Every property investor needs to start somewhere. First property investments are often emotional and with finance, location, property management, tenants and location all contributing to investment success or failure, it can often be stressful.
It is easy to believe that you are alone when starting your property journey but there are various professions that are there to make it as smooth as possible for you. Don’t be afraid to ask (and pay) for help; some good advice before you begin can often save you a lot of money, and for many, a lot of heartache once you make the leap. Property investment doesn’t need to be mysterious, there are plenty of people doing it and most are willing to share their knowledge if you take the time to ask.
Recently some of Image Property’s seasoned investors sat down to talk with us about the biggest mistakes they made when starting out in property investment. Their stories varied and it was interesting to note that not all of them relate to money. We have handpicked the top 3 to get you thinking.
Understand the features of your property
When you spend the time and money on investing in a property, it pays to ensure you understand that property and its features so that you can connect the house with the appropriate tenants. Ask yourself who you would like to see living in the house – is it a fmily with a dog, students sharing a house, or a person living on their own? Target the specific group with your campaign and to ensure your property and your tenants complement each other and you will find the process much easier.
Get professional help to manage your property
Our investors consistently highlight the benefits of finding a property manager to take the stress and emotion out of this process. A property manager will take care of your proporety and ensure it is tenanted as part of their day-to-day business, and will keep it just that – business. When you opt to manage your own property, you inevitably end up emotionally involved and every setback can be draining, both mentally and financially. When you engage a professional it frees up your time to focus on your own interests, or even your professional pursuits which just might cover the cost.
Understand your finance options
Talk to the professionals and make decisions on your finance early in the process. Talk to mortgage brokers, financial planners, property managers, and other investors. Find out what your options are in terms of loans and mortgage insurance and what deposit you are comfortable making to ensure you are able to keep the right cashflow to keep you in the game. For example, one of our investors said that their biggest mistake on their first property was opting not to pay mortgage insurance and instead throw all of their money towards a 20% deposit with a small amount left over for renovations. In hindsight, they suggested that this was a big mistake as they did not understand the loans and the cost of doing business. Ultimately this decision restricted their cash flow and meant that they had to dip into their savings account to pay for the renovations to the property.