Whether you’re a first-timer or looking to add to your extensive portfolio, here are the most common property investor mistakes to avoid.
5 Property investment mistakes to avoid
1. Not doing adequate research
First things first. It’s imperative that you research Inner West Sydney before investing here so you understand current market conditions and demand.
Work with an experienced local team like Belle Property Balmain and we can tell you exactly what tenants are looking for in terms of property type, features and amenities. At the moment, the more popular choices include mid-priced two-bedroom apartments in and around Balmain.
We work with you to ensure your property is never vacant and that you receive the highest rental yield possible.
2. Not having a financial plan
No matter what stage you are on your property investment journey, you must define your financial and investment goals. Your investment goal might be fast capital growth or a long-term strategy where you benefit from the rental income.
Your financial goals include whether it will be a negatively or positively geared property. About 54% of Australian properties are negatively geared, which means they operate at a net loss. But this loss equals tax benefits and higher capital growth opportunities. While this might seem to be a good long-term financial goal, remember that you will be losing money, so this might not be the best short-term strategy.
In contrast, positively geared properties include a net gain, so the main benefit is the source of income.
Whatever you think might work for you, you should get advice on your financial strategy from a professional and accredited financial adviser.
3. Failing to conduct pest and building inspections
This property investment mistake can cost you money down the road, so we strongly recommend getting both a building and pest inspection before purchase. If you buy a Belle property, we encourage this and can help organise it for you. That way, you know exactly what you’re buying and whether the property is worth the price.
4. Not hiring a property manager
An estimated 80% of investors hire a property manager in Australia. In Sydney, they typically cost 5-12 per cent of your weekly rent. But this is just a glimpse of the duties we take off your hands, saving you so much time, money and effort:
- Collect and deposit rent into your account.
- Manage other bills if requested.
- Market your property and screen tenants.
- Prepare the lease and other required documents.
- Conduct property inspections.
- Organise maintenance and repairs.
- Respond to emergency issues.
- Chase up arrears.
- Ensure compliance with state and federal regulations.
Because we understand the local market, we also know the right rent to set. Let us look after your investment property.
5. Selling at the wrong time
One of the biggest property investor mistakes to avoid is selling at the wrong time or out of fear. Sometimes the upfront costs or market downturns can scare investors into selling prematurely. However, if you have a long-term investment strategy, remember an upturn always follows a downturn and the property value will inevitably increase.
For example, Sydney’s property market is currently facing a severe rental shortage. You can basically guarantee your investment property won’t be without tenants. Plus, unit rental prices increased nearly 25% between July 2022 and 2023. There’s never been a better time to invest in Inner West Sydney.
Why you need our team on your side
To avoid these property investor mistakes, talk to the friendly team at Belle Property Balmain today. By staying up to date on current market trends in the Inner West, we offer the best advice so you get the best rental yield. With both sales and property management divisions, we’re a one-stop property investment shop.
Can we help with your Inner West home?
Whether you’re ready to sell or need help to rent your investment property, we have the experience and local knowledge to make your property journey easier.
Looking for help selling your home or renting your investment property? Our team at Belle Property Balmain support homeowners across Balmain, Balmain East, Birchgrove, Rozelle and Lilyfield. Feel free to get in touch for a no-obligation discussion or property appraisal.
