An investment property can be an overwhelming prospect for many first time investors. Owning and investing in a property requires significant work and saving to ensure that you maximise your investment.

It may pay to observe the following tips:

1. Set your goals: what do you want to achieve out of your property investment? Why are you investing in property? How much money do you want to invest in property? Is this going to be a long term investment which you hold for 10 years or a short term quick growth strategy? Defining your goals will help you create a property investment strategy, a suitable budget and create foreseeable timeframes to action your plan.

2. Start saving: this may sound like common sense but analysing your spending habits will enable you to budget accordingly for your property. Create your long term savings goal and break this down into weekly spending budgets. Sticking to a weekly goal is far more likely to help you achieve your long term savings goal. When investing in property it is imperative that you account for all the hidden costs which arise. Ensure your budget includes the purchase price, legal costs, mortgage insurance and any renovation or maintenance costs.

3. Get pre-approval: speaking with a financial institution or a broker will allow you to find out if you qualify for a loan and your borrowing capacity. This is a crucial step before proceeding in your investment journey, knowing your borrowing capacity will allow you to refine your property search and set your investment goals.

4. Conduct research: before purchasing an investment property it is important to research the demographic and growth potential of the suburb. Key areas for investigation include: a suburb’s growth rate, employment rate, property price, property growth, vacancy rates and local infrastructure. Taking the time to investigate the core components of an area can provide you with valuable insights for long term growth and help estimate your rental return on the property. Speaking with property investors about their experiences and insights can provide you with valuable first-hand experience.

5. Stay focused: it’s easy to get overwhelmed with the entire process of property investment, but sticking to your plan can have huge long term benefits. Don’t forget the reasons why you started your property investment journey, revisit your goals and time plans frequently and most importantly stick within your budget!