If you’re planning to find and buy an investment property, DO NOT go to a financial planner or accountant for property advice, these professionals will talk you into buying an expensive properties OFF THE PLAN, which earns them commissions, they have little, to no experience in the day-to-day movements of the local property market or how it might affect your investment – and yet, they will do their best to push you until you invest your money in what they are selling.
The only credible person you should run to for property investment advice is an active property investor… who is also a trustworthy buyer’s agent.
Tracey Chandler is not just an experienced property buyer’s agent. She is also an active and successful property investor of over 30 years. When she gives you advice, you know that she knows what she is talking about.
Why pay $1mil or so for a 1-2 bed apartment in Sydney and Melbourne when you can by a lovely freestanding house for the same price, with great rent, near a train station and water, in a pocket that is growing by the day. The Bayside suburbs are lucrative, up and coming suburbs to invest in.
That is the secret to buying investment properties: Getting successful likeminded investors like Tracey to help you. If you go to her, you can imitate what she’s done and be just as successful.
Common Mistakes Property Investors Make
Generally, when making investments, you must always follow your head. Don’t buy with your heart.
The same is true for investment properties. When you look at a home purely as a potential investment, remember that you aren’t buying it to live there. Your immediate objective is to make sure the property is fit to be tenanted or eventually resold.
And if you are thinking of buying a property to live in for your eventual retirement, set that objective aside for now, cross that bridge when you get there. It’s wiser to focus on your current financial goals instead and buy a great investment property, Buy your retirement property when you are ready to retire, make your money now, lots of life events will happen between now and then, so don’t be tempted to make a purchase you will regret later.
Here’s a list of the most common mistakes that investors make when picking properties for investment.
They…
- They fall in love with what they purchased and with how the place looks; they hope to live there when they retire;
- They purchase the wrong type of property for their financial goals
- They buy property in the wrong location
- They purchase off the plan (without the advice of a proper buyer’s agent) and pay a high development premium
- Once purchased, the property’s bank valuation does not stack up
- They cannot rent out the property because so many other rentals in the area are competing at the same time
- They invest in property located in a large development where there are too many similar or comparable apartments/strata units
- They buy an expensive apartment in the City (with stunning views and a great location) but it was so expensive and has a very low yield (and are constrained to hold onto it longer)
- They followed the advice of well-meaning family and friends who knew next to nothing about the property market
- They do not hire a local buyer’s agent who is an expert in real estate and is very familiar with the area they want to buy in
- They procrastinate and become too timid with their investments because they feel they don’t have enough experience; thus, they lose the opportunities
Basically, the reason why many investors don’t succeed with investing in residential properties is that they do not do proper research. As a result, they can’t properly analyse their situation or their prospects.
And when these common mistakes are combined with a lack of negotiating skills (which is also common among many would-be investors), they end up making questionable property investments and paying more than they should have.
Get Tracey Chandler to advise you
You can avoid these common pitfalls if you engage Tracey. That way, you can be confident that you won’t be wasting your time or money.
Tracey understands SMSFs completely. (She buys properties in her own personal SMSF.) So if you have an SMSF and plan to build up a property portfolio, contact Tracey.
Or if you don’t but would like to get started with setting up an SMSF, Tracey can put you in touch with the right people. She will recommend her personal accountant, if you need to borrow money in a SMSF, Tracey can refer you to loan brokers who understand all the rules to this.
General advice
Here are a couple of questions you might want to ask yourself..
1. Do your research
Ask yourself the following important questions:
- What is my ultimate financial goal? Why do I need to buy an investment property?
- Can I afford to hold on to my property investment if the interest rates go up?
- What type of residential property do I invest in? Do I buy a studio apartment? A 1, 2, or 3 bedroom unit? Or should I invest in a house?
- What type of property works best for the area I want to invest in?
- Why does Tracey not recommend serviced apartments or student accommodation?
- I may have spotted a good location. But are there “good” and “bad” pockets within that area? Will they eventually affect the value of my investment?
- How much money can and should I spend on an investment property?
- What’s better, renting out the property with or without refurbishing and furnishing it?
- Which property manager in the area works best for my property? How reliable is this property manager?
2. 1-2 properties will not secure your future
A coupler of property investments won’t change your life, nor make for a large retirement income. Just one or two properties to your name will not be enough to secure your future. Instead, you will need to build a larger property “portfolio”.
Eventually, you will want to pay off any mortgages with the steady rental income from your properties, or sell the odd one to clear the debt, then live off the income to pay off the remaining mortgages. You will have an easier time paying off the remaining debt. In the end, you have a collection of properties that deliver you a steady income.
Depending on your lifestyle and financial goals, you may need more properties for this purpose.
