So you’ve bought your first family home, paid off some of the mortgage and may even have started to build up your savings again. You feel clued-up about the property market, and positive about your current financial situation. Naturally, you may be contemplating whether your next big financial step should be to buy an investment property. But can you afford it? Answer the following questions to find out.
- Have you saved enough to comfortably afford another deposit and mortgage?
Being able to make the minimum deposit and afford the monthly mortgage payments just make good financial sense. Before you make any major commitments do some research into the property investment market, and establish what kind of property you’d like to buy, what the minimum deposit will be and how much you’ll have to set aside to pay off your additional loan each month. Talk to your lender about the lowest deposit they can accept. Some may be willing to accept as little as 5% if you have a good financial track record. - Can you cut back on extras to build your cash flow?
Knowing exactly what your incomes and expenses are will help you determine whether you can afford to invest as well as the type of investment you can afford comfortably. Don’t fret if you don’t have much cash left over at the end of the month. It is very likely that you may be able build your cash flow by cutting back on expenses – being just a little bit more frugal when grocery shopping, or cutting down on take-away meals or utility usage can make a big difference. - Are you willing to start small?
Fortunately, investment property opportunities don’t just come in a one size fits all option, which means that even if your budget is limited you may still be able to invest in a smaller, but sound property development. You can start off in your own backyard with a simpler and more affordable house behind house or duplex development. - Have you considered investing with others?
If you have big development dreams, but don’t have the budget or experience to take on a major property development investment, then you may want to consider working with a team of investors. Not only can you divide the costs between the investment team, but also utilise and combine each member’s expertise and knowledge to make informed investment decisions which are more likely to succeed.
If you are looking for a property developer you can trust to guide you through the journey of making a successful property investment, then contact Ross North Developments today. We are one of the leading property developers in Perth, and our expert team of advisors, tradesmen and suppliers has the right experience and knowledge to help make your investment dream a profitable reality. Call 08 9431 8118 and talk to our development specialists to find out more about our property development services.
