Don’t make these 6 mistakes if you want the best property investment possible
There’s no one-size-fits-all when it comes to finding the ‘best’ property investment available. Ideally though, you want it to make you money through rent paid by tenants. It doesn’t matter if the property is residential or commercial, a house or an apartment. To make sure you find the best property investment for YOU and your portfolio, we compiled these five tips.
- You don’t have professional help
You need unbiased professionals to help you handle the financial aspects of property investment. Mortgage brokers help investors daily, giving them advice about home loans and ownership structures. You’ll also need your accountant on your side. Find one that specialises in property accounting so they can lay out a plan and a budget based on your income and credit.
- You don’t have an end game
Nobody invests in property just for the heck of it. There’s always a plan in place for each property in the portfolio. There should be a backup plan, too.
Some get into property investment to boost their retirement savings or retire early. Others want to get out of their day job after earning income through buying, renovating, and selling homes. Don’t walk into the property investment game with short-term goals.
- Your properties are all in one place
Yes, you’re more comfortable buying ‘close to home’ because it’s familiar territory. But this means other investors are buying you out of the locations that really make the big bucks.
Less than 20% of investors have two properties or more in their portfolio. Less than 1% own six. This means 99% of investors are playing it safe and are missing out as a result. There’s no reason why you can’t have a property in Tasmania or another in Perth. Get out of town when it comes to looking for the best property investment.
- You haven’t looked at trends
Get familiar with complicated terms like ‘yield’, ‘median price’, and ‘cash flow’. Trends like these will guide you in making great purchases.
- …or done your homework
Have you done any research into the area you want to buy? Did you check if there’s any upcoming developments like shopping centres? What about schools and access to public transport?
If you don’t do your homework, you’ll end up with a property investment located in an area saturated with others. You’ll leak money instead of save. This is why it’s important to look at trends and branch out from your ‘home base’.
- You can ‘manage on your own’
If you can, good on you. But the task of picking tenants as well as monitoring them, setting rents, and the like takes time you don’t have. Plus, you’ll get emotionally invested. Hiring a property management team is a better option.
