If you’re one of those people who want to become property investors but just don’t know where to start, this article is for you! Read on and we’ll step you through your first weekend as a property investor. Of course, we’re not expecting you to buy anything (we think you’d be crazy if you did!) but your first weekend should give you a taste of things to come!
Your first task is to set yourself a property investing goal. This should take about half an hour. Make yourself comfortable, turn off your phone, relax, and start thinking BIG!
Answer the following questions:
- What will investing in property give me that I don’t have now? (common examples are more time, freedom, more money, etc.)
- What will this enable you to do? (common answers include “I would play more golf”, “I’d go trekking through Nepal/Honduras/Tasmania”)
- What are the most important things in your life? (such as family, health, etc.)
- With all this information in mind, answer the following questions:
- What would I really love to be doing with my life and how could property investing help me?
Your second task tonight is to analyse your risk profile. Take this simple survey and see where you lie.
Your first task this morning is to go online and take a quick look at your finances. You need to be able to answer the following questions:
- What is my current savings/debt position? To do this, you will need to find your total cash savings and then subtract your total debt, including non-mortgage loans and credit card debt. The only debt you don’t need to consider right now is any mortgage you might have – we’ll explain why later.
- How much money can I reasonably expect to save each week (or month, if it’s more relevant to your own situation)? To do this, list your “necessity expenses” such as electricity, rent/mortgage, food and so on. Don’t forget that some expenses such as rates may only be billed annually – you’ll need to find out how much annual bills are and divide this figure by 52 (for those calculating weekly savings) or 12 (for those calculating monthly savings). Then make a decision about which “luxury expenses” you would like to allow for, and how much you will allow. After considering your income, after tax, you can arrive at a relatively reasonable savings figure.
Once you have answered these questions, head down to the local newsagent or supermarket and buy a copy of a leading Property Investment magazine. There are a few to choose from! Make sure pick a magazine that includes a data section, showing information such as price, vacancy rates and yield in many different areas.
Now come home and relax – you’re going to spend an hour (or more if you enjoy yourself) reading through the magazine. You’ll probably find inspirational articles about successful investors, insightful articles about what locations might make good investments and possibly a tip or two about how to renovate cheaply and effectively.
Keep a keen eye out for any property groups or mentoring services that you might find mentioned in the magazine – these might be most helpful for tomorrow’s tasks!
You may have already done this, but it’s now time to have a more thorough look at the data in the back of your magazine! Look up the statistics for your particular suburb and answer the following questions:
- What is the yield for your area (the location in which you reside)?
- What is the median house price and what is the median unit price?
- If you were to invest in your area, you’d probably need to have saved about 25% of the purchase price of a property. How much would that be? How does this compare to your savings?
If there is a section which shows high yielding areas, have a look at a couple of locations. Read our free report (which you receive when you sign up over there on the right hand side of this page!) called “Tips for choosing your investment property location”. Then listen to our podcast EPI014 |8 Steps to becoming a property location expert. Follow the steps in the article and podcast and come up with two reasons why these areas would (or wouldn’t) be good for property investing.
Congratulations! You have just completed your first weekend as a property investor! Now, a very wise man once said that any experience is worthless unless it’s reflected upon, so please complete your weekend by answering the following questions:
- What are three things I learned this weekend?
- What skills do I have that will help me?
- What skills will I need to work on?and lastly…
- Am I ready to invest in property?
Now remember, there are many things we haven’t covered in this article including;
- Viewing and analysing individual properties
- Analysing locations to find out which areas are better for property investment
- Different types of loans that might help you
- Depreciation and other tax implications
If you would like more information on these, and other, topics then feel free to browse through our website, all of our articles are listed here and make sure you subscribe to our free podcasts in iTunes. You’ll find a bounty of information in our podcasts, and they’re all free!
Good luck with your property investing!