(July 2023 Blog) Five Common Mistakes Property Investors Make And How To Avoid Them
To err might be human. But as a property investor, you want to steer clear of making some common mistakes that could derail your success.
Mistake 1: Skimping on the research
One of the biggest mistakes property investors make is diving headfirst into a purchase without conducting thorough research. But without taking the time to understand local market trends, you run the risk of investing in an area or property with limited returns
To avoid this, dedicate time to market research, including analysing historical data and market reports. By being well-informed, you can make an educated decision and increase your chances of long-term success.
Mistake 2: Buying with your heart, not your head
It's easy to fall in love with a property, especially if it seemingly ticks all the boxes for your dream home or seems to have immense potential. However, allowing emotions to guide your investment decisions can cloud your judgment, leading to poor financial outcomes.
Remember, it's an investment, not a personal residence. So evaluate properties objectively based on factors, such as its location, potential rental income and growth prospects.
Mistake 3: Overextending financially
Stretching your finances to their limits can leave you vulnerable, especially if unexpected circumstances arise or rental income falls short. That’s why it’s so important to set a realistic budget, factor in all associated costs, and leave room for contingencies. A good mortgage broker can help with this.
Mistake 4: Going it alone
Some investors think they can handle everything themselves, from property research and due diligence to negotiating deals. But relying solely on your own knowledge and experience can limit your opportunities and increase the risk of making costly errors.
Rather, build a network of trusted advisors such as accountants, mortgage brokers, buyer’s agents and property managers. Their expertise can provide valuable insights, help you make informed decisions and increase your chances of success.
Mistake 5: Not thinking long-term
Investing in Australian property offers immense potential for financial growth, but it’s not a get-rich-quick scheme. That’s because property values can – and do – fluctuate over short periods. However, history tells us, that values typically appreciate over time.
As a result, you want to avoid making impulsive decisions based on short-term market conditions or trying to time the market. Instead, focus on identifying quality properties with capital growth potential and holding on to them for the long term.
Looking to buy a quality investment property? As an expert buyer’s agent, A Game Property Advisory can help you secure a quality property at a good price. Get in touch with Jim by calling 0422 446 170 or emailing jim@agameadvisory.com.au.