Four Simple Rules When It Comes to Investing Your Money
Property is an important investment for thousands of Australians, with many planning to fund their retirement by creating real estate passive income. Sadly, many investors rely too much on investment advice from those least qualified to give it. If you have ever heard a good friend or relative say you can’t lose money in real estate, we suggest getting a second opinion.
The truth is, it’s easy to lose money with real estate investing, and many Australians have lost significant sums investing on poor advice. If you want to make sound investment decisions in the property market, you need good information. Here are four golden rules of investing your money in real estate that will help you build a profitable property portfolio:
1. Find a Reliable Property Investment Advisor
Profitable investments don’t happen by chance. Of course, you may get lucky. However, even those who strike gold by jumping into the property market on a whim would likely have done even better if they sought advice from an experienced property investment advisor.
Choose your financial advisor carefully, and don’t rely on fancy offices and expensive cars to sway your choice. Make your judgment on their experience, credentials, and the results they achieve for their clients.
However, experience and past results aren’t a guarantee you will reap the same benefits. You control where you put your money, so it will mostly come down to the choices you make based on your goals and how you invest. Nevertheless, good advice is the best way to increase your returns.
2. Know Your Reason for Investing
Anything we do in life has a reason, including real estate investing. Consider what you want to achieve with your investment. Are you developing a passive income stream? Or, do you want to create capital gains through appreciation?
Your goals for buying real estate will influence the type of advice you will get. Eda Property will help you create an investment plan that matches your goals. Of course, life can change and it’s critical to have some flexibility in your strategy in case you need to make changes along the way. However, it’s always a good idea to know the end game before you start.
3. Buy at the Right Price
There is a saying in real estate investing that says “you make your money when you buy a property”. Simply put, when you buy an investment property at the right price, you will make more profit. Quite often, the fair market value will be a long way south of the asking price.
At Eda Property, we nail down the fair market value through solid market analysis, which means checking out the recent sale price of investment properties in the area similar to the one you are considering. This way you won’t pay too much and will be in profit much sooner.
4. Know Your Strategy Before You Buy
We have tried all forms of property investing at Eda Property. We have developed, renovated, subdivided, and invested in short term stays. If there’s a property strategy we haven’t tried, it probably doesn’t exist yet.
Our experiences have shown us that your chosen strategy will determine how you should invest. For example, stating you want to invest in a rental property is not enough because there are many ways to invest in the rental market.
Maybe you want to buy a holiday house by the beach and rent it on Airbnb? Perhaps your goal is to invest in a family home in suburbia, or buy a property close to a university to create student accommodation? Whatever the case, never go into property investment without knowing what strategy you will use, and always choose one that matches your preferred investment style.
Investing in property can be extremely lucrative and provide you with the financial freedom you aspire to in your life. However, there is no shortage of pitfalls. As with any form of investing, if it was all too easy, everyone would be doing it. However, if you follow these golden rules of investing your money, you will go a long way towards securing your pathway to a successful outcome.