3 Common Property Investment Mistakes To Avoid
Real estate has always been an attractive investment, offering both a stable value over time as well as the generation of continuous income – if you’re smart about managing the property.
The common perception is that buying a property to rent out is only really an option for the wealthy, but according to a recent survey reported on by Domain, this may not be the case. The data found that roughly one in three landlords had a yearly household income of less than $100,000, and while many of these may have been retirees, there’s no reason why younger people can’t explore property as an investment.
Regardless of which bracket you fall into, to make real estate work for you, there are a few common errors that you should be aware of and avoid. In this article, we’ll take a look at three of these.
The great thing about renting out a house is that you can be assured of a constant flow of income.
1. Managing the property yourself
A lot of landlords, especially if it’s their first time owning an investment property, feel that they can manage tenants themselves. While some people certainly have the skills to do this, in most cases it can be a recipe for disaster. The great thing about renting out a house is that you can be assured of a constant flow of income – as long as things are running smoothly. Dealing with disputes and missed rent payments isn’t easy, and if left unchecked you may find the situation spiralling wildly out of control and ultimately costing you in the back pocket.
To avoid this, it’s always best to talk with an experienced property manager. They’ll be able to navigate the common pitfalls of landlord-tenant relationships and ensure both parties are kept happy.
2. Impatience to sell
In a market like Sydney where there can be a lot of market growth in relatively short periods of time, there’s certainly a temptation to sell your property if you see an increase in value. In some scenarios, this may be the right thing to do, but more often than not you may find that holding onto real estate for longer – we’re talking over a decade – will result in the best possible profit on your investment.
Of course, there is always the potential of selling and then buying another property, but we’d recommend talking to an agent first to make sure you won’t be missing out on a great payday further down the track.
Very often, we see buyers looking at second pieces of real estate right in their own backyard.
3. Staying too close to home
It may be impossible to predict the property market, especially in Sydney, but that doesn’t mean buyers shouldn’t give themselves the best possible chance of seeing an increase in value. Very often, we see buyers looking at second pieces of real estate right in their own backyard – often in nearby streets or suburbs. This may be helpful in terms of keeping an eye on things but could result in missing out on growth in other areas.
For example, buying in locations where you know development and infrastructure changes are happening can be a great way to take advantage of development around the city and turn them into a tidy profit. If you’re interested in this approach, be sure to talk with an expert first to get an idea of where the best buys are.
These are just three tips for making the very most of an investment property. To find out more, contact Laing+Simmons today.