Getting into the property game is something that many of us want to do as soon as possible. It is a move that marks us as adults and actually doing something (hopefully) profitable and productive with our lives. But with so much hype about current Melbourne property sales and trends, it can be hard to know exactly where to start. Here are some of the absolute basics that should help to form a foundational understanding.
The first tips that you will see everyone talking about time and time again is to always know your budget, and to know your investment goals. Firstly, you budget isn’t just about knowing how much money you have in the bank. Effective budgeting involves keeping a close eye on all of your incoming and outgoing payments, making sure you keep a steady cash flow, and of course have some spare in case of emergencies. In fact, many money experts encourage first timers to keep a certain amount aside, perhaps five percent, and consider the remaining 95% as your full savings. The trap that so many property amateurs fall into is that they overstretch themselves and fall into debt. Sure, this rule is not necessary for seasoned investors who know all of the obstacles of the property game, but until you gain some insight into this complex world it doesn’t hurt to have an extra hand up your sleeve.
Investing in property is all about making fast money right? For some people it may be. For others it is about minimising risk and earning reliable but minimal income over a long period of time. For other big time investors, they might simply invest interstate because of the tax breaks. It might seem blatantly obvious, but make sure you’ve said your investment goals out loud, especially if you’re buying with a partner. You may be surprised at how often the assumed property goals of two people go separate ways. Be realistic with your goals as well. If you buy in a cheaper city fringe location that you are hoping is going to grow in value, you cannot rely on a boom. It would be nice certainly, but you cannot stake your life savings on an event that is not certain or even highly probable.
One of the best tips for those who are young, ambitious and able, is to do the bulk of the renovations yourself. Now, obviously there are somethings that you will not legally be able to perform, and some that will be physical or skill barriers. However, if you have some time off of work, then this is the perfect time to start learning. A project that involves your own blood sweat and tears will no doubt be more rewarding, not to mention saving a bucket load on trades people. Besides, young people have that endless vitality and energy that everyone admires us for, and in a first time build this extra energy supply is going to be needed. One risk of this approach is to start building and styling with your heart and not your head. Keep things simple and cost effective. Also have a realistic idea in mind of the amount you can hope to receive at the end, to stop you from getting too attached or overspending on the little things.
Finally, never underestimate the value of a building inspection. If money is the barrier, cut costs elsewhere; this step is vital. A few hundred dollars could alert you to the deal breaker that would have cost you tens of thousands in repairs. So start browsing some of the promising Melbourne Property Sales Listings on Bid Rhino.