First-time investors motivated and planning long-term

By Terry Ryder, 13th July 2011

The desire to create a strong financial future is the key motivation for Australians planning to buy an investment property for the first time, according to a survey by mortgage broker Mortgage Choice.

Eight out of 10 survey respondents chose "I want to set myself up financially for the future" as a major motivator. Six out of 10 indicated they preferred property investment to shares, while half of those surveyed were attracted to the tax benefits of investing in property.

The 2011 First Time Property Investors Survey was based on 1,060 respondents, each of whom is planning to buy their first investment property before mid-2013. For one in five, their first investment property will be their first property purchase of any kind (In NSW a quarter of respondents will make their first property purchase an investment property).

The biggest worry for prospective investors is the cost of living, a greater concern than interest rates, economic management or jobs security. Rising house prices is the major concern for only 8% of those surveyed.

Most (82%) plan to continue investing after the first purchase and work to build a property portfolio.

Mortgage Choice spokesperson Kristy Sheppard says the survey results presented first-time property investors as logical, well-planned, long-term thinkers who are determined, careful researchers and aware of their limitations.

"This may be why so many are buying for investment purposes before becoming a home owner," she says.

Sheppard says the findings indicate first-time investor buyers are anything but novices. "They are making educated choices based on a long-term commitment to their property cause and are thinking with their heads rather than hearts," she says. "All are vital attributes of a successful investor.



"For example, 84% already knew how much of an interest rate buffer they are going to factor into their repayment budget and only 2% aren't putting in a buffer. Also, 47% are looking to hold on to the property for 10 years or longer and 43% are looking at five to 10 years."



Other results of the survey include:

• Most are not concerned about the prospect that property prices might fall.

• 23% will purchase alone, 69% will buy with a partner and 5% will buy with friends.

• 69% will make lifestyle sacrifices in order to buy or are already making sacrifices.

• Favourite property type is a small house of one to three bedrooms.

• Top three property features were tenant demand in the area, buying in the right suburb and proximity to amenities and entertainment.

ENDS

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