Buying an Investment Property

Investment Properties - Buyers Agent SydneyThe only person you should have to find and buy an investment property for you is an active property Investor… (NOT A Financial Planner, Accountant or any other professional who sometimes offer expensive over priced properties OFF THE PLAN often for their own commission, they are also often not experienced in the day to day property market.

Tracey is not only a Senior Property Buyer’s Agent, but she is also an active property investor – that is the secret to buying investment properties. If you hang out with successful people, you become successful, copy what the successful property investors have done and take advice from them.

When buying an investment property, follow your head and not your heart, always remember you will never live there, it will be tenanted and if you are planning one day to retire into an investment property, buy smart at the time and cross the retirement bridge when you get to it – Buy the retirement property when you get to that stage in your life, lots will happen in the meantime and there is a massive high chance you will never even get to live in that property anyway and it will end up being a regretted purchase.

Common Mistakes Property Investors Make

Here are some of the biggest, and most common, mistakes that property investors make.
They…

  • have their heart in the purchase
  • love the flowered wall paper
  • want to live there when they retire
  • purchase the wrong type of property for an area
  • buy in the wrong area
  • buy off the plan and pay a high development premium
  • buy off the plan and the bank valuation does not stack up when complete
  • buy off the plan and they cannot rent it out, because everyone else also settles and tries to rent out at the same time
  • purchase in a huge building where there are too many comparable apartments
  • buy an impressive expensive apartment in the city with great views but low yields and they find it too expensive to hold
  • listen to friends’ and family’s advice who in turn know nothing about the real estate market – Let’s just all stick to our day jobs!
  • do not use a local buyers agent who not only knows the game, but also is an expert in the area they want to buy in

 

Many investors also shy away from investing because they feel they don’t have the experience. Or they procrastinate by reading article after article while the opportunities run past them.

The reason many investors in residential property don’t succeed is because they haven’t done their research, or they haven’t adequately analysed the situation.  Couple these common mistakes with the fact that many would-be investors lack negotiating experience and the result is not surprising: they end up spending more than they should have for a questionable investment property.

These common and expensive pitfalls can all be avoided if you engage Tracey – you can be confident that your time and money will be well invested.

Tracey totally understands SMSF’s – she buys properties in her own personal SMSF – if you have a SMSF and would like to build a property portfolio in there, call Tracey.  If you would like a SMSF setting up, Tracey recommends her own personal Accountant, Mons Navarro, Dueo Accounting – (www.dueo.com.au) who specialise in SMSF’s.  If you need to borrow money in a SMSF, there are only a handful of loan brokers who understand all the rules, Tracey can recommend these loan brokers.

 

Do your research

Here are some questions to ask yourself.

  • What is my ultimate goal? Why do I want to buy investment property?
  • Will I be able to hold on to my investment if the interest rates go up?
  • Do I buy a studio?  a 1,2, or 3 bed apartment? Or do I buy a house?
  • What property type is best for each area?
  • Why does Tracey not recommend serviced apartments or student accommodation?
  • I have heard of a good location, but which are the good and bad pockets within that location? (That is if it is a good location).
  • What is the recommended amount of money that I spend on an investment property?
  • Is it best to rent furnished or unfurnished?
  • Which Property Manager is the best in the area that will look after my property well and achieve the best rents?

 

Property Rule No. 1:  1-2 properties will not secure your future

1 or 2 properties will not be enough to secure your future. You will need a “portfolio”. A “portfolio” means a collection of investments held by an institution or a private individual.

At some point in the future, you will want to pay off any remaining mortgages on your investment homes. If so, you need to acquire more properties than you intend to ultimately hold onto. This way you can pay off any remaining debt and still have at least 4 fully paid-off properties. These will be the ones delivering you a steady rental income for the rest of your life. Depending on your lifestyle, you may need more than 4 properties!