There are a lot of steps you need to take to buy an investment property. Here are the 21 major steps to buying a investment property laid out for you in an easy to follow format.
What are the steps to buying an investment property? If you can understand the steps that you need to take to buy an investment property, then you’re going to limit the overwhelm you feel and you’re going to increase your chances of actually taking those steps and achieving your goal of purchasing your investment property. So in this video, I’m going to cover 21 steps to buying an investment property and these steps come straight out of my book, The Essential Guide to Buying Your Frist Property In Australia. Which is available on Kindle at onproperty.com.au/buy that will take you there.
So, let’s get in to the 21 steps. This is going to take you all the way through. From not even being ready to starting to formulate a plan and saving your deposit all the way through the looking at a house, making an offer and exchanging contracts and finally, getting the keys and taking ownership of the property, which is what we want.
So, step number one is to firstly, work out what you can afford. There is no point going out and looking at properties if you can’t actually afford to buy those properties. So the first thing that is going to limit what you can afford is actually the deposit that you have. Almost every lender at the moment needs to see at least a minimum of a 5-percent deposit in order to give you a loan for a property. So depending on how much of a deposit you have, you’re going to need at least 5% of that in order to purchase a property. So if you’re looking at a 0,000 property, then you’re looking at 5% of that, which is ,000 plus your expenses as well like stamp duty and so forth. So, first you need to work out your deposit ‘cause that’s going to affect what you can afford. And if you want to save the full 20% to avoid lender’s mortgage insurance, well, you’re going to need to save more money and that’s going to adjust what you can afford. You also need to consider your repayments and how much your repayments will be. Because, just because a bank might lend you the money or just because you have the deposit, doesn’t mean you can afford the ongoing repayments. So, work out what the repayments are going to be on a property. And you can do this by simply taking the value of the loan, and then timesing it by the interest rate. So, something like 5%. And that’s going to give you an annual interest repayments that you’re going to have to pay and then you’re going to have to add expenses on to that as well. So, just make sure that the property you’re looking at, you can afford it, you can have the deposit and you can afford the mortgage repayments and all the expenses that come with it.
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