Successful real estate investors operate on similar philosophies that help them grow their wealth through a portfolio of properties, and these can provide valuable lessons for first home buyers.
Various investors limit their risk by diversifying investments in different cities and suburbs, and they will hold a variety of property types, such as apartments and detached houses.
When they set out to build their portfolio, the most successful corelate all their decisions with a goal to build their personal wealth, a game plan to achieve that wealth and a time frame by which they want to accomplish it.
Regardless of whether you are looking for your first home to live in or investment purpose, having this mindset can be a strategic and powerful way to view your property purchase.
Smart investors conduct their own research on various property types and the suburbs they have targeted for investment.
Similarly, top investors will always seek advice from professionals, such as a builder, a real estate agent, solicitor, and mortgage broker. Armed with their knowledge and resources they are better able to resist the emotional purchase to avoid one of the most common mistakes and fears of paying too much.
By doing this homework, investors understand thoroughly how long it is likely to take for the property to produce a return and the kind of capital growth they can expect.
Ways to avoid risk is to have your budget firmly in place, asking questions, doing your homework with a mortgage broker who can help you assess what you can afford but also put the finance in place in advance of any purchase.
Long term wealth accumulation requires investors to look for insights that signal a suburb is a high-demand area. Solid signposts for these areas include planned government infrastructure projects, demographical change and iconic residential developments.
Even with all this knowledge and confidence, smart investors mitigate their risk.
If a purchase is reliant on an income, then they will take out wage protection insurance. Where a property is to be rented, insurance for potential rental property damage is an essential. As a first home buyer you should consider insurance options that will help you pay your mortgage should you become ill or out of work.