Investing in Property
Property investment is the end-goal of many savvy home buyers, but where do you start and when is the right time to take the leap?
Whether you are investing in your first property or your fifth property, speak to an accredited finance broker in Perth to make sure that you are on the right track. Here are five questions that every potential property investor needs to ask themselves before heading into the property market.
1. Why do you want to invest in property?
If the reason is to build retirement funds and cash flow, you’ll have a different investment strategy than someone looking to build for capital growth. Write down your goal so that it is clear in your mind and so that you can express it when discussing your real estate goals with your Perth finance broker.
2. How will I fund the deposit?
If this is your first home, you may not realise that costs increase if you have less funds to inject into the deposit because of Lenders Mortgage Insurance (LMI) requirements. While most people don’t have the ideal home deposit sitting in their savings account, many homeowners will have enough equity built up in their current home to fund the deposit for a second home.
3. Will the bank fund another property?
This is a tough question to answer, as each lender has different funding requirements. Some lenders are more likely to lend you money for your first house than a fifth, and vice versa. Property investment is more complex than buying a family home, as there are different lending rates and requirements.
Your finance broker in Perth needs to be able to find a lender that is suited to your goals and be able to help you design an investment strategy that will be acceptable to the banks.
4. Which property should I choose?
Purchasing the wrong property can be a costly mistake. Unfortunately, there are no clear cut ‘right’ and ‘wrong’ properties, as the right property for you is highly dependent on your current circumstances and investment strategy. It’s always easier to prevent the problem of sinking your funds than of getting yourself out of dire straits, so do your research before committing to any property.
Speak to All Nation Finance to discuss how you can build your wealth with property investment.