A property market is a great place for investors to achieve a return on their investment. The key is knowing how to make the most of your money by investing in the right areas. Whether you are looking to add a rental property to your portfolio or thinking about buying your first investment property, here are five secrets of successful property investing.
Know when to buy
The best time for property investment in Melbourne is when there’s a dip in the market. A dip in the market could mean that the value of a property has decreased or that there are fewer buyers than usual because of economic uncertainty. By taking advantage of these dips in the market, you’ll be able to get a bargain on a great piece of real estate. Another thing to consider is that if you’re investing in the short term, then the timing doesn’t matter that much anyway, as long as you can rent out your property quickly and for good money.
If you are new, don’t start out buying a multi-unit complex or an investment property with many rooms, bathrooms, etc. Start with something simple, maybe just a one-bedroom unit, which will be easy to manage for beginners.
It may take some time before you start seeing any returns on your investment. Don’t rush into things. If you are starting, buy one house at a time so you can focus on mastering the skills first before moving on to bigger projects.
Have a plan
Having a plan will help you decide how much cash flow you need from the property and what kind of tenants will help you achieve this goal.
Research! Research! Research!
If there is one thing I have learned about successful property investments, doing research is crucial in helping me to discover good deals and successful strategies to achieve my property goals.
Be realistic about your budget
You need to be able to achieve positive cash flow quickly, so avoid overpriced properties. This will give you the best chance of achieving your returns on investment (ROI) quicker than if you choose something that will cost you more in interest payments. Look at the property as a whole, including any renovation costs or other expenses that may come up along the way. It’s also important to look at how many months it will take you to reach positive cash flow. The shorter this period, the better.
Know the Market Value of the Property
The first thing you need to know is that you should never buy a property unless you are very confident about the property’s market value. The main reason for this is that you will end up purchasing through a mortgage loan, and to get approved for it, you will have to disclose your income and other financial details. If you overstate the value of the property, there is a high chance that your application for a mortgage loan will be rejected. Therefore, you should hire an experienced professional valuer who can determine the property’s market value based on its condition and state.
It should be affordable
After identifying a desirable property, you should consider whether it is affordable or not. The cost of buying should be less than half of your total income so that after paying other expenses like rent, utility bills, and other expenses, there will still be enough money left over to pay off your monthly mortgage payments without any financial stress.