking for rentals. The area should be appealing to tenants; otherwise, you might end up with empty units for months or even years.
Tip #4: Study the Rental Market
As you research the location of the property, you should also familiarize yourself with the rental market. This will give you an idea of what renters prefer, what rental rates they’re likely to pay, and more.
Tip #5: Figure Out Your Potential Income Beforehand
It won’t be a good idea to dive right in without even knowing how much your rental yield would be. You want to make sure that you are actually going to make money. The last thing you want is to end up with a property that doesn’t pay for itself and even eats at your own money. Do your homework and inform yourself as much as you can. Then make sure you’re prepared for upfront costs as well as other expenses that you’ll likely be covering before the property starts making money for you.
This is only the initial step in a four-step process that the best mortgage broker in Sydney is sharing with you. In the second part of this article, you’ll learn about the other steps that you should take to ensure your success in your investment venture. While you wait for part 2, start planning how you’re going to apply what is discussed. Remember that you have to carefully plan and prepare before deciding on a particular property.
Wealthy You is one of the most versatile mortgage brokers in Sydney that can help you with our reliable mortgage solutions. Contact us today to know how we can help you in your journey to becoming a real estate investor.