Due to the relative predictability of the rental market and the potential for investment returns, many Australians consider investing in property a safer bet than investing in other types of assets.
However, despite the fact Australia is home to over two million property investors, many of us are failing to add that second property to our investment portfolio. So why is it so many property investors can’t make it past the first purchase? And what property investment advice can we follow to guarantee a more successful investment venture?
Not making the right buy
When it comes to purchasing an investment property, it can be easy to let personal preferences get in the way of the bigger picture. Many property investors fail to remember that theyre not just buying for themselves, but also for future tenants. There’s no use buying a fancy four bedroomed property if it isn’t in demand. It may be time to hold off on that personal dream home and find a Perth rental property that matches your tenants’ needs. Speaking to your property managers will help you identify what your target tenants are looking for and how you can make the best buy in Perth’s rental market.
Self-managing an investment property
Managing your own investment property may seem like a smart financial move – after all, youre saving money by adopting the DIY approach, right? In reality, many property investors run into trouble by opting to go it alone. Not only will a professional property management agency help you get the most bang from your buck when it comes to rent, they will also give you the property investment advice you need to make the right decisions for the future of your Perth rentals. Having the right team of property professionals in place from the start will reduce your risk of failure and increase your chances of expanding that property portfolio in future.
Lack of financial planning
A lot of property investors never make that second buy due to lack of financial planning. Maybe they’ve chosen the wrong home loan to suit their investment plan, or they’ve failed to account for unexpected expenses and blown their budget early. When it comes to planning for multiple investments, theres a lot of factors to take into account. What type of loan will best suit your investment strategy? Does your margin allow for unexpected expenses? And how are you planning to fund your second investment? If your intention is to expand your property portfolio, you need to plan how you will get into the right financial position for that next purchase.
Rushing into an investment
Rushing into an investment is another reason why property investors never make it past the first purchase. If you think you’ve found the perfect property, take a step back before you invest. Is this type of rental property in demand in the local area? Are you in the right financial position to invest? Are there any problems with the rental itself that could lead to unexpected costs? By researching the market and assessing your own position before you invest, you are laying the right foundations for a more successful investment venture.
Failing to stay educated
After one successful real estate investment, property investors can become complacent. It worked once, so it will work again, right? The truth is, real estate is always changing, and investors need to continue educating themselves about the rental market if they hope to expand their portfolio further. This means staying alert to changes in Perth’s property market, researching ways to improve one’s investment strategy and adapting to the changing demands of tenants.
Expert property investment advice
Getting the right property investment advice from property professionals can make or break your investment venture. Whether you’re a first-time investor looking to make your first purchase or a seasoned property expert hoping to expand your portfolio, the property management team at Rentwest Solutions can offer you the advice and support you need to enforce and develop your investment strategy. From maximising rental income to minimising investment risks, our Perth-based property managers can get you in a better position to make that second purchase.
To find out more about our property management solutions, get in touch with the team today on 08 9314 9888 or email us at [email protected]