I have been a home loan broker in Rockingham for over 15 years. In that time, I have watched some investors go from buying their first investment property to having sizeable portfolios. It isn’t as difficult as it sounds but you have to start with your first property. Here are eight steps to becoming a property investor.
Get a Handle on Your Financial Situation
This is easy. Count your assets vs your debts. Then compute your monthly income including any income from outside sources such as interest and dividends. Then it’s time to add up all of your monthly expenses. This will let you know where you stand.
Talk to a Mortgage Broker for Pre-Approval
The next step is to call a mortgage broker and apply for a pre-approved loan. This allows you to know what you have to work with and gives you good leverage when negotiating prices. Even if you aren’t qualified yet, the process will let you know where you stand and what to work on. It is also wise to start working on reducing credit card debt and borrowing limits.
Set Financial Goals
If you don’t have firm goals, you might as well be running a race on one leg. It’s that important.
Risk Tolerance Assessment
You need to assess your risk tolerance. This will define the strategies you use in building your portfolio.
Create a Budget
This will ensure that you have money to invest and a small buffer in case of emergencies.
Create a Plan to Reach Your Goals
This can be as simple as “buy one single-family rental property every year.”
Become an Expert
Start learning everything you can about the properties and areas in which you want to invest.
Treat it Like a Business
From the first day, remember that you are now in the business of property investment. Always remember: you will be competing against professionals.
Call Smartline Rockingham to learn more: (08) 9527 1800.