There’s a reason that property investors take up a large chunk of the mortgage market. Investing in property can be a reliable place to store your money, and hopefully make a return, all going well.

Like all speculation, there is always risk. But there are strategies for minimising the risk, and getting the most out of your investment.

To help, we’ve put together some tips for investing wisely in the property market.

investing process tip

Invest time wisely

Before you invest your hard earned cash, take the time to make sure you make good decisions.

You will need to invest time in researching the property market. The property market ebbs and flows, with prices going up and down, depending on supply and demand. It’s not just house prices you should be watching; you also need to look at rental returns. Track back several years, and look for growth in rents. This is a fairly good indication that the rental market is strong.

You also need to invest time in making sure your finances are in order.

Build a team of experts

Build a team of experts around you. Your buying agent will help you get your head around the market. Your financial adviser will help you make decisions suited to your personal financial situation.

Your Smartline Adviser will help you streamline time spent investigating finances. They will also help you identify mortgage options and calculate the real costs of purchasing an investment property, including taxes, administrative fees, insurance and ongoing property maintenance costs.

Plan well

Your advisers will help to give you clarity on your financial situation, and can steer you towards suitable options. For example, you may be in a situation to take out a mortgage based on the equity in your existing property.

You also need to plan how to manage property upkeep. Will you outsource to a property manager once you’ve purchased your property? What are the ongoing costs of maintaining an investment property? Your Smartline Adviser can help you calculate these costs, and identify how to fund them. For example, you may extend your loan beyond the value of the house so that you have a buffer to pay for maintenance.

You might want to speak to your Financial Adviser about claiming property expenses as a tax deduction.

Avoid an emotional purchase

While it’s tempting to buy a beautiful place you can imagine you and your family living in, purchasing with your heart may not be a wise move.

You need to think about what you can afford, what the market is like and the likelihood of healthy rental returns. Think about buying property that attracts renters. For example, if you are purchasing close to the CBD, smaller properties may better suit the renting market.

Look at future growth in the area you are buying in. Limited opportunity to expand construction combined with population growth, means that supply and demand will swing in the investor’s favour. Rental returns are likely to increase. Chat with real estate agents and the council about planned future developments.

Discussing your situation with your Smartline Adviser can help you ensure you are thinking with your head – and not your heart – so that you make a viable property investment.