Are you thinking of buying an investment property? While it can be a way to get your foot in the property market to help build your wealth and grow your assets, it also represents a big financial commitment and carries a certain degree of risk.

If this is your first time buying an investment property, this guide will take you through the basics of what you need to know about investing to help you determine whether property investment is the right move for you.

Know your investment goals

One of the most common reasons people invest in real estate is to build long-term wealth. However, investing in a property isn’t for everyone, that’s why it’s important to first figure out why you’re investing and whether it suits your circumstances.

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Work out your budget & the costs

When purchasing a property for investment purposes, a significant amount of money will be required upfront.  This can include stamp duty, legal fees, building and pest inspections and loan set up costs. You’ll also need to consider any ongoing expenses, such as maintenance costs, council and water rates, insurances and potentially property management fees.

Savvy Tip: Use our mortgage calculator to find out how much you can borrow to help you work out the type and size of investment home loan you can afford to buy your investment property.

Research the property market

Property values can fluctuate over time, so understanding the market dynamics is important. Remember to seek professional advice and take the time to do your own research, so you’re not rushed into making big property investment decisions.

Find the right property to invest in

Investing in a property is about capital growth so finding a reliable property that will increase in value is key. It’s also important to remember to not take your own needs into consideration when hunting for an investment property, but to think about what features will attract potential tenants.

Savvy Tip: Research areas that deliver high and consistent rental income returns and look at neighbourhood characteristics such as the proximity to public transport and shops. You can also go a step further to find out what future infrastructure development the local council has planned that will potentially add value to your property.

Choose the right investment home loan

Finding an investment home loan that not only has a low-interest rate but also comes with competitive features is key. Work out different scenarios and the potential costs associated with different loan types to help you decide which loan option is right for you.

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