There are literally dozens (if not hundreds) of ways you can choose to invest in property, so it’s not always easy for investors to know the ideal course forward.
Such was the case with Damian, who wrote in with his burning question this week to ask for some advice:
“Is it best to use a 20% deposit for investing in property? Is it better to buy a house and land, or off the plan? Should I buy a complete house and land package or buy land and then choose my own builder? Should I stay clear of off the plan altogether?”
One thing is clear from Damian’s question: he is considering a number of options and he has no clear strategy guiding him forward.
So, my first piece of advice is going to be: You need to become crystal clear on why you are investing in property in the first place. It all comes back to strategy.
Consider: What are trying to achieve in the first place? What’s the purpose? Do you want to generate immediate profits or are you investing for the long term, to build a retirement fund to fall back on?
Do you want to build a property portfolio or just buy a couple of investments?
The answers to these questions all come back to your individual situation, including your goals and your budget. Therefore, your answers will determine which avenue that you will take.
Generally speaking in my view, off the plan investments aren’t always the best value for money, although some house and land packages can be a solid investment. Whether you decide to buy a house and land package or purchase land and use your own builder is again another discussion about research: it’s imperative that you do your due diligence so you can see if the builders are reliable.
You may be picking up on a theme here? That’s right… it’s all about research!
I know I can tend to hammer home the same point over and over, but it’s because this point is so important. Research truly is the key to your success as an investor and it is my belief that extensive due diligence is what separates those who speculate in property from those who create wealth from property.
This research extends from the property market, to the suburb, to the builder, and to the rental market itself.
For instance: What are vacancy rates like in the area? And when you reach the point where you’re looking at specific properties to invest in: What do tenants in the local area want?
If they’re chasing new homes first and foremost, then a new house and land package could be the right way to go. Your research will show you the best way forward.
If you’re not sure where to even begin, we have a number of resources available to help you get started. The Blue Book, in particular, is a system of easy to use checklists and guidelines I developed, to ensure that I make the best decisions possible. I’ve fine-tuned it over the years and now I’m sharing it with investors like you, to assist you in making the best decisions moving forward.
Do you have a burning question about your potential or current investments? Are you unsure how to proceed with your mortgage, your tenants or any other aspects of your investing journey?
Do you have a burning question about your rental properties, your mortgage, or any potential investments you’re considering investing in?
To add your query to the pile, please click here. And look out for my 2 Cents reply in an upcoming episode of my 2 Cents Tuesday podcast!