How do you start in both deciding and then actually purchasing an investment property?
Firstly, I think knowing what you want is the key, and for so many, in reality, we just go from year to year with the hope that it will all work out.
Blink and we are 30, 40, 50, 60 and now 70 and our income producing days (ability to obtain lending for investment) are gone.
This should have you in motion to deciding to act, as doing nothing is just not an option. Then look at what works best for you – yes having a balanced portfolio does make a lot of sense and as a property focussed educator, I believe this is wise – rather than just property, property, property.
In looking to select an investment property, we really need to work backwards from your financial goals; as we need to look at exactly what it is that you are endeavouring to achieve (time line and dollar amount). Then we need to confirm your current borrowing capacity and finance structure that works to enable you to keep your own home safe, maximise and protect your borrowing capacity and enable you to have a buffer and lifestyle.
In purchasing an investment property, this needs to serve your needs and ideally work to enable you to duplicate and build your property portfolio (as one property will not get you there). Yes, we need to keep it safe for both you and the banks – so you can leverage out of one property in to another, so key drivers of strong population growth, multiple industries/jobs, proximity to existing infrastructure of schools, shops, transport, a low vacancy rate of 3% or less (so you are not fighting for your tenancy), tax and cash flow effectiveness, quality of build etc. are some of the important deciding factors.
As we can see, this is not a “one size fits all” situation and deciding to invest in property is the starting point. Then thorough research and solid, fact driven education can you work out what will work best for you.