Investment property can be a great way to
grow your financial success and even secure financial freedom for yourself where you don’t
have to work for money and you effectively get enough passive income that you can live
off, but how can you get into investment property and how can you get started, I’m Ryan Mclean
I’m from positivecashflowaustralia.com.au where we teach people like yourself how to
find and invest in positive cash flow properties all over Australia.
Today we are talking about some tips and things that you can do if you want to get into investment
property, tip number one is to set financial goals and I always come back to this in every
single video that I do or podcast that I do is that a lot of people so many people go
out and they look at property and they purchase property without setting financial goals first,
I don’t know what they want to achieve financially they don’t know what properties are going
to help them achieve their financial goals because they don’t have any.
By setting financial goals and understanding what you want to achieve then you are going
to be in a better position to then go out and to achieve financial success and to purchase
properties that line up with your goals, you can check out one of my videos on how to set
financial goals and more information on assets and liabilities and things like that.
Tip number two is to calculate your borrowing capacity, this is really simple to do, all
you need to do is to go into Google and simply type in what is my borrowing capacity or how
much can I borrow and what will come up is a bunch of links that are loan calculated,
and what these are is these are calculators that the banks have created for online use
where you can punch in your details, how much you earn, what your rent is all these sort
of things, and it will estimate what your borrowing capacity is, that’s the most simple
way to do it. If you want to get a more accurate statement
then I do suggest going into a mortgage broker which is a free service and they will help
you asses how much you can borrow, from lender number one you might be able to borrow maybe
$300,000, lender number two might be willing to lend you $500,000, they can be a great
variation of what each lender is willing to lend to you, by speaking to mortgage broker
you getting access to a large resource of lenders and they will be able to tell you
which one is best suited to you. Mortgage brokers make a commission when you
sign up for a loan generally it is a free service that they offer to you and when you
go and get your loan in the end if you go through them and then they going to get a
commission for their work, to keep that in mind they are commissioned based so don’t
just use and abuse them because it is free they need to be paid for their services eventually.
If you do go may be consider going through them.
Number three is t then go ahead and save your deposit, it is very hard these days to buy
an investment and to get into investment property if you don’t have a deposit saved, you don’t
have proof in saving unless you are getting a gift of the 20% deposit from a family member
or a friend or if someone’s willing to go and guarantor for you on your loan then you
are going to need to save some of your deposit. Now banks are looking for generally I think
it’s a minimum of three to five percent of proven saving and what this means is you can
prove that you’ve actually saved this overtime that it’s not just someone’s sum that you
got from someone else, the banks want to see that you have the ability to save money and
therefore the ability to pay your loan, if you start saving a deposit you could use the
first home buyers account I don’t know I they still active or you can just save it on your
own account, keep a separate account add to it on a regular basis and then you can then
use to show the banks that you’ve saved your deposit and obviously by saving a deposit
you then putting yourself in a position to be able to purchase a property.
If you don’t have a deposit it’s going to be very hard to buy a property, if you are
interested in buying a property with no money down then check out this video how to buy
property with no money or little money and you can see if some of those suit you.
Tip number four is to then go ahead and learn about property investing, I it’s going to
take you some time to save your deposit you may as well start learning about investing
in property while you are saving on your deposit, it’s not a great idea to a fully save your
deposit decide it’s time to invest and you don’t know anything about investing.
There are so many steps that you need to take and so many things that you need to consider
if you want to go ahead and invest in property it pays to start learning before you need
to know it, you need to know about financing, you need to know about researching the areas
you need to know about building and pest inspection getting solicitors or convincers there are
so many different things that you need to know about that pays to start learning.
I do suggest the book 0-130 properties in 3.5 years by Steve McKnight as a starting
point and that would give you a good overview about he purchased so many properties and
he also goes into all the details of the cash flow and things like that, it really gives
you a good overview and you can read things like Australian property investment magazine
or your property investment magazine or you can just go to positive cash flow Australia
watch more videos, listen to more podcasts or read some more articles.
Start building up your experience start building up your knowledge before it comes time to
invest. Tip number five is then to go ahead and get
approval, if you saved your deposit, you’ve set your financial goals, you’ve learnt about
property investing, before you go out and start looking at making offers on property
it’s a good idea to get loan pre-approval, you can do this through your mortgage broker
or you can do this through your lender of choice and basically what this means it’s
your pre-approved for loan based on cause of the evaluation of the property.
Your pre-approved but they will need to evaluate the property before they give you the money,
what this means is that you can move so much faster when it comes to making an offer and
buying a property because your pre-approved you just need to get that evaluation done
and then a few other things and yi0ur loan is then given to you, if you don’t have pre-approval
you then need to get through the pre-approval process which takes time and that could hold
you up from purchasing a property. Getting pre-approval ahead of time is a great
idea if you are trying to get into investment property.
Tip number six is then to start researching, we want to research properties and we want
to research the area, a lot of people will go out and let’s say they want to buy in their
local area but they will go and look on two or three properties and then make an offer
on one and purchase it but they haven’t done their research and they don’t know whether
they buying a property that’s overpriced or whether it’s a great deal and they don’t understand
whether or not the area is going to grow or what is going to happen there.
If you want more information on doing research in the area go into great deal in this in
the positive cash flow academy you can check out positivecashflowacademy.com if you want
to learn more about researching the area but I do recommend that you follow the 110,3,1
rule which is used by many successful properties investor and that is you look at 100 properties
and you might make offers on 10 properties, of those 10 offers you make maybe only three
will be accepted, and of those three that are accepted you will go ahead and purchase
one property. Rather than just going out and looking at
a couple and buying one straight away you want to do your research, you want to buy
the right property that’s going to grow and deliver the financial rewards that you seek.
Tip number seven is to keep calculating all of your expenses, don’t just assume because
your mortgage is $400 per week and the property rents is for $450 per week that your property
is going to be positively cash flowed because it’s probably not, there are a lot of expenses
associated with investment property that you need to consider before you go ahead and invest.
There’s a hug list of things from council rates to property management fees to insurances
and many other things if you want more details about that then you can check out my blog
post on the 20 different things that you can claim against your tax because that will give
you an idea of the expenses that you are going to have to pay or you can check out the advanced
property calculator which is over at positivecashflowtools.com and that will then allow you to punch in all
the numbers of all your expenses and then it will pop out the cash flow of the property
that is likely to generate, Make sure you go through when you do the financial
analysis on the property make sure you understand all the expenses before you go ahead and invest
because I will hate for you to go and buy a property only to discover that you really
can afford it. Tip number eight is to then take the leap
and go ahead and make some offers, go ahead and invest in a property and get started,
Robert Kawasaki whose the author of Rich Dad Poor Dad which is probably the number one
bestselling finance book of all time, he suggests that you go ahead and you start by investing
in smaller deals first before you bet the house before you bet everything you have on
one massive deal. Start with smaller deals to grow your experience
to maybe lose money on those smaller deals or maybe make a little bit of money and as
your experience grows then as an investor your chances of making money on each and every
deal goes up. There you have some ideas on how to get into
property investment, if you want more videos, articles or podcasts like this one then head
over to positive cash flow academy, if you want more videos, articles or podcasts like
this one then head over to positivecashflowasutralia.com.au or you can use the short link which is pca.im
which will redirect you straight to the website, until tomorrow which is when the next episode
is coming out stay positive. If you’ve hanged around this long, then that
means that you are a great supporter and thank you very much, if you are on YouTube and you
are watching the video then I do suggest you checkout this post right here you can just
clink that link and that will take you directly to the video and you can keep viewing and
keep learning with me and keep growing.