4 common mistakes made by inexperienced property investors

If you’re a first-time property investor, the concept of entering the world of commercial or residential property investment can be quite daunting. But fear not, we’ve laid out some common mistakes that beginner investors should avoid in order to make their venture a success.

1. Not researching the local area

The value of a property doesn’t only lie in its physicality; one of the first things buyers should take into consideration is location. There are many area ‘scoring systems’ (Mircroburbs for example). Areas with convenient transport links are vital for commercial properties, whereas quieter areas with nearby schools and parks are ideal for residential property buyers.

2. Not looking broadly enough

Many first-time investors make the mistake of only buying in the area where they live, for the sake of convenience. Australia has a breadth of property investment opportunities that exist across the country, so don’t trap yourself within your local area- look far and wide at the array of options that exist in multiple cities and suburbs. Myths around price & affordability start to get ‘busted’ when you apply this lense.

3. Assuming your property will appreciate

By nature, the property market fluctuates, so assuming that any property will immediately appreciate in value is detrimental to your investment. When buying an investment property, it is a good rule of thumb to look in areas where demand is growing at a faster rate than supply, as this will generally increase prices. Demand / Supply / Consumer confidence or Sentiment are the three key pillars.

4. Getting emotionally involved

Remember, you won’t be living in your property, so it is important to look at it objectively. You could end up overpaying for a property because you have fallen in love with it, or you might even dismiss a great opportunity because of insignificant details. Stay detached and impartial, as this is a business opportunity, not a personal decision.

Making mistakes can be part and parcel of the first-time investor experience, but consulting those who’ve honed the art of the buying journey can set you on the right track for landing a great deal. For investment property guidance by experts in the field, contact us today. We can help you find and secure positive cashflow properties with an added upside for capital growth.