REAL ESTATE STRATEGIES - THERE'S ONE FOR EVERYONE

by Dwell Building Services | Jul 28, 2021 | Invest

Using real estate as a wealth strategy is a well-trod path, and not a particularly new one. Being a land-owner is historically the best method of wealth creation. But if you don’t currently have money literally falling out of your pockets, what are you supposed to do? Where do you start?

There are different strategies associated with real estate investment, and they suit different people with skill sets. The trick is to recognise your skill set and work off that.

Set the Scene for Success

To successfully buy real estate you need a good team around you - by that, I mean a good mortgage broker, conveyancer and accountant. You could even look into engaging a buyer’s agent or making contact with local real estate agents if you know the suburb where you’re keen to invest.

You also need to have about a year of good income behind you and healthy money habits. If you haven’t started off on the best foot, read a few good books to research the subject (Barefoot Investor, Rich Dad/Poor Dad - there are so many). Then make a realistic budget and stick to it for a year.

No matter what the property market is doing (going up, going down, going nowhere) there will still be properties to buy next year so don’t feel discouraged at the delay, you need the good habits and history more than you need to jump in now.

A fair bit of research can be done while you’re building your financial muscle.

There are a lot of books on property investment which are specific to Australia. There are also a fair few resources that are free online such as podcasts and Facebook Groups. It’s a very good idea to immerse yourself in this sort of property talk before jumping into anything. You don’t know what you don’t know until you’ve had a bit of experience, and these learning opportunities can give you information without having to risk anything yourself.

Work out Your Strengths

Finances:

If you have a consistent and strong income you might want to look into buying a property in a suburb with strong rental prices. Things to consider there are: Can you manage it yourself or do you need a property manager? Do you want to be involved with a body corporate or should you try to buy a freehold property? Have you considered commercial property? If you can find a property with a larger block size, maybe you can get a secondary dwelling/granny flat on there and increase your rental return?

Skills:

Are you handy and to what extent? If you’re very handy or come from a family of tradies, you could look into renovating. Maybe you could invest with a close friend or family member in order to half the costs/efforts?

Do you have experience with paperwork, researching or the ability to wrangle Council Approvals? Maybe subdividing is for you? In that case you’ll need to research the different local area rules, make enquiries with Council and read as much information as possible made available on Council websites.

Depending on who you are and what you’re good at, you will start looking for different types of property.

House Hunting

Once you’ve worked out your strategy based on your strengths and research, let the hunt begin.

Decide on your budget, your suburb, your specifications and then get going. It’s worth mentioning at this point that you’re investing - not falling in love. Don’t get stuck on attractive features or flash suburbs. It’s usually the ugly ducklings that make the best gains over time and if you’re buying in an already popular area, you’re probably not getting a “deal” (see Burleigh Heads and Byron Bay).

This can be a long process with a lot of searches and prospects that go nowhere. If you don’t have much time or get discouraged by dead ends, this is where you would get a buyers agent in. Give them the brief, get quite specific and let them go for it.

Commit

Once you’ve found the property, commit. Don’t get overly emotional about the purchase. Do not pay more than your calculations tell you is your maximum and do the deal.

Congratulations! Your property investment journey has started!