As with any new investment venture, property investment isn’t always a plain sailing process.
For first-time buyers who are new to the Perth property market, it’s often easy to overlook common traps that could prove detrimental to the future of your property investment plan. Uninformed purchases, a misunderstanding of the market or a failure to seek property management advice could lead to a failed property investment and prevent Perth investors from extending their property portfolio in the future. If you’re looking to make your first purchase, here are four common property investment traps you need to avoid.
1. The impulsive purchase
Many property investors make the mistake of following their heart instead of their head when purchasing their first property. Before making a property investment, you need to consider the prospects of your purchase:
- Will your property appeal to tenants?
- Is the value of your Perth property likely to increase?
- Are there any projects that are likely to affect the future value of your investment? This is particularly important if rentals are already in high supply in the area, since more rentals mean lower rental prices, higher vacancy rates, and lower returns.
For more on considerations relating to property investments, talk to your local Perth property management specialists for advice before investing.
2. Not looking at the bigger picture
First-time buyers often invest with the intention of getting a quick return on their property. In reality, you need to look at the bigger picture. Perth property investment isn’t just about the immediate returns. If you manage your investments correctly, you should see capital growth for years to come. Think of the whole process as a business – would you set up a business without a long-term financial plan? You will need to think past the initial investment and consider how you’re going to maximise returns on your property in the future. First-time property investment should really be considered as the first step in building a more extensive and lucrative portfolio.
3. Investing in a high maintenance property
If you plan on getting into property investment, avoid purchasing a property that is likely to require extensive maintenance and regular repairs. Older properties could end up consuming a lot of your time, money, and stress. On the other hand, with newly built or renovated properties you will be able to claim tax depreciation benefits and capital work expenses. Purchasing a newer property could therefore lead to increased cash flow and lower ongoing maintenance costs.
4. Not seeking professional advice
Many first-time investors make the mistake of avoiding specialised services when it comes to managing their Perth property. Remember: property managers are experts in their field – with extensive knowledge of the Perth property market and can help you make the right decisions for your investment. Most people who choose self-management often overlook the long-term benefits of using a specialised property management service.
As well as helping avoid common property investment traps, property managers help oversee rental collection, taking care of maintenance issues and helping increase the value of your Perth property after your initial purchase.
Specialised property management solutions
Whether you’re an experienced property investor or new to the Perth property market, the specialised property management team at Rentwest will help you manage your properties both before and after investment. With their in-depth knowledge of the Perth market, Rentwest’s property management specialists can help you avoid common property investment traps and assist you in building a long-term property investment strategy.
For more information on our property management solutions, contact Rentwest via email at email@example.com or call 08 9314 9888.