A checklist, however simple it may seem, provides a clear and logical path from thinking about investing to owning an investment property.
While the journey from A to B is as unique as the individual walking it, there are clear and crucial steps along the way.
To help first-time investors get started, we’ve refined this winding path into six essential steps to check off.
Step one: Assess your financial position
Before making significant financial decisions, it’s crucial to thoroughly assess your situation. For property investment, assess your current finances to determine:
- Borrowing power
- Available funds for a deposit
- Stamp duty costs
- Legal fees
- Additional cash flow
Just like buying a home to live in, you should aim for a 20% deposit on your investment property. Additionally, you’ll need to set aside funds for future expenses and cash flow needs.
Step two: Develop a strategic plan
Investing in property requires strategic planning, much like running a business. Thankfully, many resources are available to help you understand the process, conduct research, and start planning.
At Hendrix & Hart, we offer free resources on our website and a complimentary initial consultation. These tools will help you identify your financial goals, investment objectives, and preferences.
We also provide a strategic investment consultation, offering deeper insights tailored to your goals and financial capacity.
This step is crucial for understanding different investment strategies and refining your plan based on evolving goals.
Step three: Conduct market research
Thorough market research can be daunting but is a vital step in making an informed decision.
Don’t fall into the trap of limiting yourself to familiar local markets. Put in the work to explore interstate options and find properties that best align with your strategy.
This can feel overwhelming, especially for first-time investors. So, we take the guesswork out of it by presenting you with a selection of high-performing properties that suit your goals and budget.
While conducting your research is important, our expertise ensures you find the right properties efficiently.
Step four: Identify your ideal tenants
Remember, you’re not buying a home for yourself, so focus on the needs of your potential tenants. Determine the demographics and preferences of your target renter and choose properties that meet their lifestyle needs.
For instance, attract young families by considering properties near schools and playgrounds. Students might prefer dual or co-living homes to share rent costs. Young professionals may prioritise locations near restaurants, shopping, and public transport.
Have a clear picture of your ideal tenant and use this as a guide when selecting the type and location of your investment property.
Step five: Choose the right mortgage
Selecting the right loan that aligns with your goals and risk tolerance is crucial to your success. Consider factors such as:
- Interest rates
- Loan terms
- Repayment options
At Hendrix & Hart, we partner with trusted industry experts to help you explore competitive loan options. Our guidance ensures you make informed decisions tailored to your investment strategy.
Step six: Decide on property management
After securing your investment property, decide whether to manage it yourself or hire a professional property manager. Evaluate the costs and benefits of each option to make the best choice for your situation.
Ready to start your investment journey?
If you’re ready to begin, Hendrix & Hart is here to support you every step of the way. We specialise in helping clients find investment properties and develop customised strategies to maximise returns and achieve long-term financial growth.
*The information provided in this blog is intended for educational purposes and does not take individual circumstances into consideration. For personalised advice and information, please contact us directly.
