Buying your first investment property is very exciting. It represents a major financial commitment that should serve you well for many years to come – if you get it right!

We’d like to help, so here are Rosie & Rosie's top 5 tips for first time investors:

Tip 1: Your strategy should be capital growth first, rental yield second

Your first investment property should be a blue chip growth asset that you aim to hold for the long term (10 years or more).

Capital growth is more important than rental yield on your first investment. You need this property to grow so it can fund future asset purchases, like a family home, a business start-up or other investments.

The biggest capital gains in real estate almost always come from long term ownership.

Tip 2: Sort out your finances

This should involve a lot more than saving the deposit and stamp duty.

Buying an investment property is a very different goal to holding on to it, especially through long periods of vacancy, high interest rates, bad economic times and/or unexpected emergencies.

A common way to fail in property investment is having to sell too early. So you must make sure you can hold your investment property through tough times.

Tactics to help you hold on to your investment property include:

Create a separate cash fund to cover life’s emergencies, such as job loss or a health crisis; as well as unexpected expenses with your investment property

Get building and contents insurance, as well as landlords’ insurance to cover tenant damage and lost rent

Ensure you can afford your repayments at the long term average interest rate of 7.0%-7.5%

Consider whether an interest-only loan or fixed loan (so your repayments don’t change for a while) is right for you

Consider smaller banks and non-bank lenders who can offer more competitive mortgage rates than the Big Four

Educate yourself on the tax system. Perks such as negative gearing, deductibles and depreciation are a huge help in covering expenses

Tip 3: Buy local

We recommend you buy in an area you are familiar with; and one that is easily accessible by car.

Investing in other cities or states can be very stressful. There’s far more research and travel time involved in finding your property. You will also have less control over maintenance and how the property is managed if you live far away.

Tip 4: Buy in a desirable suburb

Don’t try to pick the next hot spot with your first investment. It’s too easy to get it wrong when you’re just starting out.

Go for an established, well-regarded suburb with a strong history of steady, reliable, long term gains. You can access growth trends data on realestate.com.au in the suburb profiles.

You can never spend too much time on research. Aim to become a suburb expert before you buy!

Tip 5: Look for quality

Now that you’ve picked a suburb, you need to find a high quality property. Whether the property is newly renovated, or an original house or apartment, location and individual features will make a big difference when assessing potential properties to purchase.

In terms of location, you want a nice, quiet street and close proximity to major local job hubs and/or transport to the city. Easy walking distance to shops and cafés is also highly desirable.

If you are buying a house (or an apartment large enough for family renters), find out where the school catchments are and which schools are most sought-after. If you’re in the right catchment, your property will experience better capital growth.

For the property itself, there are many desirable features to look out for:

Good internal space or good use of space in smaller properties

Great natural light (ideally a north aspect)

A pleasant outlook and privacy from the neighbours

Unique elements such as high ceilings, an oversized floor plan or period features

Strata title apartments with affordable levies, ample sinking fund monies and a high percentage of owner occupiers in the building

Off-street parking, particularly in middle to outer suburban locations

Finally, choose a property that you’d love to live in yourself. Investment properties that have high owner occupier appeal will always have better re-sale value.

The Rosie & Rosie approach to investing is a prudent and proven method based on many years of experience and advice from Australia’s leading industry professionals.

Combining our knowledge of property trends, analysis of the latest property data and extensive network of industry related professionals, our approach to investing is a prudent and proven method based on many years of experience. We are here to work with you collaboratively to achieve your personal property investment goals.

For further details, contact Rosie & Rosie at http://rosieandrosie.com.au/contact/