It’s no surprise that more and more astute investors are turning to property as a way to grow capital. Like all investments though, buying an investment property takes careful research so you know what you’re getting into and what the pitfalls are to avoid. To help you stay on top of the property investment game, here are 3 common mistakes to avoid.
1. Emotional Decision Making
Choosing a family home is largely based on how you feel about the property. After all, a family home is your sanctuary: the place to raise your family and come home to after a hard day. It’s quite understandable that emotion plays a large part of that decision.
Buying an investment property is quite different though and it’s important not to get side tracked by your personal feelings about a property. Factors like capital growth and rental yield potential need to be considered. Is the property in the best location to attract the type of tenants you want? Will the property appeal to mainstream owner-occupiers? How does the infrastructure and nearby facilities compare with other areas you are considering?
2. Lack of Research
Not only do you need to have a good understanding of the property market and investment fundamentals but familiarising yourself with the neighbourhood you’re considering buying into is just as important.
Will the nearby schools, parks and shopping centres meet the needs of potential tenants? Is there a convenient form of public transport nearby? What would a commute into the closest commercial area look like at peak times?
Once you’ve found a property to buy and before you make an offer, it’s equally as important to do your due diligence. Compare house prices for similar properties in the area. Look at rental yields of rental properties nearby. Would you be paying a fair price for the property you’re considering, and can you meet your investment goals?
3. Going it Alone
Choosing to handle everything yourself – from finance to property management - could end up costing you more in the long run.
Finding the right financial solution is vital to ensuring the success of your investment, and with so many finance options out there, it’s best to seek advice from a professional. A Mortgage Express mortgage adviser can help with lending advice by looking at your financial situation and needs and matching those with a finance option to suit.
Managing the day to day details of your investment property can prove challenging and time-consuming for many property investors. A Harcourts’ property manager will market your property correctly, screen and vet new tenants, undergo regular rental inspections, and act as a buffer between you and your tenants ensuring the transaction remains professional.
Buying an investment property takes careful consideration and planning. Whether you’re buying your first investment property or you’re a seasoned investor, it’s worthwhile seeking professional advice from a Mortgage Express adviser.
Because we work with a panel of lenders, we have access to a far greater range of lending options and can help you determine the right financial solution to fit your needs and investment goals. Get in touch today if you’d like to find out more.
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Disclaimer:
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Mortgage Express Limited for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication.
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