7things1ySo you've decided to start investing in property and vowed to get into the game this year.

Seeing how prices in Sydney and Melbourne have surged during the past two years, you're worried that  the markets are running away too fast.

You're scared that if you don't get in now, you won't get in at all. You're tempted to get in now at all costs.

Stop right there. This kind of mentality is a sure-fire way to get yourself into financial ruin. Instead, take  some time to lay the groundwork and plot your investment game plan.

So what should you do first before you dive into property investing?

1. Decide what you want to get out of property investing

 It may sound like a cliché, but you won't get anywhere if you don't know where you want to be in the first place. Therefore, you need to be clear about what you're actually trying to achieve. You need to decide how much money you want to make and when. Be specific.

2. Assess your assets and expenses

This is as simple as listing all the assets, such as your home if you own one, car, jewellery and so on, that you currently have. Also include other financial resources you have to work with, such as other investments if you have any.

Then do the same with your ongoing expenses. Make a list of all your bills and loan repayments. Having this information at the start of your investment journey will help you gauge your ability to take on more debt and avoid overextending yourself.

3. Speak to a mortgage broker

A good mortgage broker can be an invaluable resource for a beginner investor. They have access to a wide range of mortgage and property information that you can tap.

They can help you calculate how much you can borrow given your personal and financial situation. They can also give you advice on what type of loan would suit you and how to structure it so you can continue borrowing money down the line.

Make sure you choose a broker who understands property investing.

Top tips: Questions to ask your mortgage broker (& why one could be helpful)

4. Talk to a property-focused accountant

Investing in property is not just about earning rent; it's also about maintaining your cash flow. A good accountant will be able to help you structure your investment property so that you will be able to maximise your tax deductions and cash flow. They can help you structure your investments so that you can minimise your tax bills while protecting your property investment and yourself.

Just like choosing a mortgage broker, make sure your accountant specialises in property investing.

5. Understand how much risk you can take

Knowing how much risk you can tolerate is crucial when deciding what investment strategy to adopt. You can start to self-assess your risk profile by looking  at the following:

Your age and years remaining until retirement. The closer you are to  retirement, the less risk you will likely want to take on because you will not have time on  your side to rectify any potential mistakes and you will not want  to squander your nest egg.

Your buffer. Do you have a savings stash to tide you over in the worst-case scenario?

Extra income. Do you have excess income between your job and your property portfolio (and other investments you may have), and how reliable is this income?

If you are younger and earning a modest income, then taking on more risk to achieve your long-term goals could be an option.

6. Familiarise yourself with the investment jargon and what it means

Getting educated about the different aspects of property investing is so much easier these days, thanks to the explosion of available information and data. Online sources like realestate.com.au are teeming with articles and information about property investing and the property market as a whole. There are also many books and magazines you can peruse.

Need-to-knows: 8 questions to ask before investing

Spend some time understanding how the market you're about to dive into actually works.

7. Get comfortable with the numbers

You don't have to be a maths whiz-kid but you need to be comfortable crunching the numbers and analysing each deal. This involves really understanding what the numbers mean and where to get them. It may take some time to get conversant at the start, but they're fairly easy to grasp.

This initial strategy is crucial to your success as an investor. It's your road map and should reflect the changing market and your personal circumstances. Skipping this part and diving right in may result in long-term financial ruin. Taking time to do it right will help you succeed as an investor.

Source – www.realestate.com.au