There are many common challenges for new property investors, but all can be removed if you make good preliminary decisions in advance. In this market insight, we take the opportunity to share some of the most common challenges, but no means all of them. If you can manage them well, you’ll soon be able to enjoy the benefits and rewards of property investment.
Time management:
It takes time to learn how to invest, where to invest and how much to spend. In property investment, there are many other factors to consider such as they type of tenant you are after, are you looking for a higher rental yield, a blue chip suburb or capital growth to mention a few. The time required can be overwhelming so you need to look at ways to use it efficiently. Obtaining lending advice from a mortgage broker is one way to know how much you can spend, while seeking property advice from a trust property adviser will reduce your research time.
Investment knowledge:
The property market is a big asset class. It holds up our economy in many ways. If you are not involved in the property market full-time, you’ll soon realise that buying an investment property isn’t as easy as you’ve been told. Seeking advice from families may come from a good place, but it doesn’t mean it’s the best advice. You’ll see that your uncle is a successful businessman but that doesn’t mean he knows how to invest in property nor does he understand your objectives and risk tolerance.
How to deal with too much choice:
The property landscape is huge. In residential alone you have house & land, apartments, townhouses, brand new vs old etc. Trying to understand the differences between them and further learning what location is best suited can confuse investors. Obtaining property advice will assist you in determining what areas and property types suit you. The internet provides buyers with 24 hour access to various sources of information, but much of it doesn’t take into consideration your situation while not all content is accurate or written with the right intentions for buyers. Having all of this information can cause you to make a decision that is not in the best interests for yourself.
Sourcing good advice:
As mentioned a few times above, many of these common challenges for new property investors can be minimised or eliminated through good professional advice. However sourcing good advice is not always as easy as you’d like. There are many sales agents that often lack the empathy or personal touch to truly appreciate your emotional attachment and commitment. Word of mouth can be helpful, while family may also have good intentions. It’s important to do your own due diligence by making some calls and finding out what services are available to you. Here at Crest Property Investments, we pride ourselves on a our concierge service and specialise in sourcing brand new and off the plan properties for buyers.
Fear:
This is a big contributor that stops new property investors. This can be dealt with, when you know what you can afford and what you are willing to sacrifice before buying an investment property. Most fear affordability, loss of a tenant and cash flow. We all work hard for our money so we want to ensure we aren’t worse off. Capital growth is always on every new property investors list, but most don’t show great concerns about property prices dropping as apposed to not earning a rental income stream. Some think rental guarantees are a way to protect you from this. These can be helpful, but they are not always clear and concise. Some are now considering NDIS property, but this is not always a good first investment. Fear can make you become to emotional and cloud your judgement.
Buying an investment property is not a hobby. Seeking property advice will make this side of things come easy.
What should new property investors do?
The first step is to understand your financial situation. Seek lending advice, practicing a budget before committing to a purchase and then speak to a property adviser who will navigate and source a property aligned to your budget and circumstances. Taking careful steps will ensure you buy the right property while enjoying the buying process.
If you’d like assistance in making the right investment property purchase, please feel free to contact us. You can also learn obtain more tips around property investment on our YouTube channel or Market Insights section on the website.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more please contact us. We welcome the opportunity to assist you.
February 2022
