Demand is still there, supply is still there and right now, it is money that is tight due to recent bank restrictions.
However, if the golden rules are followed, such as investing for the long haul and not committing to more than you can afford, property is a fantastic option.
Here are BUSINESS buddy‘s four tips to successful property investment.
Property investment tip one – Create a property strategy
It is important to treat your investment property like a business and every successful business has a business plan.
What do you want to achieve?
A property strategy allows you to establish why you want to invest in property and set goals.
For example, you may intend to buy high cash flow properties and replace or supplement your current income.
Or perhaps you have a plan for retirement, which involves investing in property with good, long-term capital growth prospects.
Either way, creating a strategy with your business advisor is crucial.
Property investment tip two – Don’t overstretch your finances
As with ordinary home loans, lenders look at what you can afford to pay when borrowing for an investment property.
If you overcommit to an investment, this can have dire consequences on your business and your quality of life.
Exactly the opposite outcome to what your investment was intending to achieve.
Property investment tip three - Pick your investments carefully
Although there are several different types of investment properties, it’s important to remember that cash flow is king.
Commercial real estate, holiday rentals and renovation fix and flips can be superb investments and generate huge returns, but they come with increased risk.
Should the property market soften, or your properties experience higher-than-expected vacancy or credit losses, you could find yourself unable to maintain higher mortgage payments.
If you are unable to make the monthly payments, your investment is in jeopardy.
Generally, long-term residential rental investments provide less risk and increased financial stability.
They generate a steady income stream and in time a substantial retirement nest egg.
Property investment tip four - Establish a great network
To really succeed in property investment, you need to get the right people in your network.
It’s essential to have a great accountant and business advisor, bank, mortgage advisor, lawyer and real estate agent.
BUSINESS buddy has all the contacts you need from Kaitaia to Queenstown to establish a thriving network.
BUSINESS buddy director, Jatin Patel explains about his experience in property investments.
For a free one-hour property investment advice session call BUSINESS buddy on 0800 283 399.