There is no question that buying property is a good investment to make. The decision to save and buy your first investment property is one that can set your family on a road to success and comfort. This article will consider why property is such a good investment and how to go about saving to buy your first one.
Why Invest in Property?
Investment is renowned for being the quickest way to get rich. Bankers and investors are, in the public eye, the wealthiest and most successful people. Generally, this investment is made into businesses, stocks and shares. This form of investment certainly is successful, but it is not secure. Market fluctuations can put millionaires on the streets, but with property investment, there are only minor fluctuations and a great deal of security.
Why is Buying an Investment Property Secure?
When you buy an investment property, you are buying something tangible. Any investment in stocks and shares means that you are relying on success that could potentially fail to occur, however, with a Sydney investment property, you are purchasing something tangible that will remain, no matter what happens.
In Sydney, and in Australia as a whole, the population is increasing at a more rapid rate than the housing supply. What this means is that your investment in property will provide you with something tangible, which is set to be in high demand for the years to come.
How Can I Make Such a Large Investment?
Despite having created more Australian millionaires than any other area of wealthcreation, many people still question how such investment is possible. Buying a home for your family is hard enough, but the idea of doubling this value is terrifying for many. Thankfully, the burden is not as great as it may seem on the surface.
Assuming, for argument’s sake, that you have paid a quarter of your mortgage on your family home, banks will be happy to lend you a second sum of money for another home. Either way, using the equity of both homes is considered to be a good investment. You can thus invest in a second property, with only a relatively small deposit.
How Can I Pay Two Mortgages?
The beauty of property investment is that to a great extent, you can make your money work for you. By investing $30,000 in a deposit,you can reasonably purchase a house worth around $200,000. Repaying this with interest may seem difficult, particularly with another mortgage, but you don’t have to pay it all.
The investment property can be rented out to tenants and they will, in effect, pay your mortgage for you. There will be costs that you will incur, but you can expect to pay less than a third of the mortgage payment for each month, ifyou have a tenant in the property.
How Can I Save?
Saving for the deposit will take time, but it is very much worth it. Putting your monthly or weekly wage into savings, as much as possible,will set you on the right track to making a successful property investment. Placing these savings into high interest accounts will greatly improve your position and increase the speed at which you can hope to invest.
Accruing whatever you have, over time, will always improve your position and bring you closer to investment, but remember to secure your savings to cover initial mortgage costs, whilst you find tenants and make any changes to the property.