Investing in Australian Property: 7 Tips for Beginners
Australians went mad over avocados this year.
The madness came after a 60 Minutes interview with real estate mogul Tim Gurner back in May. In the interview, Gurner stated that fewer millennials will be able to own houses in the future.
The reason why?
Gurner blames their frivolous spending habits. And he says that younger people spend too much money on things like avocado toast and coffee.
The interview not only stirred up controversy. It also raised questions about the reality of investing in Australian property. So now, more Aussies are wondering if they have what it takes to invest in real estate.
One’s appetite for avocados probably won’t make or break their ability to own property. But no one should dive into property investment unprepared.
Thinking about getting started in investing in Australian property? Don’t miss out on these 7 essential tips for beginner property investors.
That’s why we’re here with 7 tips every beginner should know before taking the plunge into real estate. Let’s take a look!
1. Have a Vision
Property itself changes over time.
Investors make renovations to improve the value of their property. The market fluctuates. Land becomes more valuable as communities develop.
These are just some examples of how dynamic real estate truly is.
But what property investors really look forward to is watching their investment grow. And there’s nothing more exciting than seeing a high return on an investment.
Decide How You Want to Make a Profit on Your Investment
Some investors choose to flip cheap, run-down properties and turn them into high-value real estate. Others look to rent out property to tenants as a way to make steady income.
Making a profit is the end goal for any and all property investors. But this can be accomplished a number of ways.
2. Accept the Challenge
Investing in Australian property is rewarding and fulfilling. But it’s also not for the fainthearted.
If you decide to invest in property, you’re not only delving into the world of real estate. You’re also taking on the role of landlord and handyman (or handywoman).
Before you invest, it’s a good idea to familiarise yourself with handiwork. You should learn how to fix everything from clogged sinks and toilets to broken windows and furnaces.
Because when a problem arises with your property – whether it’s physical or financial – you have to be there.
3. Budget Wisely
Some people found Tim Gurner’s comments unfounded. Yet, he did raise some valid points.
Investing in Australian property requires financial stability on the part of the investors. And there are a lot of costs with owning and managing property.
Here are some of the costs you’ll take on as an investor:
- Down payment on the property
- Mortgage payment plus interest rates
- Renovation costs
- Maintenance costs
Plan for the Unexpected
In addition to ownership costs, you also have to pay for the roof above your own head. You may even have mouths to feed other than your own.
So, budget wisely before jumping into an investment.
You don’t need hundreds of thousands of dollars saved up. But you do need a solid foundation that can support you if the market takes a downturn or if you suddenly become unemployed.
With that said, don’t quit your day job when you’re starting out in real estate. At first, this should be a business endeavor that you do on the side. Over time, you can make this into a full-time career.
4. Focus on Low-Cost Property
Investing in Australian property is hot in Brisbane and Melbourne. In fact, real estate value is on the rise throughout Queensland, New South Wales, and Victoria.
If you’re looking to start off in these areas, you’re making a good move. But as a beginner, you should invest in property that has potential.
There are qualities that you should look for as you shop for real estate. These are some factors that affect property value:
- Neighborhood and school district
- Property taxes
- Proximity to shopping centres, the beach, and other amenities
- Area crime rate
- Local job market
Do Your Research & Invest Wisely
Some people see property investment as a gamble.
There’s a lot of risk involved, and success is not always guaranteed.
As someone who may not have a lot of knowledge in real estate, it’s good to find your footing with low-cost property. It’ll not only be easier to make a return, but you’ll take on less risk doing so.
5. Secure a Loan
Interest rates are intimidating, we know.
It seems like homeowners are paying higher interest on their mortgages than ever before. And in a lot of ways, they are.
A large portion of your budget depends on how you plan to finance your investment. For one thing, you’ll need to decide how much you plan to borrow – and from where.
You can borrow and secure a loan from your bank, a mortgage lender, or a limited liability company. Your income and credit score, among other factors, will determine how much you can borrow and the interest rates you’ll pay.
Don’t jump on the first offer you encounter. Even if it seems like a good loan, you should shop around before making a decision.
6. Be Realistic
Tim Gurner didn’t become a real estate tycoon overnight. In his interview with 60 Minutes, he talks about the kinds of sacrifices he made in his young adult life to get to where he is today.
As a property investor, you’ll also make sacrifices. For starters, you may have to cut down on your spending costs. That could mean driving a cheaper car or taking fewer vacations.
Real estate investment is not a get-rich solution. You can find success investing in Australian property. But it takes time to nourish and grow your investments.
7. Talk to the Experts
When you’re just starting out in real estate, it helps to talk to other investors.
By talking with them, you can get a sense of what your experience will entail. You can draw inspiration by listening to their stories and by seeing their property transformations.
And by talking with people who’ve invested in property, you can also decide if it’s a journey you’re willing to take.
Investing in Australian Property Is Still the Future
Australians love their avocado toast. And they love real estate just as much.
Luckily, real estate enthusiasts and beginners alike can invest in property without giving up avocados. But more importantly, investing in Australian property will continue to be something that’s prevalent in our society – for generations to come.
Vystal Property is here to guide you through your property investment journey. We can help you develop a solution to see a return on your first property investment.