It’s no secret that property investment is the age-old and wisest way to build and sustain wealth. Of course, it’s not a “get rich quick” avenue, and it won’t make you prosperous overnight, but it’s a great way to grow sustainable income nonetheless – even in the face of a pandemic.
There are two ways to build income in property investment: potential cash flow through rental yield and capital growth.
At Latitude, we help everyday investors create wealth by providing quality, luxury and contemporary property investments. It’s possible for almost everyone, even without any prior experience.
Here are some of the best tips to begin building your own property portfolio:
Do your research
Knowledge is power! Before you begin your journey, you’ll want to learn as much as possible about real estate and rental property investing. Look through articles, books and find statistics based on location and the best ROI. You will learn as you go, but basic real estate knowledge will prevent you from making costly mistakes.
What kind of property?
Consider what niche you’d like to invest in – single-family homes, duplexes, triplexes, multi-residential units? At Latitude, we specialise in luxury units and duplexes for property investors. We have developments all over the Sunshine Coast and can help you find the perfect fit for your needs.
Get crystal clear on your goals
You’ll want to establish some clear goals for your real estate investment. What are your financial objectives? Do they centre around cash flow to earn a set amount each month? Or are they long term, based on capital growth? Once you know what you want to achieve, you’ll create a plan and determine how to use property investment to reach your goals. Once you’ve established your long-term goals, you’ll have a clearer sense of direction –and will be able to work backward, so to speak –taking steps to reach your goals.
Treat your property investment as a business
The best way to make money from real estate – is by treating your venture like a money-producing enterprise. Therefore, it’s essential to treat investing like a business–this means setting clear objectives, being organised, and building systems that allow you to work efficiently. Additionally –as time goes on and you begin to scale your investments, you’ll be thankful that you established a solid framework for your business from the start.
Don’t worry! You don’t have to rush out and buy a 30-unit complex when you’re first starting! Most investors start smaller –with a single-family home or duplex. Your first investment could even be your own home. Starting small will give you a chance to lay a solid foundation, allowing you to learn the ropes before jumping into the bigger investments, where there’s usually a lot more financially at stake.
Assemble a support team
While every day and first-time investors often feel they have to start alone, you’ll need a few key people in your team: An accountant – to help you manage your money and taxes, A financial advisor/mortgage lender (we recommend Loan Success on the Sunshine Coast) – to advise on the best investment loans, a construction company like us at Latitude who specialises in investment properties, and an excellent real estate property manager to help manage and maintain your property.
Run the numbers
Once you’ve found a property you’re interested in, run the numbers to ensure that it’s a good investment. A classic rule of real estate says that a rental should yield at least dollar for dollar. So if you have a property that costs $600,000, you should be able to try to get $600 per week in rent. Finally, you’ll want to add up your projected expenses –including the mortgage, taxes, insurance, utilities, maintenance, repairs, and unexpected vacancies –and subtract this from your income to find your cash flow.
Don’t quit your day job
Real estate investing can be an exciting time –but don’t hand in your resignation notice at work just yet! Once you have a few properties under your belt –and your cash flow begins to surpass what you’re making at work, you’ll be able to think about leaving.