I have to admit, I couldn’t wipe the smile off my face after hearing from Kath with her burning question this week!
It wasn’t Kath’s question that had me grinning – it was her self-description as a “demon budgeter” that had me cheering!
Here’s what Kath had to say:
“I’m a self-employed single parent of one. My ex was scared to borrow money and was bad with it, but I’m a demon budgeter – so once our financial separation goes through, I’ll have about $150,000 in the bank.
I have no other debt and want to purchase an investment property that pays for itself. I was going to invest in Geelong but I’ve now read your book, ‘59 Biggest Mistakes Made by Property Investors and How to Avoid Them’, and I’m not sure that’s the right move. Where do I begin?”
First of all Kath, I want to say congratulations on having such a passion around your financial situation. I mean it when I say that getting your head in the game in terms of budgeting is half the battle. If you are indeed a demon budgeter and you have no bad debts standing in your way, then you’re starting out with a fantastic foundation on which you can build your wealth.
Now, you want to buy in the next six months, and you’re looking for something that is neutrally geared to positively geared.
My advice to you at this point is to get educated – whether you’re a single investor or you’re in a couple; whether you work for an employer or you run your own business; or whether you have kids, or you don’t have dependents to factor into your decision making. Either way, an education is essential to your success.
Start learning as much as you can – because I’d hate for you to buy in Geelong, or anywhere else for that matter where you think it’s going to deliver and it doesn’t.
It’s time to learn as much as you can about the property industry, property cycles, drivers of growth and micro-market fundamentals, so you can learn as much about investing as possible – and buy the right property.
There’s a whole lot of information online for free or for next to nothing, such as:
- Blogs: From reputable sources – such as my blog!
- Podcasts – about property investing strategy and success.
- Books – these allow you to dive into the detail. They don’t have to be mine; anyone’s books that you resonate with, that can give you an idea of the next step for you, is great.
From there you may want to explore some data, such as Top 100 suburb reports from well-known and respected data sources, so you can gain an understanding of how particular suburbs are performing (and have performed historically).
The whole idea behind all of this is to get educated about property investing before you buy, so you have a strong strategy driving your investing decisions.
This is where many investors go wrong: they buy first and then think about their long-term goals afterwards.
It’s really much more effective if you do this the other way around. Think about your goals, devise your strategy and then think about what, where and when you want to buy your investment property.
To this end, you may want to take it to the next level and invest in some seminars and educational programs, where you can learn about specific strategies on how to build wealth through property and can keep you focused and accountable. Just make sure you qualify the educators you’re going to work with; there are plenty of ‘spruikers’ out there dressed up as educators, and their primary goal is to line their own pockets rather than to help you build your wealth.
Thanks again for your question Kath, it was one that I think many other readers will resonate with!
Do you have a burning question about property investing? Do you have any questions 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!