Everyone starts off as a first time investor, stumbling up the property ladder and making mistakes along the way. However, having had people come before you, it's possible to look at the common mistakes being made by others and figure out how to avoid having the same fate occur during your investment endeavours. The reason for investments' increasing popularity shouldn't be surprising – it's a wonderful way to supplement your income and begin earning towards your future.
But before you charge into the Surfers Paradise property market guns blazing, there are a number of pitfalls you should be aware of. After all, the amount of money you're putting up isn't small change, so taking your time to ensure you make the right decision is paramount. There are a number of things to consider before settling on any one property – here are some of the common mistakes made by first time investors.
Of course there are perfect market circumstances that can help you get the best value for your money: when interest rates are low, property demand is high and the potential for capital gains is extraordinary. Unfortunately, the potential for all these things to align isn't an easy thing to achieve. But taking your time to observe the market can help you to avoid making silly mistakes.
Spending some months looking into a market and keeping an eye out for telltale economic signals that a suburb is on the up or down will ensure you don't make an expensive mistake. Patience is a virtue after all, and can protect you from making an ill-advised purchase as a first time buyer and putting you off the market forever.
That's not to say you should wait too long either, otherwise you risk succumbing to inaction. There's a degree of risk involved with investment, but don't mistake this for ignorance.
Being well informed when becoming a property investor is the strongest weapon you can wield in the market. When you're looking into property, ask yourself just how well you know the local market. This is the time to be looking to the wide wealth of information available to you through the internet and local real estate agents, to collaborate and create a plan in your head.
Things like median house prices, auction clearance rates, rental yields, vacancy rates and buyer demand should all weigh in on your decision to move into the market. Chatting with a professional is the best way to wrap your head around this, especially if they've been working in the local market for a long time – their point of reference for trends can help you nail down just when the market could be in an upswing.
One thing that investors often do is get the property deed in their hands, rent out the home and then wait for the income to roll in. Unfortunately, it isn't as simple as this.
Being a landlord means taking on the responsibility of looking after the properties, even when there are tenants occupying the home. You'll be expected to organise repairs, take care of certain utilities and generally be available to ensure the house operates smoothly.
First first-time investors, this can be a shock. If you're unable to uphold these responsibilities, there are professional property managers that can be hired to fill in for you. They will assume the landlord role for you, allowing you to kick back and enjoy the rewards of your investment without the stress and strain.