If you have extra cash on hand, one of the wisest things that you can do is to save it as a time deposit. That way, you will never be allowed to touch the fund for a specified number of years.
Better yet, you can use the extra cash to invest in something worthwhile. In Australia, one of the domains where return on investment is fast and sure is real estate. Start buying houses or spaces, one property at a time. If you know how to manage your first property well, you won’t even have to spend a portion of your savings when you purchase your subsequent properties. You can just use your earnings from renting out your first property to pay for the second one.
Now, if you are first-time property buyer, and you have plans of turning your venture into a multi property investment, it’s really important for you to get your first property right. Read on to know how you can make your first property investment work for you.
Choose a property in a place where the working people are
Frankly, if you want your property to earn, there is a need for you to be near people who have a steady supply of cash. These people are of course those who belong to the working class. It’s not the most glamorous, but consider those properties that are near business districts. People will surely be scrambling to get your space so that they can afford the comforts of living near where they work.
Of course, you have to be very mindful of the types of workers that you are targeting. Those who earn more can, of course, afford more. If you are surrounded by minimum wage earners, then offering luxury is not really a great move. But if the workers that surround you are those who belong to an obviously vibrant industry such as IT, then you can take the risk and acquire something a little bit more upscale. There is a very big possibility that in time, the wages will rise to a level that allows the workers a little bit more comfort and style.
Get the property that is relatable
Today’s culture puts a lot of premium on freedom of expression. As result of this, more and more properties are becoming so customized that they become functional only to the person currently occupying it. As a first-time buyer, stay away from customized properties. You surely do not have time and money to transform it into something easily recognized by your would-be renters. Again, you are targeting workers, and you cannot expect them to be into customization and all those things. At best, all they want is a decent place to stay. Give that to them and you won’t have problems with inward cash flow later on.
Get ready to do some property management
People often treat rents as passive income for the owner. However, ‘passive’ is really one of the last adjectives that you would use to describe the whole renting process. Your first property might be in a good location, but it will still be nothing if you don’t work on it. Homes do not just market themselves. Properties do not fix themselves when broken. And sometimes, renters do not just go knocking on your door with their hard-earned cash on a silver platter. If you can’t step up to take care of repairs, marketing, and rent collection, it’s best that you get a property manager. This additional person is going to be a good investment since a time will surely come that the number of properties in your portfolio will grow.