Investing in property can be a very lucrative business, but it is certainly not risk free. Whilst Property Investment offers many perks and the possibility of great investment returns, there are also a number of pitfalls that rookie investors can easily fall into.
Here are 3 tips that we see as essential to avoid basic mistakes in Property Investment:
1. Self-managed
Avoiding self management is the first step. Sometimes managing your own investment property can actually cost you money in the long run rather than save you money. Managing a property requires specific skills and knowledge about the legalities involved with renting out a property. Knowledge of the market is very important as well as the skills in looking for the right tenant for your property. All these skills and knowledge can only be found through employing a professional Property Manager to manage such a big asset for you. If you still like to be involved in the process you can attend routine inspections with your Property Manager for peace of mind or request that photos are emailed to you after routine inspections so you can see how the property is being maintained.
2. Insurance Neglect
Never underestimate the benefits that landlord insurance can provide you. In our experience Landlord Insurance should be a necessity rather than an option. It offers valuable protection against damage that your tenant may cause in your property. As is often the case with insurance there are multiple variations, so as your Property Manager we can help work out which is the right option for you.
3. Emotions
Real Estate is undeniably an expensive investment which makes is really important that you make good choices. Choices need to be assessed from a practical and business sense, not based purely personal preference or emotion.
When purchasing an investment property consider what appeals to the potential tenant market in that location. Are people mostly families requiring a back yard and lock up garage? Are they mostly uni students or young people and prefer apartment living? Whatever the case may be, make sure you purchase an investment property not based on what you would like but what appeals to the market who are likely to rent in that area.
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