A 6-Step Guide for Investing in Real Estate Property


An effective way to accumulate wealth is to invest in real estate property. If you possess an asset in the form of real estate, then you can utilize tax benefits, cash flow, and long-term stability as property always increases in value over time. 

Whenever you are going through this article, you may have probably been reading other posts or articles regarding the best investment loan or how to begin and score an amazing investment deal. However, you’re still stuck. 

It isn’t surprising. According to the latest Australian Financial Review reports, only 20% of Australians are owners of real estate property. The ground reality is that real estate investments can be simpler. You only need to know the do’ and don’ts. To help you begin, we have prepared these six steps to guide you in investing in real estate.  


  2. 1. Seek a Pre-approval 


You should get in touch with your bank or mortgage broker and seek pre-approval. This is an official hint that the lender has approved your loan request at the preliminary level. Don’t make the mistake of overcommitting with expected returns. 

The bank will consider that you are investing in a property while scrutinizing your application. They will seek information about the likely rental return and possible occupancy of the property you’ll invest in. So, complete the calculation and present your request to the bank in a detailed manner. 


  2. 2. Review Your Finance 


Prepare a list of all your incomes and assets against all your expenses and map them out over a year to understand your cash flow. This will help you realize how much you can invest. 

If you have to seek a loan, find out how much you have for the initial deposit. Keep in mind that banks will ask you for nearly 20% of the total amount for an investment property. Accordingly, be ready to have that. 

Ensure that you clearly understand the way a loan will impact your monthly expenses and you should be comfortable with it. 


  2. 3. Set Your Goals 


Have clarity about your goals and what you wish to achieve with your investment both in the long and short term. You may wish to retire in ten years and utilize the investment property to support your lifestyle and living expenses, strategize a ten-year investment plan. Set the goals that you wish to achieve year by year and break down what you want to do quarterly to ensure that you follow through. 

Make deadlines to make your goal practical and more achievable. 


  2. 4. Get Your Taxes Correctly 


Possibly it is not the most interesting of the topics. However, during investments, taxation is a significant piece of the puzzle. Get in touch with your accountant and seek clarifications on: 

  • Negative gearing and depreciation allowances- As per your specific situation, ask your accountant whether it’ll be better to invest in a new or older building. 
  • Name/s that will be on the contract. When you purchase with someone else this will impact future taxation. That’s why you must ensure that you are clear on what will change. 
  • All this will affect your yearly and long-term returns. 


  2. 5. Search for the Property 


While searching for the right property, browse websites such as reiv.com to collect information regarding the suburbs. 

Gather more knowledge about the recent sale history of the area, the number of properties that are selling, and how long they are on the market. Also seek information about the historical growth of the area and possibilities of future growth. Find out whether this is a suburb that people will want to continue to live in and will be invested in in terms of infrastructure. 


  2. 6. Hire a Property Manager  


Hiring a professional real estate agent will be a game changer to get phenomenal results. Real estate agents spend their days probing the property market and communicating with buyers and sellers, councils, and local businesses. Accordingly, they know what’s going on and they possess the expertise to facilitate you in cracking the best deal. 


Conclusion 


Get in touch with a broker who can help you crack a deal with the best mortgage lender in Australia so that you receive the proper guidance regarding investing in property financing. 

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