Buying a home – The Great Aussie dream. Most of us want a house to live in, not to manage. However, a select few, something approximately like 20% of us, are intrigued by the investment advantages associated with property ownership.
Basically, the home is treated like a business. It’s maintained like a business, and financial decisions aren’t made to fill emotional voids – they’re made to increase rental income.
On the contrary, the majority of us reach a point in where we realise we want more freedom and flexibility within the environment we live in. We want to own pets, renovate and actually feel like we have something to show for our hard-earned.
Countless open houses and weekends at work to save for that hefty deposit is generally all worth it in the end – even after you’ve realised the enormity of your decision.
What is rarely acknowledged, is the key differences between buying your dream home for your family, and buying an investment property purely and purposefully to compound wealth.
Let’s take a look, shall we?
Investing vs. Occupying – The Key Differences
Buying a home means buying to suit you and your family’s criteria, lifestyle and other needs. Investment purposes prove that a property in hot demand that will increase considerably in value over the shortest time period possible is, quite literally, your best bet.
Put simply, property investment isn’t all about you – as opposed to buying your ‘dream home’. It’s about research, forecasting trends, analytics and dollar figures, all to be calculated and estimated to make a profit.
In most cases, it also needs to be looked at as a long-term investment. They call it ‘set and forget’ for a reason. But you’re certainly never going to forget about that mountainous mortgage attached to the house that you’re living in.
Two critical investment aspects that contribute to your success are:
- The current marketplace in which you’re buying.
- Potential future market trends.
The bottom line – emotions need to be set aside, actually, eliminated altogether.
3 Important Questions to Ask Yourself
1. Why do I want to buy a property?
2. Do I have financial, or personal goals?
3. How will a property affect me financially?
If you are looking into buying your first investment property, a general rule of thumb is to that inner city properties are in highest demand, hence increasing in value the quickest.
However, that city pad is going to be pricey, requiring a large deposit and even larger mortgage!
Research really is the ultimate key. Combined with some expert knowledge, preferably form a property investment advisor, making a winning, wealth-building decision should be a touch easier – hopefully.
But remember, ask yourself, what do I want this property to do for me?