Milestone Purchases, Part 2: Buying your first investment property
Buying your first home is a major breakthrough in your life. It’s a chance to make a sizable financial investment, own a valuable piece of property and make yourself and your family comfortable in a place you can call your own. But if you have the wealth to purchase more than one home, then why stop at one? Purchasing additional properties can be a great investment opportunity.
After buying home number one, the second big milestone you reach as a homeowner is buying your first investment property. In this scenario, you’re not necessarily buying a place with your family’s daily living situation in mind – instead, you’re looking for value. You want a place that will be worth more and more as time goes on, helping you build a stronger portfolio.
How will you pull that off? What do you look for in a property, and how do you make the finances work?
Finding the right investment home for you
If you’re able to secure a home loan and get some cash to invest in new property, the prospect will be both exciting and overwhelming. There will be many options to choose from, and it’s hard to narrow your choices down to just one.
Bear in mind: When choosing an investment home, your priorities are a little different. Because you care more about value than your own living situation, you have to consider properties that will have clear mass appeal. As the Australian Securities and Investments Commission has advised, this means it’s wise to look for places with attractive features that everyone will love, such as spacious rooms and attractive furniture.
It’s also best to keep maintenance needs in mind. While part of you might want to invest in properties that are big and extravagant, the drawback is that maintaining such a place can be difficult, both logistically and financially. Sometimes, simpler is better.
Preparing for the challenges, financial and otherwise
While adding property to your portfolio can be profitable in the long run, there are also sure to be difficulties in the process. For example, even if you have the help of a first home buyer loan, it can be dangerous to dive into too much investment, too quickly. This is why US News and World Report recommends that new investors start small, purchasing properties that are affordable and easy to handle logistically.
On the financial side, there are sure to be unexpected snags that come up, such as property tax payments that you didn’t account for in your initial budget. There also might be issues that aren’t money-related, like repairs you need to make around the house. All of this can be daunting if you get too deep into the property game early. By beginning with manageable investments, you can make it easier to find your footing.
Get the loans you need to invest well
Even if you’ve got a decent amount of money saved up to invest in property, it doesn’t mean it will be easy on your finances. It always helps to have a little extra cushion to protect your wealth. Fortunately, at Mortgage Choice, we’re able to offer property investment loans to help out investors like you.
When you start to purchase investment properties, you want to do it with your long-term financial goals in mind. How much do you want to have gained in five years, or 10? These are tough questions to answer definitively, but if you talk to our experts, you can surely pick up a few valuable insights.
