How to be a better property investor
- February 19, 2018
If you’re reading this blog, you’re probably already a property investor. If not, look out for our next post about first-time property investors!
But whether you’re on your first or your fifth, it’s important to know that mistakes can prove to be quite costly, often devastating your confidence in future investments. At :Different, we’ve seen dozens of clients set themselves up for long-term financial independence via intelligent property investments. To help you, we thought we’d take some time to write out our tips to become a better property investor in 2018.
Tip 1: Set clear goals
With property investing, you need to be sure of your goals. Obviously, your main goal is financial independence, but what exactly does financial independence mean for you? How much cash flow per year is that? How much time have you given yourself to get there? Which outgoings can you trim to get to those goals sooner? Maybe reducing your property management fees from 8% to 2% will help (Hint: Try our full-service fixed-fee property management)? Make sure that you’re not just investing because somebody told you that you’d win the property lottery. Have clear goals, track them and hold yourself responsible for attaining said goals.
Tip 2: Play the long game, or don’t play.
We hope that you’re in your property investment for the long-haul, but the truth is that most newbie investors think this will be a quick fix to their financial problems. The reality is that short-term gains in real estate are speculation, not strategic investing, and we want you to be strategic. The primary reason that real estate is a long-term prospect is that it lacks the liquidity and hence the volatility of other assets classes, such as bitcoin. To be a better investor, hold for the long-term.
Tip 3: Do your homework.
If you’re still buying and making new investments, do your homework. Understanding property markets takes time. You need to understand the cyclical nature of real estate and that’s hard even for experts. It’s not just a matter of attending a seminar, reading a book or asking a mate. You need to know the city, and the neighbourhood you intend to invest in like the back of your hand. Get familiar with any given area by pounding the pavement and talking to people. Seek out the locals, real estate agents and property managers of the area. Find out all about the details on amenities, vacancy rates and historical values of properties in the area as well. You can never know too much about your investment!
Tip 4: Property investing is not only about buying
This is a long game. It may take weeks or months to find the right property and more weeks or months to conduct thorough due diligence before signing a contract. And then you’re done, right? Not quite. Successful real estate investors know that buying property is only the beginning of the journey. It’s critical that you get the right kind of assets in your portfolio. However, once you buy a property, it becomes even more important to manage it in a way that it generates a superior return on investment (ROI). If you own a property investment then you should make sure that you have the best property managers for the job. :Different is revolutionising property management using a suite of new apps and one of Australia’s top Property Management teams. If you’re interested in learning about what we do, get in touch at firstname.lastname@example.org today.