The 4 essential steps before you buy an investment property.
As any professional adviser would admit, we have all had members of the public contact us after they have purchased and asked if what they had done was “right”.
The contact is usually initiated because the buyer was feeling “buyer’s remorse”, uncertain about their decision for a variety of reasons, or wanted to seek professional approval about what was essentially an emotional buying decision undertaken without much research.
Though I am glad to say these calls are rarer, there are still many I suspect getting the steps wrong.
This blog is about the essential way to approach your investing. Each of these steps will be the subject of a much lengthier discussion in later posts.
Step 1: Take advice
By this I mean professional advice — not necessarily family, friends work colleagues etc.
Discuss options with your accountant or property investment adviser who has experience in this specific asset class and has helped many before. This will clarify for you the opportunities that are out there and whether you have the potential to invest, as well as how to analyse the financial implications fully.
This saves you time and money and allows you to focus on your wealth creation strategy — not someone else’s.
Step 2: Determine your financial capability
Have a professional confirm your borrowing capacity in the current market across a range of lenders. Even within your capacity you may have a comfort level you do not wish to exceed. If you can get pre-approval for your loan, great, but understand your capacity to begin investing (and where you can get the best value for your dollar).
Step 3: What structures need to be put in place?
This follows on from Step 1 as your accountant may make recommendations that are important for a variety of reasons linked to tax, estate planning, superannuation etc.
These structures need to be in place prior to purchase of an asset to avoid additional costs and stress.
Step 4: Select the appropriate Property
Every client has different needs and priorities to take into consideration in the selection process. While there is a lot of stock out there, it is not all investment grade stock. Discuss with your accredited adviser what are appropriate options for you to consider. You should receive a full written report covering the analysis of any recommendations made to you. This will make the selection process easier for you.
If you would like to discuss how the Newcastle Property Hub individually or collectively can assist you to achieve your property dream, then contact us for a complimentary discussion.