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The world of real estate can be overwhelming and intimidating at first to novice investors. Property investment is not for the weary. One misstep and you could lose thousands of dollars. The good news is you don’t have to go through an arduous trial and error process to figure out the do’s and don’ts.
To help you better navigate property investments, we’ve listed down the most common first-time investor mistakes below. Avoid these property investment blunders:
Letting your emotions lead
When it comes to property investments, your emotions should take a backseat. Real estate is a unique area because it can get people emotional. Some may fall in love with a property so much that they view it as a homeowner instead of a property investor.
Approach property investments like you would any other business venture. Think about your bottom line as an investor and keep a critical and objective eye. Having a level head can save you from making expensive mistakes.
Not having an investment strategy
It’s easy to get caught up in the excitement of a new investment venture. A lot of first-time investors get ahead of themselves and snap up the first property they see without a plan. Often, they realise too late that the property they bought doesn’t align with their long-term investment and financial goals.
Many don’t realise that setting clear investment goals is crucial to the whole property investment process. Your objectives will dictate the type of strategy to implement and what kind of property you should purchase.
For instance, if you want a passive income stream, purchasing a rental property would be the ideal move. On the other hand, for those who want a short-term investment with quick returns, flipping a property would be the best fit.
Skipping the market research
Real estate is all about location, location, location. Each suburb follows its own market trends that may be quite different from what you see nationwide. Many first-time property investors fail to localise their real estate knowledge and end up making ill-informed decisions that could become costly errors.
The best way to avoid this fate is by concentrating your market research on a few specific areas. Look at the investment opportunities in different suburbs and see which one matches your goals better. Save yourself a lot of trouble by doing your homework and understanding the pros and cons of each locale.
Not calculating all the costs involved
Some novice property investors don’t realise that there’s more to a property purchase than the sale price. You have to think about the maintenance costs, property taxes, insurance fees, renovation costs, and capital gains tax (depending on what you plan to do with the property). All these expenses can add up quickly and take a toll on your finances.
The best way to avoid this mistake is by getting ahead of it. When calculating costs, include the additional fees so that you can adjust your budget accordingly. Avoid the financial stress of going over budget by taking all the costs into account.
Only looking at the interest on your loan
There’s more to an investment loan than its interest rate. Of course, it’s always a good idea to look for low-rate loans. But you also need to look at the loan terms and features too. Some loans may have low interest rates but high hidden fees which could increase the overall cost. Or these loans could have unfavourable terms that restrict your investment options.
We know how hard it is for investors to find the perfect loan that matches their situation. That’s why we offer a range of investment loans for you to choose from. Whatever your situation, we have investment loans that can help you achieve your investment goals.
Talk to our lending specialists about your investment needs and find the perfect loan for your property investment!
