“Yesterday is gone. Tomorrow has not yet come. We have only today. Let us begin.”
― Mother Teresa
If you’re trying to get started investing in property then it is easy to be overwhelmed by all the information out there as well as how big of a step it is to buy your first property.
This often causes people to do nothing, which sucks.
I don’t want you to find yourself in 10 years owning no properties when you have dreams of financial freedom and a large property portfolio.
So here’s what we are going to do. We are going to break down the big giant overwhelming task of “buy a property” into the first few simple steps you need to take on the journey.
These steps won’t take you all the way to Meriton like millions, but they will help to get you over the hurdle of that first property purchase.
1. Set Realistic Financial/Life Goals
The biggest mistake new investors make is not setting goals
The second biggest mistake is setting goals that don’t line up with what they actually want in life.
It’s always better to jump into property knowing what your financial goals are. $60k/year passive income in 10 years allows me to look at properties with perspective.
If they line up with that goal they are considered, if they don’t then they are ignored.
I add the “realistic” part in because in 2007 I wanted to make $1,000,000 that year thinking that money would make me happy. Now in 2017 I want to make around $100,000 but work 5 hours a day and travel Australia with my kids.
Money and hard work doesn’t make me happy. Family, experiences and helping people through my work (eg. On Property) makes me happy.
2. Find Out How Much You Can Borrow
Skip the online calculators, they are shit and misleading.
See a good mortgage broker and find out what you can borrow. If you can borrow money get preapproval.
If they say you can’t borrow anything or what you can borrow is too low ask them “What do I need to do to be able to borrow more money?”
Then do it.
I’m putting “save a deposit” in here because it’s obviously something you need to do to buy a property. So I am assuming you already have a deposit…if not you need to save one.
3. Pick A Strategy
There a 10 bajillion ways to make money through property. Try and settle on a single strategy that suits your personality and your goals best.
For me that’s simple positive cash flow properties bought in good areas (see my membership for more about that). For you it might be something else.
Here’s 21 common property investment strategies to get you started.
The reason it’s good to pick one strategy is that it’s SO EASY to get distracted by a shiny new investment strategy that promises millions overnight.
People who are constantly changing strategies rarely achieve anything. It tends to be better to pick one strategy and stick to it until you see results.
4. Pick A Suburb
Once you’ve chosen a goal, got an idea of finance and set a strategy the next step is to choose what suburb you want to invest in. Ideally you want to narrow your search down to just a few suburbs but get to know them really well.
You want to find a suburb that has signs indicating steady future growth and you want to avoid suburbs with lots of what I called “red flags” or indicators that point away from steady growth. Eg. Port Hedland used to be a positive cash flow haven, but properties in that area have dropped 42% in the last 12 months. That’s a big ass red flag.
There are lots of indicators to look at when choosing a suburb. Too many to cover in this article. Check out my course Advanced Suburb Research for exactly what to look for and how.
5. Set Up Your Alerts
Once you’ve chosen on your suburb set up the relevant alerts for that suburb. You can set it up so realestate.com.au emails you with new properties in the area that fit your criteria.
You can use DSRdata to monitor the area.
It’s also a good idea to meet with the local real estate agents and let them know exactly what you’re looking for. Keep in touch with them throughout the year to remind them you exist.
6. Educate Yourself
Educate yourself on your investment strategy as well as the buying process. In my experience more education leads to more confidence and ability to take the steps required to buy a property.
7. Be Ready To Pounce
All of the previous steps have been to get you to a point where you are ready to pounce as soon as the right property comes along.
Often investing is a waiting game. You set your goals, get ready and sooner or later a property that meets your criteria comes up.
When it does you should be in a position to see it and buy it straight away. No point doing everything else if you don’t take action on this last step.
Believe In Yourself
Throughout this entire process believe in yourself.
Believe in your ability to buy property, spot the right suburb, talk to mortgage brokers and real estate agents.
Take it one step at a time knowing you have what it takes to make this happen.
I’ll leave you with a quote that has always helped me when I have been overwhelmed. It came from the best manager I ever had (back when I had a job). Thanks G!
“How do you eat an elephant. One bite at a time”
So go on. Get out there and take a bite of that elephant and begin!
Until next time,
ps. If positive cash flow property is your chosen strategy you’ll want to check this out.