Securing your financial future is about investing in assets which will help you become a step closer to financial freedom and investment property is a great way to do so. For those who are interested in investing, here are a few things to consider:

Equity matters

If you already own a property with a mortgage, it’s important to make some headway paying off some of this first, increasing equity. Once a good chunk has been paid off, this equity can be used to put a deposit down on an investment property. Picture this. Your current property which has a total price of $600,000 and mortgage of $220,000. This leaves an equity of $380,000 which can be used to put a deposit down on your house. Provided you have sufficient income, this is becoming an increasingly common method for investors to climb the property ladder. To find out more, discuss this with your bank.

Know your criteria

Each person has a different set of expectations when investing in property. Be sure to have a clear idea of what you consider important including the number of bedrooms, size of the backyard and condition of the paintwork. But don’t just stop at the house features. If you’d like the property to house a family, consider its closeness to parks and schools. In contrast, if you’d prefer to use your investment property as a flat, consider closeness to town, tertiary institutes and bus stops. A full open home checklist and tips to consider outside the property boundary can be found by clicking the links below.

https://info.propertybrokers.co.nz/open-home-checklist

https://blog.propertybrokers.co.nz/beyond-the-property-boundary

Consider whether it’s the right time

If you’re going to put a deposit down on an investment property, it’s crucial you can make the mortgage payments. While your current income may suffice, be sure to consider whether this steady income is fixed long term. Will there be any changes in living arrangements which see you struggling to pay the mortgage? If you’re planning a family, this may blow out your budget. This mortgage calculator can be a good starting point, before discussing your options and affordability with your chosen bank.

https://sorted.org.nz/tools/mortgage-calculator

Be prepared to spend extra

Knowledge is power. You probably did your research prior to entering the buying process and the more you know about the property, the better. However, it is common for extra costs to incur, especially if you’re purchasing a ‘fixer-upper’. Whether it’s small costs such as repairing the clothesline, or larger headaches such as replacing the roof, it is highly recommended for some extra money to be put aside to cover those extra maintenance costs that unexpectedly pop up.

Get preapproval

There will likely be several properties you consider investing in and several interested buyers. To ensure you can lock in the process, arrange home loan preapproval with your bank. Bank requirements can be a major speedbump, slowing down the house buying process. Required information prior to preapproval includes annual income, credit card debt, income and expenses. Once preapproval has taken place, evidence of these are required, as well as proof of identity, residency, a copy of the sale and purchase agreement, proof of deposit and the list goes on. A daunting list, at that. But best to start the ball rolling sooner so you don’t miss out on the perfect investment opportunity.

Communicate with your sales consultant

Your feedback as a buyer is crucial and will help you get the best results. Communicate and collaborate with your sales consultant, so they can find you a suitable property. Be clear about what you would prefer and ask any questions which spring to mind. Open homes and private viewings are a great opportunity to do so.

For any more information, contact me today. I’m always happy to help with your property purchase ambitions.