6 tips to get started in property investing in 2023
Looking for an alternative way of life than working full time, Branden tried his hand at property investing. He's now sharing his tips for others.
In 2018, Branden Sarafov took his first step into property investing.
Knowing that a life of working 9 to 5 wasn't for him, he had originally considered investing in the stock market. But his soon-to-be wife suggested buying property instead.
The suggestion turned out to be a good one. After almost 5 years, Sarafov now owns 7 investment properties.
While the second property was bought about 2 years after the first, Sarafov likens it to "a snowball rolling down a hill".
"The further it goes the quicker it becomes," he said. "Our first and second purchases required the saving of a full deposit which took quite some time. In the subsequent purchases, we were able to utilise equity in order to build our portfolio faster.
"It initially took 2 years between our first and second purchase. However, purchases 5 to 6 were done within a couple of months. I suppose this goes to show the power of compounding and how quickly the snowball can build up if you execute it correctly."
Despite the ups and downs of the last few years, Sarafov has implemented a strategy that has allowed him to remain resilient.
Recognising that "success leaves clues", Sarafov looked at property investors who had already achieved the results that he wanted.
Becoming that person now for other potential property investors, he explains some of his tips for those entering the market.
1. Research
As likely the most expensive purchase anyone will ever make, Sarafov said it was crucial to research and understand property investment.
"When I initially started I had 100 questions I wanted to be answered but didn't know where to start. I began by researching to understand property investment better and I also reached out to a number of people who had achieved what I was looking at doing. I also took everything with a grain of salt and when I began to see certain things from numerous credible sources, I would more than likely hold that thought or idea with greater validity."
2. Have a clear goal
Sarafov started out with 1 clear goal: to purchase a number of investment properties and then sell them as he saw growth. Although this goal evolved over time into a more ambitious one, keeping his goals clear in his mind was always crucial.
"Many people that I speak with today don't have a clear objective or goal of what they want to achieve. So they go out and purchase a property without first understanding how that property would fit within their goals or work towards their financial objectives. Each purchase I made played a clear role in my overarching goal, similar to pieces of a puzzle."
3. Avoid misconceptions
Warning that there are many commonly held beliefs that are not true, Sarafov says he had to distinguish between fact and fiction.
"As a Sydneysider, I was told not to invest outside of Sydney as it wouldn't yield a good return on investment. If I purchased in Sydney I would have never amassed the portfolio I have today in terms of dollar value because I wouldn't have been able to borrow with such low rental yields and high purchase prices. Moreover, a number of the properties I have purchased have outperformed the Sydney market since purchasing and have proved to be a greater investment."
4. Develop savings habits
True for anyone who wants to buy property, saving money for a deposit is often the hardest thing. Sarafov says it takes time and commitment, but it's important to develop savings habits to do it.
"Many people live paycheck to paycheck and aren't able to amass anything because they haven't developed a habit of saving."
5. Use support
When Sarafov first started out he made use of professionals who would be able to help him make informed decisions.
"When I first started I connected with a mortgage broker, mentor, buyers agent and solicitor. I would highly recommend anyone diving into the space to get assistance from professionals within each facet of property investment."
6. Buy particular housing
For Sarafov's strategy, he focused only on established housing. He also avoided buying high-rise apartments and house and land packages.
"The biggest benefit to property investment is capital growth. Many of these property types are sold for a premium and so the investor finds themselves waiting a number of years before they actually find themselves in front."
Image: @rattanakun via Canva.comIf you're ready to get started in property investment, check out our property investment guide and compare loans
