Buying an investment property is a big decision, and not one that should be made lightly. Being ahead of the game and fully understanding what you’re doing is a crucial factor in property investment success. Here are a few classic property investment mistakes you should try to avoid:
1. Attempting to invest without a strategy
Approaching property investment without a strategy is like going to the supermarket without a grocery list – you’ll end up spending much more than you plan to! Taking the time to sit down and construct a detailed plan that maps out your goals and how you will achieve them will help you find investment success.
2. Buying as a tenant and not an investor
Your family requires a three-bedroom apartment in the same city you live in, so this is what you should look for in an investment property, right? Wrong – remember that you aren’t going to be living in your investment, so you should take into account what the potential tenants will want. Do your research on different cities and even different states, as these may offer more lucrative investment opportunities.
3. Refusing a flexible approach
You were advised that your rental asking price is $600, but you just can’t seem to find tenants for your investment property. Maybe you chose the wrong suburb, or not enough bedrooms. Or, perhaps the rental asking price is a little bit high. If you’re losing money because tenants aren’t willing to pay your desired rental price, try being a little flexible and drop it by $20 – $40. You’ll end up saving more in the long run, as losing $20 – $40 a week is much better than losing $600 a week while the property is vacant!
4. Skipping the property inspection
Just because you’re not going to be living in the property does not mean you can skip the inspection. This is even more important when buying an investment property off the plan. Unlike inspecting a property to rent or buy to live in, inspecting an investment property has more to do with ensuring its financial value. It is far easier to find and solve problems before your tenant points them out to you!