Whether you’re a first-time investor, already hold a portfolio of properties or you’re in the process of upgrading your residential property and want to rent out your current home, you need to do your research before you purchase or sell a Northern Beaches property.
Here are some property investment mistakes to avoid.
1. Failing to do adequate research
When buying an investment property, it’s important to research the area you want to invest in (or sell in). You need to understand the current market and the demand for that area.
For example, are renters and buyers in the area mainly young professionals or families? This will determine the type of property that would be most in demand. For this, you really need to engage a local agent like JDH who understands the area demographics and what tenants are actually looking for.
Getting the right advice will ensure that your property is never vacant and that you will be able to achieve the highest rental yield possible.
2. Failing to diversify
In today’s economy, diversification is everything. The same goes for property investment, especially if you’re trying to build up a profitable portfolio. It’s never a good idea to just stick to one type of property or buy property in just one suburb or region (as we’ve seen throughout the pandemic).
Your intention should be to have a mix of properties that include both houses and units. However, area research should show you that some suburbs have more demand for one type of property over another.
Once again, a reputable real estate agent will be able to help you with this. Your agent will know instantly which suburbs attract more unit tenants as opposed to prospective tenants looking for houses.
3. Failing to conduct adequate building and pest inspections
This mistake could cost you a great deal of money in the long term. It’s vitally important to ensure that you get a building inspection and a separate pest inspection before you purchase any property. It’s definitely money well spent if it stops you from purchasing a property that’s likely to need a lot of expensive repairs.
4. Not planning your investment goals
Remember that owning an investment property is a business. And, as with any business, you need a plan. Therefore, before settling on an investment property, you need to work out your investment goals.
For instance, are you looking for fast capital growth or do you want to hold onto the property for a number of years and benefit from the rental income? Knowing what your property investment and lifestyle goals are will determine the correct property to purchase or sell, as well as which suburbs you should be looking at.
5. Selling at the wrong time
In property investing, timing is everything. If you have a current investment property and are looking to sell it, you really do need to consider whether now is the right time. It may be the case that it will be much more profitable for you to hold onto the property for a few more months or years to get an even better return on your investment.
For instance, currently there’s an acute rental shortage in many areas and there are numerous cashed-up prospective tenants lining up to view every available property. In times like these, would it be more prudent to hold onto your property and continue receiving regular rental income?
On the other side of the coin, the money being offered for your investment property might be too good to pass up.
Why you need an agent who knows the area
At JDH, we know the Northern Beaches property market inside out. Our experienced staff are familiar with the Northern Beaches houses and units that are currently for sale and we also have a handle on the growth suburbs.
We’re on hand to advise you exactly which suburbs and properties would definitely suit your investment goals. Plus, you can take advantage of our capable property management team once you’ve made your purchase.