One of the reasons why people find property such a good investment is that it generally provides stable and increasing returns over the long term. Obviously good property investments will always do better than poorly thought out or badly managed investments. Property experts suggest that there are ways that investors can minimise their risks to ensure their assets will provide a secure base for future wealth.
1. Conduct Proper Due Diligence
It is an amazing fact that some people still buy investment properties without doing their homework first – or what we’ll call due diligence. Perhaps they go to one open inspection or turn up to view a display apartment for an off the plan development and decide to put a deposit down, then and there. They are either very confident about their “gut feelings” or have enough money that one poor investment won’t break the bank. For the majority of us, however, this is not a viable option. So when it comes to property investments, what do we mean by due diligence? With existing properties this will mean looking at a range of factors such as the body corporate and the associated fees, getting a building report done by a professional to and reviewing the contract for sale. For off the plan developments the due diligence should take the form of researching the developer and past projects as well as carefully reviewing the initial deposit terms and sale contract to ensure you are happy with the terms.
2. Buy As An Investor, Not A Resident
Again, another mistake that investors and especially first time investors make is that they find a property they “love” and buy it. Buying a property investment – one that will grow and make money over a 10 to 15 year period – should be a business decision and not one based on feelings or emotion. Unless you are planning to move into the property in your later years, your decisions about the property should revolve around things like its location and access to facilities and amenities such as transport, schools and shopping, the average rental returns in the area and the features likely to attract high value tenants.
3. Get A Good Property Management Team On Your Side
Finally, the ongoing management of an investment property can be a challenge for investors unless they get professional help. It is particularly important as an investor to focus on a strategic view of your assets, rather than getting “bogged down” in the day to day running of them. Do you really want to be trying to organise emergency plumbers on a weekend for your investment properties, or finding suitable tenants in the event of a vacancy? Finding a good property management company such as Ironfish can greatly reduce the amount of time you spend worrying about your property investments as well as ensure that they are managed professionally.