With the first quarter of 2011 over, it is time to evaluate whether you are on track to achieving your property investment goals.
If your goal was to purchase that first investment property, right now is an ideal time, provided your finances are in order and you have a buffer of cash to protect yourself against unforeseen expenses.
So far this year we have seen the market cool down slightly compared to its buoyancy during 2010. You may expect this will help you nab a ‘bargain’ investment property. Keep in mind, however, that prices for quality stock will not fall drastically. And it is quality stock you want as this will get you long term returns. Prices may go down more in low demand areas, but these areas will not give the same yields and longterm capital gains as the blue chip suburbs where there is higher demand and less supply.
That said, as we are entering more of a buyer’s market compared to the past year, those people who are in the right financial and employment situation to buy could get a very good deal.
The best strategy for anyone looking to buy their first investment property is to buy blue chip, median priced properties in areas where there is always demand. This is generally suburbs 5 – 15 kilometres from the CBD and near the beach in Sydney or the bay in Melbourne. If you buy an investment property in these areas you will always be able to attract working professionals which reduces the risk of the property going untenanted. This in turn will assure you of good rental returns.
To get started, put in some legwork and do your research online and by reading the literature. The expert columns on realestate.com.au provide a variety of opinions on the market, and there are a whole host of other property sites out there. I also answer viewer’s questions each Friday on Your Money Your Call (Sky Business News Channel). Another great idea for first timers, or any investor looking to improve their returns, is to get out there and network with other investors. Ask for their recommendations for professionals who can help you achieve the best possible results.
You need professional help with your first investment (and, I believe, every investment thereafter) because you are spending large amounts of money. You’ve got to treat this outlay like you would any other business and pay for expert assistance. Paying professionals to do a lot of the work for you makes sense because they can usually do a better job. Even though people hire me to buy and renovate their portfolios, I still use teams of valuers, building inspectors and strata inspectors so that I know what I’m buying into. This makes property investing a straightforward process rather than something to be intimidated by.
If you are ready to enter the investment market, go for it now. It’s a great time to take the leap into the world of property investing.
Article by Chris Gray – CEO Empire Personal Property Portfolio