Buy Your First Property Right First Time Round
So you’ve made the first step and got your foot on the property ladder by purchasing your first property. However, if you are looking to retire comfortably then buying one property is not enough, you really need to start looking at buying property number two, but is this first property the ‘right’ one to lead you to success?
Buying your first property in the right area is extremely important when looking to purchase further properties down the line and build up a property portfolio. If you have done well and bought in an area that has seen growth in 24 months, then you are likely to have gained enough money through capital gains to use as a deposit for your next property purchase.
However, this is not always the case. There are many instances where people fall into the trap of thinking they have bought a great property just because it is close to the sea or the city. In actual fact the market in this area may be on a decline, leaving them stuck with a property that isn’t making any money, or is costing them more as there is a low rental demand here.
In these cases you could sit and wait it out and hope that the market becomes more favourable, but this could take time and time might not be on your side. You could perhaps put up the rent, but this might deter people from renting. Instead, you should have a reality check and realise that the best option would probably be to suck it up and try to sell this property for as much as you can and learn from these mistakes and move forward.
Seeking the right advice is key to avoid starting off on the wrong foot and learning all you can about the market is always beneficial, especially if you are looking to become a successful property investor. Doing your homework on suburb profiles will help determine where the next areas of growth are, as well as keeping your eye on the property cycles and economic trends. By keeping up to date with the latest property news, facts and figures, this will help you to avoid making the mistakes which you might have made in the first instance, and allow you to buy in an area that is rapidly growing, providing you with your next deposit.
When looking at property number two, three or four then you should really have a detailed investment plan that is written up and provides your end goals, if you seriously want to become a property investor. This should list your current financial situation and your household budget to work out your cash flow and whether you can get a loan to secure a property. It is also important to think ahead and work out how much deposit you need and where this will come from. You also need to know when you will make money from your current property which could be used as a deposit for your next one.
In time, you might find that all your money is tied up in assets, so selling a property is a good way to release this equity in order to fund another. This is where your property research comes in handy as you want to sell this property at the best time during the property cycle in order to make the most return.
It is essential that you spend the time researching the market and getting advice from the right people to ensure that your first property purchase ends up making you money rather than setting you back. This is where iBuyNew can help. It is our job to watch the market and identify pockets of growth and the next areas of opportunity. If you are unsure what to do next then we are here to help point you in the right direction and show you how to invest wisely.
Published on 20th of October 2014 by Marty Stanowich