Investing in property is not as difficult or scary as it’s made out to be. Property is less volatile than shares , making it a stable investment, with plenty of tax benefits to sweeten the deal.

Despite all of the benefits, only 8.7% of the Australian population (or 2,097,392 people), own an investment property. According to ATO data, 6.2% of Australians own one investment property, while 0.08% own six or more.

If you’re ready to join the 8.7% of Australians investing in real estate, read our tips below to help you kickstart your property portfolio.

Set Goals

Start off by writing down your goals. What do you hope to achieve from investing in property? How large would you like your portfolio to be? Do you hope to retire in ten years and live off the income generated by your investments?

Once you have defined your goals, give yourself deadlines. After you have figured out a timeframe, break down your goals step by step. This will keep you from feeling overwhelmed and will make it easier to create a plan of action.

Research

Before you rush into a purchase, research the property market and keep your finger on the pulse of market trends. This will help you to find the right property and choose the right time to buy.

When you are looking at which area to invest in, choose a location where demand for rental properties is high. Also look at what developments are planned for the area. An upcoming airport or railway line could significantly raise the value of your property within a few years. On the other hand, a neighbouring apartment block could eliminate all privacy and leave you worse off.

When you have narrowed down a particular area, spend time researching recent sales to get an idea of what properties in the area are going for. This will help you to avoid paying too much.

It is important to avoid get-rich-quick schemes or any other deals which sound too good to be true. The only person getting rich quickly is them.

Funding

Decide where you are going to get the money to put down as a deposit. You could use your personal savings, the available equity in your home, or your superannuation .

You will also need to shop around for loans . Many investors choose interest only investment loans, but it is important to talk to your broker about this to ensure you make the right choice.

Your broker will also help you find out how much money you can borrow. It is important to get a pre-approval so you aren’t wasting time looking at properties you cannot afford.

Calculate Costs

Before jumping into anything, calculate the upfront and ongoing costs involved with buying a property. This will help you to work out what sort of investment property you can afford to live comfortably with. There may be more costs involved than you think, so do your research to make sure you don’t receive any unwelcome surprises.

Things to take into consideration are upfront costs like stamp duty , loan application fees and legal costs. Your ongoing costs will include insurance and council rates.

Even if your rental income is enough to cover these ongoing costs, make sure to have reserve money in case the house is vacant, or the tenants do not pay their rent on time. This reserve will also cover any unexpected bills. As a landlord, you will be expected to replace broken appliances and pay for emergency plumbing or electrical services.

Choose a Property

Choosing the right property is the most exciting and important part of the process. When looking at houses, make sure not to get emotional. Your purchase should be determined by the numbers, not your feelings. An investment home does not have to be the sort of home you would live in, or even be in the same suburb or state that you would live in. Ensure that the property you choose aligns with the goals that you defined earlier.

When looking at properties, pay attention to the features and location. Look for homes with good access to public transport, which are close to schools, shops, parks, hospitals and other community facilities. This will make it easier to find tenants and will likely equate to higher rent.

View Castle Group’s Home and Land Packages.