Article by Brendan Casey
Talking to a financial adviser can help you from making some crucial property mistakes.
A changing landscape can be enough to spook plenty of Australians from investing in the property market. But it doesn’t necessarily mean you can’t pick up a bargain, if you do your homework.
When it comes to property investment, it’s important to not get caught up in shifting market forces, and keep your eye on the long game.
Independent property investment adviser Mike Harvey says you need to not get caught up listening to ‘panic merchants’ about property jumping up or down over weeks or months.
“It’s important to remember that property investment is about maximising your personal financial situation over time,” Mr Harvey said.
“Understand your goals, create a strategy, ideally partner with an expert, decide on the property type you need to fit that strategy and be smart in buying it.”
It’s important to not get caught up in shifting market forces, and keep your eye on the long game
If you are looking to invest in property this year, the On Your Side investments owner advised buyers to play it safe.
“Avoid risk areas that are affected by single industries like mining, farming, aquaculture, tourism etc and stick to reliable growth cities such as Sydney, Melbourne, Brisbane or even Adelaide,” Mr Harvey said.
“South East Queensland is the zone that has all the key factors lined up for growth and in particular, Brisbane.
But when you’re looking in these bigger cities, there’s one type of dwelling that Mr Harvey says to steer clear of.
“You should avoid units, especially near the city,” he said.
“Instead, look for reliable, easy-to-rent growth assets such as house and land in the middle to outer suburbs where you can buy below the median price.”
AJ Chand, founder of Instarent, an app that enables you to manage your own investment property, has put together a list of property investment mistakes to avoid in 2019.
– Avoid selling your property just because it has dropped in value
2019 will be challenging for some. Real estate investment is a mid to long term game. The property market will come back up and will be even stronger in a few short years. Selling now means a lot of people will realise losses. Unless you have to sell due to financial pressure, find a way to keep your property and keep focusing on the end goal
– don’t do nothing
Falling values require action. Rents are falling in some parts of the country as property values fall. Find ways to save money or make more money from your investment. This includes taking it out of long term rental and putting it into short term rental such as Airbnb or Stayz.com.au. You may well make more money this way. Manage the property yourself. Apps like Instarent make managing your property yourself easier and much cheaper than using a real estate agent
– Not looking after your tenants
Difficult markets require giving your tenants more TLC. Do things to make them feel loved and valued. Make sure you deal with maintenance issues quickly. Do extra things to help them out such as asking them if there any maintenance items which require checking. Proactive landlords retain tenants. If you don’t do this in this market, you’ll lose them and they will go elsewhere leaving you with an empty property and more fees to pay the agent to re-let the property.
Don’t just buy because it may be a bargain on paper.
– Don’t just buy because it’s a bargain
Don’t just buy an investment property because the property value has fallen and it is now more affordable. Property values are still rising in other parts of the country. Look around and make sure you purchase a property which offers good overall stable growth and won’t be affected by a downturn
– Don’t accept questionable tenants just because it is income
Some tenants are never a good fit for a range of reasons. Always, check applications thoroughly. A renter with a good rental history is always the preferred way to go. A good tenant who looks after your property is an asset
– Don’t allow insurances or other important cover to lapse
It is important to maintain insurance cover and ensure it covers all the key things including loss of rental income
At any time you wish to discuss your property or the Real Estate market in general, contact us so that we can help you achieve your Real Estate goals