Building in wealth off the bat of the property market is not for the back-seat rider.
As director of Caifu Property, Drew Evans, shares with Your Investment Property magazine editor Sarah Megginson, it’s essential to adopt a proactive mindset at the beginning.
“It’s all about being able to buy under market value and then add value,” Evans shares.
“To be successful, you want to invest in real estate that’s going to provide enough cash flow that doesn’t impact your after tax cash flow, and doesn’t impact on your lifestyle.”
However, there are also high stakes involved when it comes to purchasing your first investment property, and a number of other influential factors that come into play, which will not only determine the investment process, but above all, the end outcome of the capital that you put into a deal.
So how do you know whether you are ready to invest? And how much cash or equity do you need to have in hand to begin?
In this video interview, Evans sheds light on these questions and more, including how income and access to funds – also known as your borrowing capacity and borrowing power – are two of the most important determiners.
“The next thing it comes down to is what type of property are you actually investing in. Is it postcode specific? Is it a house? Is it a unit? Is it a development? There are quite a lot of different variables when you ask that question,” Evans says.
“You can get started with as little as $45k to $50k, to get access to instant equity deals.”
It’s also important for the investor to be clear on their goals and their strategy, and how the market is likely to respond when tested under certain conditions.
Being financially prepared for when the tables turn can help to minimize some of the potential risks that are often served to an investor in an ever-changing market.
“When you purchase in real estate, it’s really important to understand exactly how you are making your money, not relying on external forces such as time,” Evans explains.
To find out about what’s involved when purchasing your first investment property, and the dynamics of the process, watch Drew Evans’ full interview above.