4 property investment traps to avoid
Making money through property investment isn't rocket science, but that doesn't mean it won't require careful planning and research to succeed.
There are plenty of ways investors can go wrong and lose money, so it pays to do your homework and partner with industry professionals who can assist you.
The following are four common ways investors end up doing a real number of what could otherwise be a lucrative Australian property investment.
Picking the wrong area
The location of your investment property will be just as important as the home itself.
Is it in an area that's experiencing rising home values? Is it near popular amenities that will attract renters?
Remember that when you buy an investment property, you're also buying a stake in the local neighbourhood.
Opting for the wrong type of property
Then again, don't think a quality neighbourhood means you won't need to focus on the property itself.
If you purchase a detached house in an area where units are all the rage, chances are you're going to find yourself with the short end of the stick.
It's important to research what kind of properties are in demand so you can capitalise on this. Simply scooping up any real estate available is a recipe for disaster.
Going it all alone
There's no rule that says you need to hire a team of professionals to help you when you buy a house in Australia, but not taking advantage of expert knowledge is a mistake, especially if you're relatively new to the property game.
The right buyers agent can help you find property, as well as negotiate a fair price. And a property manager can stay on top of your investment while you focus on other pursuits, reducing the time and energy you need to devote to your real estate.
Choosing the wrong tenants
Renting out a home can be a great way to set up a cashflow positive property and add a steady stream of income to your own.
However, the wrong tenants can undo all your hard work. Make sure your property appeals to the types of tenants you want, and take extra care to select men and women who seem like they will take care of your property and stay current with their financial obligations.