Investment Property Pitfalls to Avoid
As a property investor you have worked hard to have the extra income to invest in property and seeing an increase in capital outcome is important.
Beware of the hidden pitfalls when making a property choice. You don't want to make an expensive mistake.
Expert Buyer’s Agent Miriam Sandkuhler reminds investors to “avoid the mistake of thinking that free advice is good advice.”
Free advice is really never free when it comes from a selling agent or project marketer because it isn’t unbiased.
Miriam Sandkuhler shares some basic steps to consider before investing in a property:
- Get Independent Advice: Sales agents and project marketers aren’t unbiased and taking their advice can lead to a very expensive mistake. If you employ a licensed buyer’s agent they will do research and analysis for you. If you decide to represent yourself you need to do independent research on the information the sales agent is putting in front of you.
- Know the Purpose of your Property: It is important to have a clear plan or strategy of what this property should financially achieve for you. If you aren’t clear if it’s a “cash flow” or “capital growth property” then you don’t know what or where you need to buy.
- Macroeconomic Growth Drivers: As an investor you need to research macroeconomic growth drivers that influence the economy. This includes where the current economic conditions sit in relation to the population growth, land availability, industry development and infrastructure development. Make sure multiple growth drivers are taken into consideration where you purchase your property.
- Microeconomic Growth Drivers: Along with macroeconomic factors come microeconomic factors to consider. That means look for areas with sustainable future capital growth and rental increases. Factors that affect this are population growth, local amenity, provision of schools and hospitals.
- Decreases in Property Market: This can happen when there is an oversupply of new property or when local industries are closing down. You don’t want to purchase in a town that primarily relies on one industry alone.
- Consider a Licensed Buyer’s Agent: Buying an investment property is a complex purchase. A professional buyer’s agent will provide an investment strategy for you and will research, assess and negotiation to buy a property for you to meet your brief.
Investing May Seem Easy
Miriam reminds investors that, “there are many steps along the journey of buying a property where people can make a mistake that costs substantial amounts of money.” Real estate agents, project marketers, and developers want people to think it’s easy and that everyone makes money. For decades, it has been assumed that property doubles every seven years and Miriam warns that it is “to the investor’s detriment” because this simply isn’t the entire truth. Always do research and hire an expert in the field who can give you honest advice to avoid those pitfalls.
A buyer’s agent in Melbourne or your own city can help you make more informed choices. If you’re looking for a buyer’s advocate in Melbourne to help assist you with purchasing an investment property, Property Mavens has you covered.
Rate Your Property Expertise
1. Do You Want to Secure Your Financial Independence by Investing in Property?
2. Do You Want To Be a Successful Property Investor? The Vital Knowledge You Need To Start Investing
3. Are You a Great Property Investor? Take Our Quiz To Find Out Your Weaknesses!
4. Why Would You Want To Hire a Buyer’s Agent to Purchase a Property?
About Miriam Sandkuhler, Property Investment Advisor
With Diplomas in Property and Business Studies – in a non ASIC regulated industry, she’s uniquely qualified to develop and also fulfill successful and sustainable property investment strategies for her diverse range of clients - investors, SMSF trustees and home buyers alike.
