The average property value in Australia has been growing at 7% per year for over 100 years.
That’s a pretty consistent growth rate.
No wonder so many people look to property for a suitable investment to grow their worth.
With a growth rate like 7% you’d be mad not to.
But it’s not as simple as buying a house, sitting back and waiting for the money to roll in.
Just because you live somewhere doesn’t mean you should buy an investment property there.
There are so many things you need to take into account to make sure your investment property is going to be profitable.
Do you know what they all are?
Not many people do.
That’s why we’ve put together the three biggest mistakes people make with investment properties.
Failing to check geographical restrictions in a potential area to limit the future supply of property.
When looking at an investment property you need to look carefully at its geographical location.
Restrictions on the future supply of property mean your property will be in a smaller minority.
Having a more exclusive location can make your investment more profitable.
Failing to use a reputable source for a potential properties valuation.
Have you asked the local real estate how much the property you are looking at is worth?
Bad idea… They’re only going to inflate what they tell you to try and get a sale.
You need to find a non-bias valuation provider such as the bank to provide you with an evaluation.
Even then it’s a good idea to get a second opinion.
A small upfront cost here may save you a whole lot of money in the long run…
Forgetting to do a thorough check on the areas historical and forecast population growth rate.
It’s not just enough to look at areas forecasted population growth rate.
You need to check it’s historical growth rate as well to get a solid idea of the area’s performance.
Look at population trends from the last twenty years to gain an understanding of what’s happening in the area at the present.
Why is this important?
It goes without saying that if the area has demonstrated a steady growth in the past and is forecasted for growth in the future then there’s always going to be a rental demand.
This is important if you want to have a profitable investment property.
These 3 mistakes may seem obvious to more seasoned investors but for those of you who are new to the investment property market, you want to make sure you have all the best information on hand to make an educated decision about where you invest your money.
Investing in property is a big deal and even If you already have one or even two it’s important to make sure they are performing.
The last thing you want to have is investment properties that aren’t performing.
If you want to have an obligation free chat, we can give you a quick call and organise a free appraisal on your investment properties to put your mind at ease that they’re performing.
Or if you’re thinking about getting an investment property we are happy to give you some free advice on whether or not it’s a good idea.
We’ve been doing it for over 20 years and are only too happy to give you some free advice.
At the end of the day when making investment property decisions it’s a good idea to get all the help you can.