However, a common question that often pops up in the minds of homeowners surrounds when the right time is to invest in a property other than their own family home.
If you're wondering whether you're ready to get started in property investment, here are four signs you might want to look out for.
Many people think that investing in property requires a lot of extra cash to cover a deposit. This isn't always true, as homeowners can often tap into existing equity in their home mortgage to cover purchase costs.
If you've had your mortgage for a while and have made regular repayments towards it, chances are you will have built up some equity in your loan. Alternatively, if the value of your current property has increased over time, it's likely your equity will rise too. Instead of leaving this equity to sit, you could use a portion of it to go towards securing another home.
Loan equity can be accessed through a simple mortgage refinance, but it's important to note there may be some fees involved. Remember to consider these costs to determine if they will affect how much you can contribute towards your first investment property.
Whether you've started a new, higher-paying job or experienced a large reduction in general living expenses, having more cash to play around with can be a sign you're ready to start a property investment portfolio.
If you don't want to use existing equity in your home loan, you might be able to save up your spare cash over time to cover the deposit for a home.
Instead of using your extra cash to splurge on other items, such as a new car, some furniture or a holiday, you could put your money to work for you and reap the benefits further down the line.
Another sign you're ready to begin your career in property investment is if you have specific financial goals in mind. From saving up money for your children's education, pooling together enough money to take an early retirement or to acquire another valuable asset, these are all clear goals that could be achieved by investing in property.
Before you purchase a property, it's best to speak to a mortgage lender about how taking on more debt might affect your financial situation. You'll also need to do some research into the property market to find a rental property that will help you to reach your goals.
For instance, if you wish to gradually accumulate wealth over a longer period of time, then you might want to look for a home that is located in an area with steady value growth.
As the amount of money required to live a comfortable retirement has risen over time, many Australians look towards a self managed super fund investment to provide for their future.
If you're nearing retirement and are looking for a way to create wealth, then investing in real estate might be a great strategy for you to use.
Typically, to run a successful self managed super fund, you'll need to have some savings in your fund in the first place, enough time to manage your fund and the knowledge to make financial and investment decisions for your fund.
Should this be an avenue you want to take for your financial future, make sure you obtain some sound advice to ensure you make a well-informed decision.
Tags: investing in property