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When should you buy an Investment Property?

Possibly one of the leading questions you’ll think of before taking the plunge with property investment is, ‘When should I buy an investment property?’

This probably precedes the, “what, where and how” questions that every investor looking to buy an investment property has.

Firstly, if you haven’t already started property investing you need to decide whether it’s the right strategy for you, and if it fits in with your risk profile. You don’t want to buy an investment property if it stops you from sleeping at night.

Ironically, many, ‘high-risk’ investors wouldn’t want to buy an investment property because the rewards don’t happen fast enough. However, the famous business magnate George Soros once said:

“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.”

And this is generally the nature of property investment. If done in a considered, strategic way, it tends to be a slow rolling juggernaut that grows exponentially over time. And this is a clue as to when you should buy an investment property.

There’s a famous saying in the property industry that goes, ‘When was the best time to buy property? Twenty years ago! When is the second best time – today!’

So, when would it be the wrong time for you to attempt to buy an investment property?

Here are a few examples:

  • When you’re unemployed
  • When you don’t have equity/cash or the serviceability to access finance
  • When you have a huge financial commitment pending (ie upgrading your house within 12 months)

But what if you do have a job, you’re not under any major financial strain, you can get finance,  but you’re worried about job security? Well unless you know for sure that your place of employment is closing, this is probably one of those, ‘what if’ scenarios that can endlessly run through your mind, and stop you from taking action.

Here are some other common fears:

What if interest rates go up?

What if there’s a property crash?

What if I get sick?

What if I buy the wrong property?

What if I’ve left it too late?

Unfortunately, these ‘what if’ questions can paralyse your progress and could end up being the number one reason that you don’t go ahead and buy an investment property.  Even if you already have an investment property, these doubts can creep in to in to stop you from going to the next level.

Perhaps you’d prefer to, ‘wait and see what the market is doing’?

Trying to time when to enter the market is unlikely to help you decide when to invest, as you’ll be more inclined to jump in when there’s a stampede and it’s too late.

A, ‘wait and see’ approach in one particular market (most likely near where you live) can go on for years. In the meantime, you’ve missed out on capital growth in other markets in Australia – which is one of the main reasons property investment is so worthwhile in the first place.

So, how do we turn things around and know exactly when to buy an investment property?

Well, an important thing to recognise is that you’re not alone with these challenges. It’s advisable that you get some professional help.

Firstly, get a recommendation of a good mortgage broker, and find out how much you can borrow to buy an investment property. This should help answer any questions you have about housing affordability, which seems to be an obsession with our mainstream media.

Secondly, find a QPIA qualified property investment adviser who will be able to help answer all of your, ‘what if’ questions, and give you some clarity on why you’re investing.

Having a strategic blueprint, having considered your risk profile and produced a professional property plan, that’s tailored to your situation, will give you a massive edge over average investors, and certainty a clearer path to when and what to do next.

Even better, there are property professionals that can combine the QPIA adviser role with a property buyer’s agent service, so you can let them do all the hard work and buy an investment property that fits in with the long term financial goals covered in your property plan.

So, when should you buy an investment property? If you get the right help, the answer is simple:
When you’re in a position to have a lender offer you the money to do it!
Call us on 1300 077 766 or connect with us via email at info@adviseable.com.au if you’d like to get on with it.
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