When it comes to property, there’s no shortage of information available about what investors should do in order to succeed. But more importantly, are the pitfalls to avoid so you don’t become a statistic of the property game.
Many people get into property investment hoping to become overnight millionaires. But expecting a ‘get rich quick’ scenario may navigate you towards reckless investment options. Some would-be investors have been caught-out by property development salespersons who will happily tell you of the overnight success you’re likely to achieve overturning a property you buy off the plan.
The safer option is to look at obtaining a property in an area that’s proven to be high performing, and that will grow reliably over the long term. Do your research, and determine a wish list for the ideal investment property – keeping in mind, the property needs to appeal to a wide range of potential tenants and not your own personal tastes. Discuss your requirements with your agent who can help you find investment properties that fit your criteria.
Understanding the market takes time and getting to grips with the cyclical nature of real estate is something that can even evade many experts!
Make yourself familiar with the area that you intend to invest in by hitting the road and talking to locals, real estate agents and property managers. Find out about the amenities, vacancy rates and historical values of local properties. At Harcourts South Coast we have a dedicated Business Development Manager who can help with insight into our local rental market.
Attending open homes and auctions can also be a great way to get a feel for the area of interest and the prices of the property your desired area commands. These days, a lot of this information can also be found online.
Understanding the costs involved in purchasing and holding property can be difficult. You need to make sure you can afford to hold onto any property you buy, including times when you might be left without tenants, or when interest rates increase. In other words, how much income will your investment generate and will it be enough to cover your expenses?
When it comes to financing your investment property, seek help from a qualified, professional mortgage broker. Going it alone can be daunting and time-consuming and obtaining the right type of finance can save you thousands in the long run.