Thinking about getting started as house and land investors for the first time? There is a lot to consider, however we’ve made it that little bit easier by listing these top five mistakes to avoid if you are a newcomer to property investment.
5 Common Mistakes Make by First Time House and Land Investors
1. Personal Preference
Choosing a property based on your own wants and needs is great when build your own place but is a big no-no in the investment game. When buying an investment property your absolute focus should be on capital growth and rental return, not on whether you like a two-bedroom house vs a three-bedroom house. Always base decisions on hard research which will ensure you are buying in the right location, for a willing and available market.
2. Not Considering Your Renters
A lot of first time investors forget the most important consideration, your potential renters! What kind of lifestyle are they likely to have? If you can answer this, you’ll start looking for properties that cover off amenities relevant to that lifestyle, whether it be a buzzing neighbourhood with bars, restaurants, movies and shopping centres or a family friendly area with schools, parks and doctors. The more you can offer in terms of amenities, the more appealing your property is to potential renters, affecting your perceived property value. Dont forget to think about how much maintenance each will require.
3. The Wrong Conversations
Talking to friends and family is a great way to start thinking about house and land investment but it shouldn’t be the only research you do. Experts are experts for a reason and will help you make smart decisions based on industry trends and forecasts, looking at the full picture for what makes an investment property valuable.
4. Buying Without Setting Goals
Knowing your short and long terms goal are crucial in ensuring your investment is a building block and not a blocker towards achieving your overall goal. Be clear on how you are going to manage cash-flow. This will also keep your expectations in check, property investment isn’t the same as winning the lottery, it is a considered decision that with the right planning and education can provide long term.
5. Biting Off More Than You Can Chew
As with any property purchase, you need to be sure that you can afford it. It is crucial that you understand and are prepared for all of the costs associated with buying and maintaining a property. Ensure you are getting the advice of an accountant who specialises in house and land investment. The type of questions you should be asking are: will your investment income cover your investment costs? What shortfall can you afford? Can you manage maintenance costs? And unplanned vacancies?
Still have questions about first time property investment? Let us help – iBuildNew has access to affordable house & land packages that are not usually available to the public and our experts are on hand to guide you through the process and make smart investment decisions. Speak with our phone consultants on 1800 184 284 today or book a call .
Let us do the legwork for you.
- We’ll ask the right questions to better understand your needs
- We’ll create a recommended shortlist ideally matched to you
- We’ll answer specific questions or concerns related to home building, land purchasing or financing
Zoe Langenberg
Zoe is passionate about coffee and interior design. You can find her most weekends exploring an art gallery or devouring a good book.
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