7 Property Investment Mistakes To Avoid
Investing in property is a popular way to make a profit. Whether you purchase a home to fix up and then flip for a quick profit, or you rent it out to make a steady income over a period of time, property investment holds many financial benefits. But it’s not as easy as you might think. There are a lot of traps that you could unknowingly fall into and that’s why in today’s blog, we’re going to go through seven mistakes you should avoid when it comes to property investment.
1. Choosing the wrong location
You’ll obviously want to try and avoid investing in a suburb or neighbourhood that perhaps won’t bring you much of a return in terms of profit. However, this point also includes the type of building you purchase and where it’s located within the suburbs. For example, something that isn’t very close to public transport or shops will not seem very attractive to potential buyers or renters, even though it might be in a good suburb overall.
You’ll want the property you invest in to be in a prime location near amenities and infrastructure. Is there a gym nearby? Supermarket? Do your research and make sure the surrounding area is desirable. If you wouldn’t live there, then others probably wouldn’t either.
2. Buying on impulse
Just because you think a particular property may be a bargain, doesn’t mean you should buy it straight away. Don’t be afraid to take your time. Make sure that if the value of a property has dropped recently, you investigate why, and ensure that it won’t continue to drop. Even though it may seem like a bargain to investors such as yourself, failing to do this could prove to hurt your investment plans overall.
3. Remaining idle
If you already have an investment property and you notice that rent or property values are falling, then take action. If you’re renting long term, then change it to short term to try and get as much out of the property as you can. Resources like Airbnb can also help you turn situation such as these into a win for you and your financial portfolio.
4. Paying off all your debt at once
Whilst it can be tempting to pay off all your debt at once – especially if you can afford to – it can sometimes be smarter and more beneficial to only pay parts at a time and leave the rest. The reason for this is that certain types of debt are tax deductable if your investment property is being rented out. There is a range of rules and regulations when it comes to what you can and can’t deduct, but there are tax benefitsinvolved with investment properties – such as negative gearing. If you’re unsure about what you can and can’t deduct, then have a chat with your accountant.
5. Demanding too much for rent
It can be easy to get carried away sometimes and want a bit more than the market dictates when it comes to setting a rent price for your Williams Landing real estate ventures. If you do this, however, you risk driving away potential tenants, or even angering your current ones. Then you could go months without having tenants – which means no income – just because the rental price is a bit too high. Instead, you should be open and a little more flexible when it comes to the
6. Going it alone
Whilst it might be a bit cheaper to tackle property investment solo, you’re going to need to enlist the help of some experts at one point or another. These could be property managers or simply a financial advisor
7. Not keeping an eye on your property
You should be keeping a close eye on your property’s portfolio to ensure that it is still on track and making you money. An annual review of your property portfolio should be sufficient to stay ahead of this issue. This way, you can verify that your property – as well as the area your property is in – is still meeting the expectations you have for it.
Looking to invest in Williams Landing real estate?
Whether you’re looking at investing, selling
So if you’re interested in real estate in Williams Landing, then please give us a call on 03 8372 2122 or fill out the enquiry form on our website.