12 COMMON PROPERTY INVESTING MISTAKES

1.     BEING YOUR OWN PROPERTY EXPERT

Ok, so you’ve bought a couple of homes to live in and you’ve made money.

Now, when you’re looking at property to invest in, there are very different criteria.

You’ll be looking at affordability, yields, tax considerations, finance, locations, rental returns, stamp duties, legal, property management, maintenance, and so on.

You can by all means do all of these things yourself – if you like to work hard.

Q.	Do you have access to, and the time to thoroughly research information from Australia’s most reputable economic forecasters and analysts, and property industry experts ?

If not – you are taking a huge risk by making one of the biggest financial investments of your life – without accurate and current information – from industry experts.

We firmly believe in the law of comparative advantage –
‘Let others do what they do best and we can stick to what we do best’.

2.     LISTENING TO PROPERTY INVESTMENT ADVICE - FROM FRIENDS & FAMILY

Haven’t you noticed that everyone is suddenly an  ‘expert’ – with an opinion - when you tell them you're building an investment property portfolio.

And in most cases, people who give you ‘their’ opinion on what, where and how to buy your investment properties, have good intentions.

However – in many cases their ‘opinion’ is not based on accurate property investing knowledge and/or facts.

More often than not it is based on here say or their limited and often negative experiences.

A word of wisdom – based on experience.

When listening to the advice of ‘friends and family’ – seek their qualifications and experience in property investing – prior to taking their advice.

Their negativity, will often ensure that you both enjoy a poor lifestyle in retirement.

A SIMPLE & POWERFUL LESSON – FOR US ALL - FROM A BILLIONAIRE

I’m sure you’ve heard of Richard Branson.
Richard started out running a student newspaper while he was at uni.

Then he started a ‘small’ record label – called ‘Virgin’.
Ring a bell?  We can all learn a lot from Richard Branson.

And then Richard decided he wanted to start an airline.

When he decided to start a record label and airline – he didn’t have a clue how of where to start.

However - he wasn’t going to let that minor detail, stop him from achieving his goals.
So what did he do?

He simply surrounded him with experts in the airline industry –  who worked with him to help him establish an airline.

You might have heard of it -  Virgin Atlantic and Virgin Blue in Australia.

We can learn a great deal from successful people.  And this is a very powerful lesson for us all.

None of us can possible be experts in ‘everything’. 

So – like Richard Branson - it’s vital for us to surround ourselves with a support network of professionals and experts in whatever it is we want to achieve.

And that was never more true than when it comes to something as important as buying property – and putting together a long term strategy for you to achieve financial freedom for you and your loved ones.

3.     PROCRASTINATING - TODAY'S PROPERTY TOMORROW'S FUTURE - CAN YOU AFFORD TO WAIT ?

Knowledge is only powerful – when we take action –
And apply that knowledge to improve our lives.

It’s vital in property investing that you seek the advice of property investing professionals - to help you make well-informed decisions.

It’s when we don’t have professionals assisting us – that we allow ‘fear of the unknown’ to hold us back – from having financial security for our future.

Fear can be crippling – and can hold us back from taking advantage of opportunities that are presented to us – and living the best life we can.

However - when we have experts helping us – it’s reassuring, and takes us from the ‘unknown’ to the ‘known’ – and opens up a huge amount of opportunities for us.

Q.        When is the best time to buy an investment property ?
A.        As soon as you can comfortably decided to do so.

Time is money in property.

And – it’s time in the market that makes us money in property investing.
If you wait – you will simply pay more for the property.

And if you pay an additional $40,000 for a property – because you procrastinated – ask yourself – how long does it take you to earn $40,000 with your job?

We all love to save money – so why would anyone want to put themselves in the position of having to pay tens of thousands of dollars more for a property – just because they waited?

If you are the very fortunate position of being able to purchase in an investment property/s – that’s the time to buy.

We will take care of the rest for you.

4.     BEING EMOTIONAL ABOUT THE PURCHASE

Q.        Do you want to have financial security and eventually - financial freedom?
Q.        What are your fears and concerns about building a property portfolio?

We ensure you have the appropriate ‘safety nets’ in place – to minimise the risk – and maximise the benefits for you.

You don’t have to live in your investment property.

It is simply a vehicle to make you money.

It doesn’t matter if you have a spa in the bedroom at home and the investment property doesn’t, or the window coverings are not what you have at home.

It is a commercial decision – which property will give you the strongest capital growth, save you the most tax, with your contribution being the lowest?

That’s the property will recommend you buy.
This is an investment property  -  and you must look at it from that point of view.

5.     BUYING AN OLD PROPERTY

OK – if you’re a tradesman and have the skills, time and money to do ALL the maintenance - that will almost certain require to be done with an old property – and  – if you want to work hard – not smart – buy an old property.

