Investing in property can reap massive rewards – do it right and you could be living dreams of early retirement. In fact, CoreLogic’s Pain and Gain report reveals that over 92.1 per cent of people who sold during Q1 2016 made a profit, at an average of $239,855 per sale.
On the flip-side, if you do it wrong and you could be in for some financial difficulties that may affect your ability to repay your investment home loan and put all of your savings at risk. To help ensure you’re in the former group, read on to discover three of the most common mistakes that fledgling investors make when buying property.
Spending several hundreds of thousands on buying your own little piece of Australia is an extremely exciting and emotional experience. Because of this, it’s easy to get overrun by excitement and make poor decisions that may jeopardise the profitability of your investment.
Instead, it’s absolutely essential that you approach the decision with a level head, buying based on a property’s potential to make a profit rather than other emotional factors. To buy logically, not emotionally, you must do plenty of research on the property and the market, in order to forecast the future of your investment.
Not doing your homework
In order to ensure that an investment will be profitable you must use all information available to you to inform your decision. This will include looking at property price trends in the wider area, and specific suburbs, as well as carrying out both a pest and building inspection.
For example using the NAB’s 2016 winter housing report, we can see that units in Brisbane are forecasted to decrease in value by 1.8 per cent by 2017. Houses in the same area are expected to increase in value by 1.9 per cent during the same period, making them the smarter investment. Simple insights like this can be the difference between success and failure.
Not organising your finances
Poorly organised finances and unsuitable loan products will cause you plenty of stress and might deplete the profits of even the smartest investment. Instead of working out the logistics yourself, seek out the advice and expertise of an experienced Australian mortgage broker. We know exactly what’s required for investment success and can help you find the most suitable loan product for your needs.
You can contact a Smartline Mortgage Adviser on 13 14 97 for mortgage advice. Or complete our call request form and we’ll call you!
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.