How are you planning to spend your Easter break? Is this the best time to invest in property?
Timing is crucial in buying an investment. It could be tricky because of demands and prices affecting the market. Holidays can be used to change your perspective. Most people are out and about during these seasons. This would give serious potential buyers a leg-up on auctions and bargains on houses you've been eyeing for a while. This Easter could be your chance to lock into that investment property.
But before hopping into that decision, here are some questions you need to ask yourself.
NUMBER ONE: ARE YOU READY FOR THE COMMITMENT?
A property investment must be a long-term commitment in order for it to be worthwhile, so the very first step is to ‘do the numbers’ in order to evaluate your budget, potential constraints, and future financial and personal obligations including the potential impact on family members. You need to assess your ability to maintain or improve personal income as well as your commitment and ongoing financial capability to continue to service the financial impact of the investment for a minimum of five to ten years, as that’s what generally brings premium results.
NUMBER TWO: HAVE YOU SPOKEN TO A PROFESSIONAL?
You now need to obtain professional advice. An investment in real estate is likely to be significant in relation to your current financial position. If you have already discussed the investment with a licensed financial planner or investment adviser and accountant is considered the most appropriate in your current circumstances, you will have considered aspects including rental return, maximum capital growth and/or tax effectiveness.
You next need to locate a suitable property. Contact a mortgage broker to help you to secure finance to enable purchase. This will give you the opportunity to ask the broker as many questions needed to alleviate any uncertainty you may have about securing that finance. Using the services of an accountant, financial planner, solicitor/conveyancer, and property manager on your team will also assist you in coming to your decision.
NUMBER THREE: ARE YOUR FRIENDS AND RELATIVES ON BOARD WITH THIS?
Talking to friends, family, and acquaintances who have already made such an investment, or are currently considering one, can help your awareness of stumbling blocks and potential issues that you might otherwise miss. While any issues you face may seem new, it can help to bounce these off a trusted friend or relative who has been there before.
NUMBER FOUR: HAVE YOU COLLATED YOUR INFORMATION?
In order to apply for finance, you will need proof of your current income, employment and your assets as well as all liabilities including debts, loans, rental payment, outstanding credit card obligations and any other due payments. Collate these and also any paperwork that helps support your personal position.
It is strongly recommended that you have a fully assessed pre-approval before you start your search. This will allow you to know what your financial limits are so that you can make an offer when you’ve found a property you like.
NUMBER FIVE: HAVE YOU REMOVED ALL EMOTIONAL STRESS IN THIS DECISION?
An investment property purchase should not be an emotional decision. It is a business decision. Your decision should be based on what would appeal to the type of individual who wants to reside in the area.
If you've answered YES on all these questions, then you might just be ready to embark on your investment journey.
So, whether you're on your way to those holiday spots or at home planning your future, we hope you have a good Easter.
Feel free to book an obligation-free virtual appointment or leave us your details. Dream Catchers Lending is an MFAA-accredited member.
Photo by Roger Bradshaw on Unsplash