When to buy your second investment property?
So, you’ve already purchased your first investment property. When do you start considering the next one?
At Worth Property Investing, we actually hear this question a lot. Australians love real estate, but there’s a difference between buying for the first time and buying again.
How do you know when you’re ready? What should you be thinking about when it comes to another investment property?
While your initial purchase is your first step towards growing your financial wealth through property, knowing what to do next is just as important. So, we have prepared this quick guide to give you some helpful information if you’re wondering about purchasing a second property.
Check in with your goals
First and foremost, before you do anything, you need to check in with your financial and lifestyle goals.
What are your plans now and in the near future? Are you aiming to build a rental property portfolio over the next few years, or do you want to live in your own home?
These are all important factors to consider when you’re curious about entering the real estate market again as an investor.
Purchasing a second investment property offers a lot of wealth creation opportunities, but that comes with a long-term mortgage commitment too, amongst other obligations.
So, if you’re thinking about searching the property market for a second time, just check to see how this aligns with your personal and financial goals.
You are mentally prepared
Acquiring your first property can be an eye-opening experience. You have to get used to the mortgage repayments, being a landlord, working with real estate agents, managing tenants, and so on.
While the second time around won’t be completely new, you still have to be prepared. If you find that you’re still coming to terms with everything and getting used to budgeting around loans, then you’re probably not quite ready yet.
However, if everything is smooth sailing, then you’re ready to start looking.
Your first property has sufficient equity
Equity is the difference between the current market value of your first property, and the outstanding balance of your loan on it. Your mortgage broker or lender can often allow you to access this equity to help you buy a second property by giving you finance against the amount.
If you have paid off a portion of your mortgage on the first investment property and/or its market value has increased, you may have sufficient equity that you can draw upon to help you purchase an additional investment property.
You’re financially secure
A second mortgage and a second investment property means double the costs to you, even with rental income. However, if you’re in a strong financial position, with a steady or increasing income and sufficient savings, then you have enough of a buffer to manage.
When you are financially secure, it means that if interest rates rise or any unexpected costs come up with any of your properties, you can afford them comfortably.
You are able to find the right property
Investing in real estate is always a risk, but there are a lot of opportunities to grow your wealth if you invest wisely in the right property.
Not all houses and apartments are the same, and knowing which option to buy can mean the difference between a profitable property portfolio and a mediocre one.
While it can be time-consuming, you should only consider purchasing another investment property if you have done enough research into the property market and identified suburbs and real estate that can offer you good returns on your investment.
To save you the time, and to find a specialist with expertise and experience in finding that ideal second investment property for you, you may want to consider using the services of a quality buyer’s agent like Worth Property Investing.
How can Worth Property Investing help you buy your second investment property?
At Worth Property Investing, we partner with you throughout your investment journey.
As your trusted licensed property buyer’s agents, our experienced team guides and supports your property investing education, so you can achieve your property goals sooner.
Worth Property Investing can help you find the right property to meet all your requirements when considering your next purchase. We use real facts, due diligence and solid research to locate the right investments, and we have a proven track record to help you succeed.
Become a VIP member and download our free TOP 10 PROPERTY INVESTMENT RULES e-book today
You’ll get all the essentials you need to understand the role solid research plays in achieving property success.
Don’t put it off any longer – contact Worth Property Investing today and start achieving your property investing dreams!