What is stopping Australians from property investing?

InvestorKit, in partnership with Smart Property Investment and Agile Market Intelligence, present the Buying with Confidence report to address barriers Aussie investors face and dispel myths that add unnecessary burden to their wealth-building journey.

Investing in a property is one of the most significant decisions one can make, involving large sums of money to pay off the deposit. Deciding to take out a loan to fund your investment also means binding yourself with monthly mortgage payments and volatile market conditions.

The study found that the large deposit requirement is the most common hindrance to potential property buyers, a sentiment that 45 per cent of respondents shared. Meanwhile, two in 10 (21 per cent) are concerned about the long-term commitment of paying off their loan.

Given monetary constraints, first-time property investors must learn how to negotiate with sellers for possible easing of payment terms on the initial deposit. They must also know which line item on the loan terms can be modified to make monthly repayments less painful.

Apart from money matters, finding where and what to purchase are roadblocks for first-time property investors, with three in 10 of those surveyed needing help in this area.

Each investor has their motivation for buying a property. Some want to invest in a property, hold it, and develop it for potential property appreciation over the long term. In contrast, others prefer a property that can give them consistent rental payments.

For first-time property investors, deciding on the many kinds of properties to put their money in can lead to paralysis by analysis, preventing them from moving ahead with their investment strategy.

One in 10 (11 per cent) of those surveyed are unfamiliar with the purchase process, making them uneasy about property investing.

After deciding on what property to buy, potential investors must also learn to scrutinise the terms of the offer and negotiate with the seller on the best purchase price. In addition, conducting their due diligence can be challenging for newbie investors since it requires tight coordination with property inspectors to check the property’s structural integrity and plumbing and electrical systems.

After they’ve already determined a property to be suitable, it’s now time for them to get a lender. Knowing which lender offers the best loan deals takes a lot of work. As such, they must familiarise themselves with common terms such as interest rate, repricing period and tenor, among others, to better assess the different loan offerings.

Due diligence culminates with reviewing legal documents such as the property title, zoning laws in the area and other municipal regulations that affect how you can use or modify the property.

Lastly, given the complexities of investing in properties, the study found that 15 per cent, or around one in five respondents don’t see it right for them, while 18 per cent cite other reasons.

No matter what reason Aussies have for being on edge, the study highlights how getting expert assistance, such as that of buyer’s agents, can prop up the confidence of these new investors by providing clients with tailored property options and expert guidance throughout the purchase process.

Download our Buying with Confidence report and let us help you kickstart your investment journey!