When it comes to purchasing an investment property, make sure you consider all the influencing factors that can help you make the right decision. Apart from keeping yourself informed, it is equally essential for you to do your own research – this will save you from committing common mistakes while investing property in the Brisbane real estate market. Unfortunately, most of the investors give away their buying power by making wrong decisions. If you want to ensure success and generate higher returns, you need to avoid the five biggest blunders made by property investors:
Depleted Financial StructuresDrafting financial structures without the estimated of required finances is one of the biggest blunders. Those who take interest-only loans without saving a buffer face a lot of difficulties in re-establishing their financial needs. Instead of spending everything on your investment property in Brisbane, it is ideal to save a little extra cash to meet those unexpected spending. So, make sure you create well-defined and realistic financial structures before heading towards bidding wars.
Lack of Due DiligenceMost of the investors buy properties from agents who know the trick of marketing. They can sell you three bedroom-2 bathroom units in a matter of a few hours. And the worst part is that investors trust them without doing their part of the research. Whether the property is good for you or not, you have to indulge in thorough property market research to understand what is right and what is wrong for you. Investing a big chunk of capital without double-checking their research is one of the biggest mistakes. So, avoid it and look for the factors that can help you determine your investment goals in a better way. In short, do your own due diligence, such as looking into any future residential developments planned in that particular area. Also, consider the property price growth in Brisbane to understand the complicity in the property market. It is important to understand the right property valuations before stepping into any deal.
Lack in Creating StrategiesPurchasing a property just because other people are becoming wealthy is not a good strategy to get into the property investment market. To an addition, investors are intentionally losing money on the property using Negative Gearing. The Australian Government has influenced investors that losing money in the desire for capital growth is the best part that you will do. For example: Giving up $2 to get 60 cents back is not at all a good deal. In fact, in some regions of Australia, including Brisbane, there has been zero capital growth for the last 12 years. This means investors have lost money for 12 years and had zero capital growth- this is called a bad strategy. Tip: Read Complete Guide for First-Time Home Buyers if you want to become a successful property investor across the Australia.
Over-borrowingGetting over-confident is counted as one of the inevitable mistakes committed by property investors. The decision of buying multiple properties won’t be justified if you don’t have enough funds for all these properties. The worst part is that refinancing becomes impossible if an investor has already borrowed to their limit, especially due the strict lending restrictions. You can’t take a chance to over-borrow funds to fulfil your multiple property investment needs. In fact, selling the property within five o seven years to buy a new one will leave you nowhere. So, it is good to estimate your budget and take investing decisions accordingly.
Overlooking Asset ProtectionAcquiring property in your own name or a company’s name can be dangerous and increases the level of risk. It means you will be personally liable to pay for the damages of property. While taking insurance will cover you from unwanted losses, make sure you hire an experienced insurance company that can project your property for a long time.