Creating a portfolio of investment properties can be a great way to earn a passive income if you have the means to do so. However, investing in property does not come without risk. It can be particularly challenging to navigate through the process of investing if you are just starting out. There are some key things worth noting before you invest in real estate.
Investing is deemed a long game as you’re unlikely to reap the benefits straight away. Every prospective investor must know what they’re getting into before making an offer. It’s important to seek advice from professionals in the first instance. Or ask yourself the following questions before you commit. This will help streamline the process.
The most common mistakes that property investors make:
The rental market has changed considerably over the last few years. Consulting with a professional property management company before you sign on the dotted line will prevent unpleasant surprises later down the track. A property management company can guide you through the investment process and help avoid any unpleasant surprises along the way—particularly issues relating to compliance with legislation changes that will affect your rental property and ultimately your income.
It can be easy to get carried away when you find the perfect property. However, unexpected costs can arise, so it’s important that hopeful investors remain within their allocated budget. For instance, the possibility of having to pay for additional fixtures to ensure the property is compliant with the Healthy Homes Standards. It’s important that you don’t stretch your budget so thin that you can’t afford the additional costs, as this will negatively affect your rental income.
It’s important to identify what maintenance the property will need to undergo before it is ready to be rented out. It’s essential to request building reports and review these carefully to ensure you undertake the necessary work on the property.
The more desirable a property's location, the more interest you will have from prospective tenants. However, this often equates to higher property prices. If your budget is restrictive, look for where there is demand for rental properties. Key factors to consider when selecting the location are; within good school zones, close to public transport and nearby amenities.
If you have any questions about investing in a property, get in touch with your local Quinovic office. We’re a nationwide team of property management experts and have managed over 100,000 tenancies since 1988. No matter how big or small your question is, we’ll be happy to help. Ask Quinovic today.
