Tips & Tricks: Top five mistakes first-time property investors make

By the resi financial blog team, 13 January 2014

Tips for property investors

Property investment is a fantastic way for everyday Australians to secure real estate and help to generate a second stream of wealth from their investments. Now could be the perfect time for anyone looking into building a property portfolio to begin investigating the market.

However, there are a number of pitfalls to be aware of - especially as a first-time investor - that will help you avoid making common mistakes that can often stop buyers in their tracks and prevent investment success.

1) Waiting for the right time

The perfect time to purchase investment property would be when there is a high demand for housing, coupled with low interest rates, high capital growth potential, cheap homes and a stable real estate market.

Unfortunately, it's difficult to time purchases with all these things perfectly aligned. Many people wait and wait for these circumstances, only to miss out on purchasing property altogether.

Take the plunge and commit to your property portfolio as soon as possible in order to begin reaping the rewards.

2) Insufficient research

How do you know if the property you're investigating is a viable, profitable option? By taking the time to look into the various statistics and sets of data available that can help you make an informed decision.

Auction clearance rates, median house prices, property demand, rental yields and more can all be access and compiled in order to give you a fair idea about an area's past movements, present conditions and future projections.

3) Jumping on the 'hot spot' bandwagon

When investing, it can be easy to get swept away in the romanticised idea of The Next Big Suburb. While there may be some validity to these claims, it could be just as realistic to lose out, with these properties not achieving the expected returns.

However, take the time to look into strong, consistent real estate markets. These areas could offer a more stable, tangible return that can be looked forward to in the coming years.

4) Caring for your investments

Owning an investment property, especially if you're planning on renting it out, isn't as simple as merely holding the deed.

As a landlord, you'll be expected to ensure that everything runs smoothly for the tenants who are living in the property. This usually extends to taking care of any major problems that arise, like a plumbing malfunction or electrical complication.

Furthermore, it's in your best interests to keep the home looking fantastic. If you're hoping to secure a great return, maintenance and upkeep should be one of your top priorities.

5) Avoid emotional buys

Remember to judge properties on their standalone merits and saleability, rather than your own personal outlines for what makes a dream home. This means avoiding purchasing real estate with your heart and approaching with a business mindset in place.

Taking these pieces of advice to heart, as well as speaking with a financial expert about the best types of home loan financing available, will help you to develop a strong property portfolio and create a number of wealth-generating opportunities in the future.

Are you a First Home Buyer? You don't have to do it alone!

You are about to embark on one of the biggest financial achievements of your life. Securing your first home loan is exciting, challenging and can be a daunting experience.

We understand. The resi home loan teams have helped many Australians just like you succeed in home ownership. 

Where to start?

1 Find out everything you need to know about buying and financing your first home. Click here for your FREE First Home Buyer Navigator.
2 Do a budget and find out how much you can borrow. Click here to access our mortgage calculator.
3 Find out what government initiatives can help you. Visit firsthome.gov.au for more information on what's available for first home buyers.
4 Determine the best home loan to suit your needs. View our First Home Buyer products or contact your local branch and a representative will be able to help you
5 Get your finances pre-approved. A pre-approved loan can last up to 6 months and can be renewed on request. Click here to get pre-approved.
 6 Find a home that fits your budget and your wish list. Sites such as domain.com.au and realestate.com.au can help narrow your search.

Have more questions?

Our loan specialists are here to help you. They know the in's and out's of purchasing property, so call 136 126 or enquire online and be one step closer to owning your dream.

 

Categories: Home Loans, Property Investment