Investing in real estate is one of the most popular ways for Aussies to grow their finances and establish financial security. It’s the investment method of choice for so many everyday Australians because the property has consistently been profitable.
It’s essential to remember that real estate investing is not a done deal, though. Just because you sink your money into a property, it doesn’t mean you’re guaranteed to make a profit. There are many factors to consider if a property is a good investment such as whether the property has undergone a loft conversion or if the property is located in a prime area. With this in mind, let’s look at 5 Dos and Don’ts to follow while going for property investment.
#1. Do Educate Yourself First
If you’re new to property investing, don’t rush out and lay your money down on the first investment property you find. Like anything else you do in life, it’s important to study real estate investing and learn as much as you can about it first.
The good news is, when it comes to a property investment course, Australia has some great options. Participating in a specialised course run by industry experts and experienced properties investors, you’ll gain valuable knowledge of the industry. This will help you avoid costly mistakes, and you’ll be shown how to invest your money wisely.
Another advantage of doing a quality course is gaining some industry contacts and mentors who will continue to give you guidance along your investment journey.
#2. Don’t Start Investing Without a Plan
If you don’t first take some time to create an investment plan or strategy, you won’t know where you’re going or what you want to achieve. Before mapping out a plan, you’ll need to write down some goals. It doesn’t matter if these goals are a bit vague at first. They’ll become more defined as you work on your plan.
Over time, your plan might change as you learn more and mature as a property investor, but you must start with a rudimentary plan at the very least. It will get you thinking about what you want to achieve and how to realise those goals.
#3. Do Seek the Advice Of An Investment Consultant
The good idea is to seek the advice, assistance and guidance of an experienced property investment consultant, someone who has a proven track record in property investment themselves. They’ll be able to help you define your goals and map out an investment strategy based on your aspirations and their knowledge.
A great investment consultant will always be up to date on what’s happening in the market and aware of good areas to invest in and locations that are best to avoid. For example, just because a location is hot right now doesn’t necessarily mean a home in that area will be a profitable investment. The property prices could be over-inflated.
#4. Don’t Just Buy What An Agent Recommends
The majority of real estate agents, while they work with both buyers and sellers, are what’s referred to as “seller’s agents”. In other words, they predominantly favour the seller and not the buyer. Agents want to sell properties so they can get their commissions, so blindly accepting the advice of an agent is not a good practice to get into, as they may be biased and want to make a sale.
If you’re unsure about an investment property, an agent has shown you, call on your investment consultant for advice or run it by your mentors from the property investment course.
#5. Do Maintain a Budget For Expenses
If you’re investing in property to derive rental income, you’ll need to maintain a budget for expenses such as property repairs, replacing anything that breaks down and so on. While rental properties can bring in a good, consistent income, homes and apartments need maintenance, which costs money.
To keep good tenants, so your cash flow is continuous, it’s vital that your investment properties are in good order at all times, so set aside money that’s reserved for maintenance expenses.
So long as you’re smart about your investing, learn everything you can and seek the help of experts, you’ll be well on the way to creating financial freedom and security within a few years.