If you're thinking about entering the property market but don't know what you should be considering before investing in Australian commercial real estate, this guide will help you to better understand the process and considerations involved in building your investment portfolio.
A number of CrowdfundUP's investors are just that - first time property investors looking for their entry point into the property investment market. Here are some tips to get you started.
Must-know tips for property investment advice as a beginner investors here. There are 11 tips you can take as you get started to minimise those mistakes. Before you even start considering investing in Australian property, make sure your credit is as good as it can be.
Make sure you’re starting to invest for the right reasons and for an end goal that you have established for yourself. Identify why you’re looking to start your property portfolio and what you want to achieve with the investments.
While property is historically Australia’s most profitable asset class, it is affected by changing market conditions and while sometimes the market is doing well, this doesn’t necessarily mean this trend will go on indefinitely. Make sure you have an understanding of market trends, predictions and view investment property and suburb performance data to help you find where to invest.
While some investments into property assets will be short term, there will also be investments that are long term. Ensure that you have an understanding that sometimes returns won’t be received in the near term and you might have to stick it out for a few years.
Set yourself a certain budget for investing in property and stick to it – this ensures you are not living outside your means as well as ensures you are sticking to a certain investment strategy. Overall, this means that before you can work out how you are going to create your ideal financial future and move forward, you need to get an understanding of your current financial position.
Sticking to a budget will help you understand where and how you spend your money, so it’s a great idea to start budgeting even before you start looking for an investment property.
The best part about investing in real estate online is that you can find, review and invest in property Australia-wide, and in different asset classes. Diversifying your portfolio is important and while you might not be able to do so at the get-go, it’s important to remember this as your portfolio grows. Diversification enables some form of protection against changing market conditions as well as for both short term and long term investments to be a part of your investment strategy.
Before you even consider investing in property, you need to get a handle on your personal budget. List all of your assets, income and expenses and then gain an understanding of how much you can afford to borrow to invest.
It is important to set your financial goals so that you have a clear idea of your milestones are and why you are property investment planning in the first place. Deciding on a deadline as to when you want to achieve your goals which will also help you work towards achieving your goals with purpose and clarity.
These charges vary with states and territories, so make sure you check out the tax details associated with the investment purchase beforehand.
Most of the properties that have high value in terms of investment are located in large cities of Australia, particularly in cities such as Perth, Sydney, Brisbane and Melbourne. You might want to invest in properties located in areas from where amenities like schools, public transport, parks, etc. are easily accessible.
Education is key to your success in investing, so it would be useful to attend some property investment or capital growth seminars and courses to gain an understanding of the basics of property investing and wealth creation.
Fractional investment platforms such as CrowdfundUP allow investors to invest with low minimums starting from $1,000.
These platforms are the perfect opportunity for first time investors, and those with smaller amounts of capital to invest.
Property crowdfunding works in much the same way as other crowdfunding platforms, but instead of investing in an idea, or a social movement, you're investing in property assets such as residential buildings, hotel developments, commercial buildings or shopping centres.
Once submitted and approved via the due diligence process, property projects are listed on the platforms for potential funders to review and invest in.
Real estate crowdfunding platforms offer investors network unique online property investment opportunities from around the country and at differing investment amounts.
Property crowdfunding simplifies commercial property investing and giving user-friendly access to a wide range of types of investment option with the potential to generate passive income.
Cashflow investing refers to investing in property development projects which are intended to produce cashflows over the life of the project: either in the form of interest payments, or dividends.
Ultimately, investing in commercial real estate through crowdfunding has both pros and cons, and whether it is a good idea for you depends on your personal financial circumstances, your financial goals and the amount of knowledge you have (or the amount of mentorship you have) in the commercial real estate arena.
CrowdfundUP is an investment platform that allows people to invest in Australian real estate with as little as $1000. You can start Investing in Australian commercial real estate via our short term or long term investment opportunities here.