Knowing when to buy a rental property isn’t just about market timing.
Investing in property is a big step, and it pays to consider if you’re ready to become a landlord. Here are several signs that you’re ready to invest in the property market.
You have goals in mind
Any investment decision should be based on personal goals. Knowing, for instance, whether you’re aiming for long term capital growth or regular rental income will help you decide the type of property and location that will help you achieve your goals.
You understand what’s involved
If you’re already a home owner you’ll have a good grasp of how the property buying process works. However being a landlord involves a lot more than being an owner occupier. Strict tax rules and legal obligations apply, and it’s essential to know your responsibilities to enjoy successful property investing.
You’re financially ready
It’s not always necessary to have a large chunk of cash to get started as an investor. If you’re a home owner you may be able to use home equity as a deposit in lieu of savings. Lenders will still check your income to be sure you can handle an investment loan, though remember, your investment property will generate rent which is money that can be used to help with loan repayments.
Lenders will also want to see that you can cover costs like repairs, maintenance, insurance and rates or strata levies, or handle the loan during periods of vacancy.
Now… wear out some shoe leather
If you’ve ticked all the boxes so far, it’s time to inspect the market. Think like a tenant – it’ll help identify properties that will be a good investment.
Look for low maintenance homes in good condition (tenants don’t want fixer-uppers) preferably with off street parking or garaging. Hone in on suburbs with public transport, plenty of local amenities and nearby employment opportunities.
If you can tick all these boxes, chances are you’re ready to invest! Contact your local Aussie Broker for details on getting started as a landlord.