Investing in property is one of the most lucrative ways to build wealth – there’s no doubt about it. Whether it be part of a growth strategy to meet your financial goals or to create a nice nest egg to retire on, property is a tried and tested financial strategy. And with Australia’s property market continually booming, there’s never been a better time to start getting into property investing.
The prevalence of property investment opportunities does not mean that the practice comes without risk. And while many investments require careful consideration, it’s important to also get your head wrapped around common investment mistakes, so you can safely avoid making these mistakes – whether you’re a novice or seasoned investor. 
Here are some of the most common and easily avoidable mistakes to avoid in property investment:
1. Not having a long-term plan
Every successful investment (property or otherwise) starts with good planning. Those new to property investment often look at what kind of returns they will be getting in the short term (next few years) instead of planning for the long haul. While it’s not entirely unfounded to expect quick returns, properties are assets that are most lucrative over longer periods.
Don’t get caught up with the market’s fever of buying — think about your goals for the investment, your finances, and what it takes to make the purchase before diving straight in.
2. Not doing enough research
Research is a time-consuming and especially arduous process for many new investors. Knowing what to look for and where to look are things that seasoned investors will be familiar with, but until you get to that stage, it’s generally better to do your due diligence and get as much information as you can about the local market and property you want to invest in.
Fail to do sufficient research and your seemingly valuable investment might end up being a loss — and there are so many factors that could affect the value of a property, from structural issues to where it is located.
Spare no expense when asking questions; the more you can find out about a potential investment property, the better, as this reduces the likelihood of your stumbling onto a hidden problem later on.
3. Choosing to only buy locally
One of the biggest mistakes among investors is the tendency to only buy locally or in locations that they are familiar with. The mistake here comes down to the opportunity cost of doing so — this approach severely limits the available options for investment.
Australia’s property market is expansive – being open to the many investment opportunities across each state and territory will award you with more rewarding, suitable options for a potential investment.
4. Focusing on cheaper properties
4. Focusing on cheaper propertiesProperties that are priced low now, don’t always represent a ‘good’ deal for property investment. Lower-priced properties are, more often than not, located in less-than-ideal areas that may not have the transport links or amenities required, and therefore, don’t have a lot of potential for capital growth.
Instead of filtering investment prospects solely by price, investors should look at the property purchase as a whole: house, land, location, and everything else. Good investments almost always feature a favourable mix of these elements instead of merely being well-priced.
5. Making an emotional decision
When buying property as an investor, there are a different set of considerations compared to what you might be considering when purchasing a home to live in. Elements of the property (such as bedroom size) will come down to preference, whereas proximity to transport or amenities is an important investment consideration. You will not be residing in the property, nor are your likes and dislikes representative of the target market. Make sure that you make your decisions objectively, rather than purely choosing a property because it’s somewhere that you would enjoy living.
6. Underestimating the costs involved
6. Underestimating the costs involvedThe costs of owning a property go beyond meeting monthly mortgage repayments — expenses including the upkeep of the property’s exterior, the need for structural renovations, as well as the costs of insurance coverage and property taxes often add up to a significant amount that most investors don’t see when deciding to pull the trigger on a purchase.
To avoid falling into a situation where you are met with unexpected costs down the line, compile a comprehensive list of all the costs associated with the ownership and maintenance of the property, based on realistic estimates. Understanding these costs will allow you to budget appropriately for your investment, as well as figure out a more accurate projection for your return on investment.
7. Going in blind
Building a successful property investment portfolio is no walk in the park.
Many aspiring investors assume that they can ‘learn as they go’, and choose not to get any professional financial or property advice before diving straight into their first purchase. Even seasoned investors tend to find the process of looking for an ideal investment challenging and find that seeking expert advice can significantly enhance their decision-making process and chances of success.
Getting the help of an experienced property professional like a buyer’s agent who knows their way around the different markets and current property market trends can help you in making the right investment purchase. At Aus Property Professionals, our team of investment buyer’s advocates specialise in helping our clients look for the next lucrative addition to their portfolio. With our expertise, you’ll be able to avoid all the common mistakes of property investment to achieve a valuable property purchase that will continue to deliver results in the years to come.
