{"id":2031,"date":"2022-03-04T06:48:36","date_gmt":"2022-03-04T06:48:36","guid":{"rendered":"https:\/\/royabhishek.in\/urbanbuyer\/5-telltale-signs-youre-not-ready-to-invest-in-property\/"},"modified":"2022-03-04T06:48:36","modified_gmt":"2022-03-04T06:48:36","slug":"5-telltale-signs-youre-not-ready-to-invest-in-property","status":"publish","type":"post","link":"https:\/\/royabhishek.in\/urbanbuyer\/5-telltale-signs-youre-not-ready-to-invest-in-property\/","title":{"rendered":"5 telltale signs you\u2019re not ready to invest in property"},"content":{"rendered":"

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One of the most common questions I get asked is \u201cWhen should I buy my next (or first) investment property?\u201d<\/em><\/strong><\/p>\n

\"BuyBut that question is pretty much like asking \u201cHow long is a piece of string?\u201d<\/em><\/p>\n

There are a lot of variables to consider.<\/p>\n

It\u2019s true, being a savvy investor is about timing.<\/p>\n

However, instead of trying to time the market, a smart tactic is to determine the right time for you and your own personal circumstances.<\/p>\n

A fast-moving market \u2014 like the climate we\u2019ve been experiencing post-pandemic \u2014 is encouraging a new generation of Australians to get involved in property investment.<\/p>\n

They\u2019ve read about countless property investors turning an eye-watering profit and they want in on the action.<\/p>\n

What is worth noting, however, is that many people entering at this point in the property cycle will not get the results they\u2019re hoping for \u2014 and require.<\/p>\n

Not all properties will increase in value equally.<\/p>\n

As a result, some wannabe investors shouldn\u2019t even get involved in a property at all right now.<\/p>\n

So let\u2019s look at 5 telltale signs you\u2019re NOT ready to buy.<\/p>\n

1. You haven\u2019t saved a large enough deposit<\/span><\/h2>\n

\"SaveThe reality is, you need money to invest in property and you might be surprised how much it takes to get the ball rolling successfully.<\/p>\n

If you already have equity then that is one significant step towards investing but the more you save, the better the financial position you\u2019ll be in.<\/p>\n

So, if you don\u2019t have the financial discipline to save a sizeable deposit before you get started, then maybe you shouldn\u2019t be borrowing money to get involved in investing.<\/p>\n

2. You don\u2019t understand how the property cycle works<\/span><\/h2>\n

Last year was a very unusual year for our property market \u2014 and property values increased in almost every location around Australia, and that\u2019s very unusual.<\/p>\n

Around 98% of locations across Australia recorded price uplift; most had double-digit growth and the value of many properties rose by more than 20%.<\/p>\n

However, moving forward, the various property markets will be very segmented, which is a more \u201cnormal\u201d property market.<\/p>\n

In other words, in 2022 the value of properties in some locations will rise strongly, some will increase in value moderately, properties some locations will languish as affordability becomes an issue and a few areas will experience falling property values \u2014 all based on local demographics, economics and supply, and demand.<\/p>\n

Sure, over the long term, well-located quality residential real estate does increase.<\/p>\n

But it is equally true that there are times during every property cycle when values stagnate\u00a0\u2014 sometimes for several years.<\/p>\n

Then, there can be short periods when the value of your property will even fall a little. It\u2019s just the natural way of every property cycle.<\/p>\n

Having said that, A-grade homes and investment-grade properties are typically less volatile.<\/p>\n

However, there might still be times when the value of these prime properties falls, even if temporarily.<\/p>\n

3. You don\u2019t have your financial house in order<\/span><\/h2>\n

Even if you have a sufficient deposit saved, you will still need to make sure your other financial ducks are in a row.<\/p>\n

There is no real point in having a deposit ready to go if you have significant debts in your name.<\/p>\n

\"InterestBefore even thinking about heading down the investment path, focus on reducing \u2014 or eliminating \u2014 your credit card, or store card debts as well as wrapping up any other personal loans.<\/p>\n

These all attract higher interest rates and will become financial liabilities in the future.<\/p>\n

Also, if you don\u2019t have a cash buffer (outside of the deposit) or you tend to live paycheque to paycheque then you aren\u2019t in the best position to be buying real estate.<\/p>\n

A financial buffer is vital for both homeowners and investors because life is full of surprises. And with impending interest rate rises on the horizon, you\u2019ll need to be prepared for increased mortgage repayments.<\/p>\n

4. You don\u2019t have a long term investment strategy<\/span><\/h2>\n

Real estate is not a get-rich-quick scheme.<\/p>\n

Attaining wealth through property doesn\u2019t just happen; it\u2019s the result of a well-executed plan.<\/p>\n

When you have a carefully considered and strategic property investment plan then you\u2019re more likely to achieve the future financial freedom you desire.<\/p>\n

By creating a Strategic Property Plan<\/a> you can define your financial goals and ascertain whether or not they are realistic, especially for your preferred timeline.<\/p>\n

With a plan in place, you can then measure your progress after you\u2019ve bought an investment property and see if you\u2019re on track to achieving your goals.<\/p>\n

It means you can easily gauge whether your property portfolio is working for you, or if you\u2019re actually working for it.<\/p>\n

A good investment strategy will also help you find ways to maximise your wealth creation through property and identify risks you perhaps hadn\u2019t otherwise considered.<\/p>\n

Ultimately, with a tailor-made strategy in place, you\u2019ll be able to grow your nest egg through your property portfolio faster and more safely than the average investor.<\/p>\n

5. You don\u2019t have a good team around you<\/span><\/h2>\n

\"DreramProperty investment is a team sport.<\/p>\n

To really succeed, you\u2019ll need a good property strategist<\/a> to help you define your plan, an accountant to help you legally minimise your tax, a trusted solicitor to assist you with asset protection, and a buyer\u2019s agent to guide you into choosing the right property.<\/p>\n

If you\u2019ve read through these telltale signs and realise you might not be ready to buy right now, but you\u2019re still passionate about investing in property, here\u2019s how you can get ready.<\/p>\n