FAQ: Where to Start in Investment Property
Information
I have been asked several times about how to start, what are the first steps to investment property. Many people a vague notion that property investment is something they want to do, but donft know to start. Given you are probably reading this on a the Somersoft forum, I assume you have at least got this far, so well done!
So the question is: I want to find out more about investment property and if it is right for me? In is my honest advice to first start with education, build your knowledge about what investment property can and cannot do for you.
Step 1.
Thus I recommend for beginners to read 3 books before doing anything else:
Concurrently to reading the books I would be visiting some open-for-inspection houses in your neighborhood, donft buy, just take a look, ask the expected sale price, ask the expected rental return, this will give you some feeling of reality in comparison to the books.
Step 2.
After step 1 you will have a better idea if IP is for you, and who it could be used to form a part of your investment for your future. Ask yourself some mental "what if" questions; If the Hot Water Service leaks and I get a bill for $1200, and then the tenants run away in the middle of the night, would I panic or just deal with it? buy the new HWS, get new tenants? Bad things can and do happen when you tenant your property; the good stuff is the wealth it generates; so I recommend you prepare yourself mentally for occasional trouble, then when trouble happens you just deal with it, without pushing the "Panic-Sell" button. BTW trouble is not normal, I have found in general tenants are good people and pay the rent on time and take reasonable care of the property.
Since you are now interested and understand IP I recommend the following three action items.
Step 3.
Now you have graduated to status gEnd of the Beginning, Congratulationsh
Remember you donft need to know everything to start investing! Some people are too lazy to even learn the basics:- you can guess where they will be in 5 or 10 years!
OK, You are ready to go! What to buy, where to buy it, how much to pay, negative gearing , cashflow postive yada yada yada? :- you can read all about it in this forum, http://www.somersoft.com/forums . A word of warning; there is so much information you can be paralyzed by the options and opinions, donft worry about finding the perfect deal, get something 80% right for you! Another word of warning; there are sharks out there with the perfect tailor made investors dream deal ready for youc.be skeptical about anything/anybody who seeks you out
Many have found Steve Navrafs $286 weekend course excellent http://www.navra.com.au/courses.html
Related Forum Threads
External Links, Books and Resources
[size=-2] Last Updated By: Always_Learning on 2003/June/11[/size]
Information
I have been asked several times about how to start, what are the first steps to investment property. Many people a vague notion that property investment is something they want to do, but donft know to start. Given you are probably reading this on a the Somersoft forum, I assume you have at least got this far, so well done!
So the question is: I want to find out more about investment property and if it is right for me? In is my honest advice to first start with education, build your knowledge about what investment property can and cannot do for you.
Step 1.
Thus I recommend for beginners to read 3 books before doing anything else:
- More Wealth from Residential Property by Jan Somers
- The Seven Steps to Wealth by John Fitzgerald
- Real Estate Riches by Dolf De Roos
Concurrently to reading the books I would be visiting some open-for-inspection houses in your neighborhood, donft buy, just take a look, ask the expected sale price, ask the expected rental return, this will give you some feeling of reality in comparison to the books.
Step 2.
After step 1 you will have a better idea if IP is for you, and who it could be used to form a part of your investment for your future. Ask yourself some mental "what if" questions; If the Hot Water Service leaks and I get a bill for $1200, and then the tenants run away in the middle of the night, would I panic or just deal with it? buy the new HWS, get new tenants? Bad things can and do happen when you tenant your property; the good stuff is the wealth it generates; so I recommend you prepare yourself mentally for occasional trouble, then when trouble happens you just deal with it, without pushing the "Panic-Sell" button. BTW trouble is not normal, I have found in general tenants are good people and pay the rent on time and take reasonable care of the property.
Since you are now interested and understand IP I recommend the following three action items.
- Legal Holding Structure: One of weaker points of the above books is a discussion/understanding of the best holding entities for your IP, you may decide to buy personally in your name, however I would first recommend you buy the following book about investing thru a "trust", thus I strongly recommend reading Dale Gatherum Gossfs "Trust Magic" . OK it's $99 for a book, I know, I know, itfs expensive (for a book), but if you are serious about long term wealth via property investing, it could be $99 well invested.
- Finance: Ask your friends if they can recommend a good mortgage broker? Contact a couple of mortgage brokers and have a private discussion about your current income, existing assets and get a feel about your borrowing power etc. Can you get a Line Of Credit? There are a few on this forum such as Rolf Latham http://www.asapfinancial.com.au or Simon Macks
- Long Term Goals: Talk with your partner about investment goals; Janfs Somers book has some examples of realistic goals you could set yourself.
Step 3.
Now you have graduated to status gEnd of the Beginning, Congratulationsh
Remember you donft need to know everything to start investing! Some people are too lazy to even learn the basics:- you can guess where they will be in 5 or 10 years!
OK, You are ready to go! What to buy, where to buy it, how much to pay, negative gearing , cashflow postive yada yada yada? :- you can read all about it in this forum, http://www.somersoft.com/forums . A word of warning; there is so much information you can be paralyzed by the options and opinions, donft worry about finding the perfect deal, get something 80% right for you! Another word of warning; there are sharks out there with the perfect tailor made investors dream deal ready for youc.be skeptical about anything/anybody who seeks you out
Many have found Steve Navrafs $286 weekend course excellent http://www.navra.com.au/courses.html
Related Forum Threads
- http://www.somersoft.com/forums/showthread.php?s=&threadid=8756
- http://www.somersoft.com/forums/showthread.php?s=&threadid=6288
- http://www.somersoft.com/forums/showthread.php?s=&threadid=8995
External Links, Books and Resources
- More Wealth from Residential Property
- The Seven Steps to Wealth by John Fitzgerald
- Real Estate Riches by Dolf De Roos
- Trust Magic by Dale Gatherum Goss
[size=-2] Last Updated By: Always_Learning on 2003/June/11[/size]
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