With 10 years of investing in real estate and 6 properties under him, A9 Property director, Thiago knows a thing or two about property investing. Investing in this market is a big decision to make but one that can be very financially beneficial down the track.
Wealth through property does not happen overnight. It is a long-term process which requires research, resilience, patience and comes with as many pros as it does cons if not done properly. To walk this path, you’ll need to invest in yourself before you start to invest in the property market, as becoming property savvy is key for success and will prepare you for both the good and bad times.
With low interest rates and rising house prices - it is no wonder people within the Australian market are making the decision to invest within the property space. The growth of the population is outstripping homing supply which means there is much more demand for housing development and as the population rises, more and more houses will need to be built.
Successful investors have strategies in place and are prepared for downturns in the market to avoid shortfalls in payments. They are also very vigilant about what and where they buy and immerse themselves with people who are in the same mindset as them and study everything they can about property and finance. It is important to surround yourself with like-minded people, research as much as you can, attend seminars, and create friendships with accountants, financial planners and mortgage brokers. Find out everything you can before diving in.
In a world of instant gratification, there is pressure for instant results and overnight success - especially due to the countless TV shows on renovating and real estate. However, reality is very far from this. If you’re looking to get rich overnight, then property investing might not be the best option for you. If you understand that investing in property is a long-term process, then be prepared to reap the benefits down the line.
People who invest in the property space know that it may be awhile before they see results and normally have a 5-20 year plan that follows. Successful property investment is all about good research and timing and can be a great long-term wealth strategy. If you understand the cycle of the property market, you’ll know that it will take some time before you see any kind of traction. If you are prepared to hold onto your property for more than 10 years, the more likely you will be able to ride out the property cycle and see the creation of personal wealth over time.
As well as added capital and growth of your property portfolio, investing in property can be very tax effective and provide the best leverage levels compared to other asset classes (banks will lend you up to 95% of the property value). Residential properties which produce income have been considered one of the best ways for financial independence, but as with any investment, there is always a risk involved. However, risk is decreased at the same pace as your knowledge grows, so make sure you invest in your knowledge and immerse yourself into a learning mindset.
Property is an imperfect market and you must be prepared for the ups and downs. The best way to be prepared is through learning as much as you can as it is not uncommon to get stung by unexpected costs, bad returns or stressful renovations. If you get hit by a bad market, you can get back up quicker than others with less knowledge than you. When looking to buy, always consult your accountant, mortgage brokers, town planners, or an independent real estate agent. The more you know the better, and learning during the process will help decrease fear and risks. Property investment is about investing in yourself. Learn and apply everything you can today to prepare you for great financial success.