How to Get Started In Property Investing

Set Wealth Growth Goals

The first step to successful property investing is to set wealth growth goals. What do you want to accomplish with your investments? This goes beyond growing wealth. Investment is always about growing wealth. Instead, this is looking at your current assets, the money available to you, and what you want your investments to do for you.



Do you want a high yield rental property to increase your income? Do you have time to sit on a property to watch its value grow? Do you want to grow your portfolio over time for a comfortable retirement? Your goals are at the heart of investing the right way, as it dictates the types of investments you need to find.

Consider Access to Further Funds

Although your investment plan is based on using the money you have in the bank, you might have better opportunities to access further funds through a mortgage broker. This doesn’t work in all cases and might not be for everyone. However, more capital is often the key to producing equity faster.



Be Open to Different Markets

Once your goals are set, you need to be open to different markets. Buying properties near you or in a specific location you’ve read about, is usually not the best strategy. Instead, you want to see where your budget will go the farthest, and where you can build equity the fastest.



To be clear, location is always key to property investment, but your preferences don’t come into play for a property that isn’t your home. As a result, the doors open much wider and the potential for your budget becomes much greater than focusing on one local area. You’ll have access to properties offering the best of both worlds: high rental yield and capital growth potential. Your choices become more strategic designed to help you meet your goals.

Depend on Data

Good investments depend on data, using a process and methodology based on your goals. With a sound process in place, your investment is more likely to get you where you want to go using a more direct route. The money you have available is the first number considered. Next, you can look at feasibility studies that demonstrate the best areas to invest with that amount, to see the highest returns. Data and market research provide numbers that don’t lie and allow you to predict more accurately which locations will perform best based on your goals. You can consider a few options and then decide which one sounds best to suit your lifestyle and help build wealth.



As mentioned above, you can also consider if it makes more sense to arrange for a small mortgage if it means your wealth can build more quickly. For example, if you want your money to start working now, high yield rental properties are the best option, but also require more of an investment upfront. If you have time to sit on your money and watch it grow, the right property and location might be in a different area where you can see the value grow or where value-added opportunities exist to either renovate or build to see even more equity.

Consider Value Add Potential

We’ve already pointed out you can spend more upfront for a high-yielding rental property if you want to see income now. However, if you are willing to put in a little more sweat equity, you can look for properties with value-add potential instead. Value add potential allows you to “engineer” even more equity in a property. These properties are more like projects. You either renovate with cosmetic improvements to increase the value of your property in a short period of time or invest in a property that you allow to increase in value over time and then subdivide or fully develop it to increase your returns substantially.

Value add potential creates an ongoing churn of money, so you are constantly taking things to the next level. You purchase a property at a lower price, make changes to build equity, sell that property and use the profits to continue the process over again. You have more control over how you grow your capital, and how fast you see the profits. Therefore, it can be based on short or long-term goals where you might balance your portfolio with properties you renovate with properties you hold onto. The market is assessed and reassessed, so you always know when to leverage the value add, and sell when the market tells you the time is right.

Keep Moving Forward

A forward-moving approach means you are always thinking about the next property to acquire. Your first property provides the equity you need to continue to build your portfolio. Opportunity is always ahead whether it is through profits made from a value-add project, or from the income you store away from your first high yield rental property.

You can focus on timelines to help you meet your goals, and decide how many properties you need to acquire to meet those goals. As a result, you are primed to make your next move when the market dictates. A plan that recycles equity to grow your portfolio miminises risks and maximises your growth potential. When you focus on moving forward right from the start, you are investing the right way to grow your wealth.



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