We asked CRAIG WILSON, CEO of PiC Group, to outline the 4 steps every newbie investor should take when buying their first property.
There are lots of opinions, tips and guides for first time investors – but let me break it down for you in a simple fashion that is easy to refer back to.
Get yourself finances in order – this includes engaging with a Mortgage Broker.
Don’t buy that car, wait until you have your investment mortgage sorted.
Don’t increase your liabilities – this includes credit card facilities.
If you can, speak to a Mortgage Broker – not directly to your bank. A broker will be able to source your loan from a wide variety of lenders, whereas your bank can only offer their own loan products.
Get your team in play. This means talking to your Accountant and finding a Conveyancer and a Property Manager.
And decide if you are buying on your own or through a Buyer’s Agent.
Having these people ready and working with you will ensure the process runs smoother and faster.
Dissociate yourself from the investment property and don’t tie the purchase with your emotions.
Keep the facts at hand;
- value for money
- return on investment
- area profile
- capital growth history
- schools, universities and hospitals
- infrastructure planned for the future etc.
And most importantly. Do not pick a property that suits you because a distant cousin said the area was good, or you like the colour of the house.
Organise your files. This one is an afterthought that not a lot of people hold much weight to.
But if you are building new, keep a folder (even on an external hard drive) with copies of contracts, warrantees, agreements, depreciation schedules, tax returns, receipts from solicitors (deposits and bills), and bank approvals. You should also keep a breakdown of what facilities your broker has set up – so you can refer to if needed.
If you keep organised electronic records for your property purchase it will be so much easier to send documents when receiving requests from anyone.
By using these 4 Steps your first investment property experience will be a smoother journey. Enjoy!
Craig is the founder of PiC Group since 1993 and SiNC Surveys, and a successful private investor in his own right, coming from a background in the insurance, financial planning and real estate development industries.
General Advice Warning: This blog is not designed to replace professional advice. It has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the advice, in light of your own objectives, financial situation or needs before making any decision as to what is appropriate for you.