As a first-time property investor, the property world may seem daunting. However, there are plenty of ways you can make sure your first property investment is a success. If you’re thinking of buying your first property investment, our Secrets of Success for First Time Property Investors offer expert tips on how to make the best investment decisions. These useful hints should help set you up for a lucrative career as a property investor.
Research Like a Property Investor
Knowledge is power, especially for a property investor just starting out. Spending time researching your location is one of the best ways to learn about property investment. Look at potential yields, what’s going on in the area and any future developments. Think about your target rental customer and choose a property that will appeal to them and their needs. Many property investors will be happy to share their knowledge and expertise with first-time investors. Reach out to local investors and talk about your plans. Alternatively, talk to investment firms about what they would recommend in the current market. The internet is full of resources where successful investors have shared their tips too. As a new property investor, there is no such thing as too much research.
Run the Numbers… Twice
Making sure you budget correctly is essential when it comes to your first property investment. Investment is a numbers game and weighing up what you can afford and how much you can make is far easier with the figures in front of you. As a property investor, looking at potential yield and capital appreciation allows you to figure out how much you can potentially earn. Look at your current income, potential rental returns and outgoing costs to find out if you can afford to invest. Successful property investors never buy more than they can afford. Double or triple check your figures and run through a few different circumstances to make sure you can afford to invest. Make sure you know the following –
• Total cost of your investment
• Rental rates of similar properties nearby
• Any fees or extra costs involved
• Potential rental yield
Keep Your Cool
When asked about first-time property investment, the Forbes Retail Council stressed the importance of being smart and not getting carried away when you purchase your first property investment. First-time property investors who do well stick to their figures and don’t let emotions influence their decision too much. Make sure you don’t overpay or let your enthusiasm get the better of you. By knowing your numbers and doing your research, you can make an informed decision about your first property investment.
Consider Off Plan Property Investment
Though having bricks and mortar and a place to look around are usually benefits of property investment, they’re not essential. Buying off plan property can be a perfect first property investment as costs are generally cheaper, and you can access early opportunities. There are considerations, for example, there may be delays, and you won’t generate rental income until the building is completed. However, you also won’t have to pay the full amount until the build has finished, so you can spread out paying.
Keep Records of Everything
It’s vital that first-time property investors keep records of their investment. It can also be necessary to record your communication with the agent, developer and everyone else involved. From receipts to invoices to screenshots of text conversations, it’s worth making sure you are covered in case anything goes wrong. It also makes it far easier when it comes to completing your tax return. Having everything on paper means you can check your numbers in case you get caught off guard. Asking for things in writing is totally acceptable and means you have evidence of your agreements.
Set Clear Property Investment Goals
Thorough planning and thinking about the future are essential skills for first-time property investors. Many of the most successful property investors have been able to visualise decades into the future, with a clear idea of where they ideally want to be. Setting yourself goals and targets is a great way to start your property investment journey. Set realistic and achievable goals for the next couple of months, as well as in 5 years or 10 years time so you can measure how you’re progressing. Have a look at the various property investment strategies out there and decide which is best for you.
Go For It – Become a Property Investor
You’re bound to have heard people say ‘I wish I’d bought that when it was so cheap’ or ‘That’s worth a fortune now’. Many people have regrets about not investing in property as capital appreciation can be enormous on the right property in the right location. Great investment opportunities are in high demand, and there will always be other property investors considering it. If you are sure you can afford it, and you’ve found some property investments that you think are too good to miss out on, go for it.