It can be a hard pill to swallow for some, but the most important quality you can have as a property investor is patience! As most property investors will understand, there is no such thing as quick money in the world of property investment. Most of the mistakes investors make result from losing patience at the slow investment growth, but it’s important to remember property investment is a long-term game!
By avoiding the seven deadly sins of property investors, you can ensure the strong and steady growth of your property’s value and watch your wealth grow.
1. Waiting for the right time
Whether you’re waiting for the market to cool off or waiting for your ideal investment opportunity, if you wait for the “perfect” time, you could be waiting forever! Instead of basing your investment decisions on what you’re hearing in the media or what your friends say, base them on your personal financial situation.
The market will always fluctuate. Property investors simply have to do what’s right for them at the time and maintain a long-term strategy!
2. Flipping properties to chase quick money
TV shows like “The Block” have birthed the invention of the “DIY renovator”. But just because you can perform a cosmetic update on a property, doesn’t mean that you can necessarily recognise a great investment and flip it quickly without losing any money.
As a property investor, it can be quite stressful to trying buy, flip and sell property at just the right time and turn a profit. To do this right, you need to be absolutely certain of all the costs involved, paying close attention to the numbers and factoring in any time as well as the impact it may have on your life.
If you’re borrowing money to flip and sell properties, you need to be even more careful. The longer your “flip” takes, the higher the chances are that the market might fluctuate. Also, if you unearth any hidden complications within a property that needs fixing, this could blow your costs out of control.
3. Not doing your research
The best property investors pay thorough attention to the rental returns and capital growth potential for properties they’re considering purchasing. Don’t neglect the maths when purchasing property; factor in all possible costs and think about ways you can increase the value of your investment, if possible.
4. Not speaking to other property investors
Other property investors, particularly those with experience in the area you’re considering investing in, may be able to provide you with insider insights and advice. Ask these contacts how they managed their portfolio and which areas or property types they bought into and why.
5. Trying to manage the property yourself
Most property investors will use outside management, especially when vetting tenants for their property. Not only is it far less painless, but it also means that you’re sure to find a tenant who will be respectful and take care of your property. Property managers have a vast deal of experience and will take time to conduct the necessary checks on a tenant’s background and renting history.
6. Buying a property in the wrong area
When buying an investment property, location is so crucial. But even though an overall suburb might perform well, not every street has equal value. For instance, the street you choose may be located far from public transport, shops and other amenities.
Choose a suburb with strong growth and rental yields and ideally one that has no oversupply in the area or planned developments in future.
7. Buying a property investment based on “future” value
Property investors should never buy a property based on its future potential. Future potential is never guaranteed. Plus, you never know when you might need to sell your property.
What is guaranteed in the world of property investment, however, is location, layout, size, local amenities, proximity to public transport, and the character of the suburb you want to live in. Suburbs with homes that are tightly held with limited space and no planned developments will always be a sure thing, as they’ll stay in high demand.
If you’re a property investor, we know just how to maximise your profits. Check our blogs for our top tips. Or, speak to one of our expert team members for our top property investment advice. Contact us here.