Quitting your day job to become a full-time property investor is feasible, but only when you engage in thorough preparation. When you do things right, property investment will be a lucrative career that provides financial security now and in the years to come.

According to On Property Magazine Australia, around 7.9% of Australians own at least one investment property. If you want to add to that figure, how do you go about shifting from your current career path to one in property investment?

Scrutinise the Figures Before Making the Jump

It’s possible to use basic calculations that focus on your Return on Investment (ROI) to make accurate estimates. While creating these evaluations, always be mindful of the fact that changes to the property market can have an impact.

Let’s say you currently earn $50,000 per year and you target a 10% ROI on the money you invest. That means you’ll need to access $500,000 of financing, either through your current assets or via loans and mortgages. There are online calculators you can use to come up with the figures you need, such as the ones we offer.

However, according to Global Property Guide, ROIs for investment properties in Sydney don’t reach 10% all that often, and figures can fluctuate between areas. For example, you can expect around a 2.5% return in Darling Point if you buy a two-bedroom apartment, or 4.7% in Potts Point for a one-bedroom apartment. These figures illustrate the need to do your research before making assumptions about ROI.

Be Prepared for Getting a Loan

Once you know which property you need to purchase to produce an ROI that matches your goals, you need to assess how much money you can access.

Since getting a mortgage loan is a major financial commitment, you should be aware of the process as well as the other fees associated with applying for one. For example, you should prepare for loan application fees which typically range between $500 to $600, though that figure can be considerably higher, depending on the loan agreement. You may also have to pay for lender’s mortgage insurance if you can’t put in at least a 20% deposit for a property.

It’s interesting to note that the cost of servicing a loan is much lower now than it was over a decade ago. In March 2008, the average advertised standard variable rate was at 9.35%. In March 2018, that figure is at only 5.25%, which means now may be a good time to get one. Seeking advice from financial professionals or mortgage brokers is a great way to identify how much you can borrow—they take more information into account than simple online calculators. At Clever Finance Solutions, we’ll analyse your situation and help you get the best loan for your needs.

Right Property, Right Location

As the saying goes, it’s better to own the worst property in the best area than the best one in the worst area. Okay, so you’ll need to put a little more thought into it than that, but don’t underestimate just how important location is.

Take the Sunshine Coast as an example. The Queensland region has excellent prospects in terms of liveability, affordability, and employment, and is often hailed as the best place to invest in property in Australia.  However, if the Sunshine Coast doesn’t appeal to you, you can check out other locations while looking for the same traits.

When deciding on the right location, it’s also smart to choose one that has a higher likelihood of producing consistent demand and better property market growth potential. Some of the characteristics you should look for include:

• Business and employment opportunities
• Planned infrastructure development and services
• Access to public transportation and facilities
• Local population

Having these traits means that a location can attract enough demand not just today but also in the years ahead.

Find the Right Market Forecasts

Even when a property seems desirable right now, you need to look at market forecasts to see if this will still be the case in a few years’ time. Although market forecasts aren’t perfect, they are a much better alternative to taking a stab in the dark.

For example, according to BIS Oxford Economics, Brisbane will see a median property price increase of 13% by 2021, while Melbourne will see an increase of 6%. If you’re investing with a view of selling in the future, understanding which cities support your financial goals is crucial.

Get Help from the Experts

Getting the right funding to fuel your property investment strategy is an important step towards success. At Clever Finance Solutions, we’ll help you secure the loan that works best for you and make the application process as easy as possible. We have also built a solid network of professionals so we can guide you towards making the right financial decisions, especially in terms of purchasing property. Note that our services are available at no cost to you. Get in touch with us today; we’ll be happy to help.