However – we always have your best interest at heart – and do not recommend that you do so.

And property built prior to 1985 does not qualify for any building depreciation.

A new property – especially if you buy new house and land packages – off the plan – will give you a property with built in profits.

You’ll save thousands of $$$$  on stamp duty.

And you’ll attract a better tenant – and achieve a higher rental return with a new property.

Your tax savings with a new property will be much greater – over a longer period of time with a new property.

So – if you want to save as much tax as possible – do not buy an old property.

6.     BUYING A HIGH-PRICED PROPERTY & BUYING WHERE THERE IS AN OVER-SUPPLY OF PROPERTY

That wonderful $ million property is great for the ego to own – but what sort of return are you going to get?

When economies are running along fine, expensive/high cost rentals are fine – until the economy has a downturn can be vacant for a along time – or the rent must be reduced dramatically to get a tenant.  Either way paying interest on this type of property with no tenant is not good. 

You do not have to buy a high-priced property to maximise your benefits and returns.

The right way to go -  buy what the masses live in !

We will help you buy the most in-demand investment properties, in the best, high-growth locations, for the lowest price – directly from Queensland’s top developers – and before being released to the public. 

BUYING   WHERE   THERE   IS   AN   OVERSUPPLY   OF   PROPERTY

We are very thorough in our research and selection of locations for investment properties, and the type of investment property for our clients.

Remember property values are driven by supply and demand.
Low supply + strong demand  =  strong growth in property prices.

So to protect our investments – and continue to grow a successful property portfolio – we must buy our properties in locations where there is a strong demand – and low supply of properties.

For this reason – we are VERY wary of investing in units/apartments in some locations –    as there is an oversupply of units/apartments in many locations. 

7.     INCORRECT FINANCIAL STRUCTURE  

Buying 50/50 in both partner’s names when one partner is the high-income earner can be costly.

Having the wrong type of loan at a high interest rate, high fees, etc can all be negotiated with lenders by mortgage brokers with access to many lenders, rather than one bank only.

It’s not all about the cheapest interest rate either.  The flexibility of the loan to give you the opportunity to continue to safely and comfortably grow your asset base is crucial.

Our highly experienced, property finance strategist will ensure that you have the best possible finance structure to suit your needs today, and take you to your goals for tomorrow.

8.     WAITING UNTIL THE END OF THE YEAR FOR TAX DEDUCTIONS  

Tax deductions for depreciation of the building, fixtures and fittings can all be received on a regular basis – eg – each fortnight the tax deduction is added to your ‘take home pay’, rather than waiting until the end of the financial year - submitting a tax return and receiving your tax deduction.

Your accountant can arrange this with the Taxation office via a tax variation form.    

9.     MAKING AN ESTIMATE OF TAX DEDUCTIONS EACH YEAR 

Often, people have their accountant make a calculation regarding the tax they can claim.  This may be allowed for some time and then retrospectively disallowed.

The best strategy is this – we arrange to have a qualified Quantity Surveyor give you an accurate depreciation schedule. 

This will ensure that you get the correct and maximum tax deductions for your investment properties – and stay popular with the tax office.

10.   MANAGING THE PROPERTY & TENANTS YOURSELF

Engage a good property manager.  We can refer you to some professional property management companies should you wish.

They have the skills and experience to get a good tenant (eg. You are not a member of the tenant checking association – so how can you find out if a tenant has a bad record with past landlords?) 

Your property manager can and does, plus going through a rigorous reference checking procedure as well prior to preparing a lease etc.

The small fee they will charge you is tax deductible, and after all, this is an investment – so why do it yourself?

11.   NO INSURANCE

Landlord protection insurance is very affordable – and should really be titled -                  

‘ RELAX – SLEEP-TIGHT, PEACE OF MIND INSURANCE’.

It can be purchased at low cost (maybe included in your loan?) and you will be covered if a tenant damages the property, or a fire occurs, the damage will be repaired, you will still receive your rent as well.

With most policies, if a tenant leave prior to the expiration of the lease, then you’ll receive rent until another tenant is in place.

12.   BUYING IN YOUR OWN BACKYARD

Just because you feel that you must be able to ‘drive past and check it out’ - does not make this a good idea.
It will probably feel good because you feel that you know all about you area and so on.

However, Australia is a big place and there are tremendous opportunities waiting in high growth locations.

South East Queensland, in particular has, is enjoying spectacular growth – and the experts are saying that this growth will continue over the next 10 years – at least.

According to the Australian Bureau of Statistics, over 60,000 people per year move to
South East Queensland - to enjoy the lifestyle, low cost of living, employment opportunities and wonderful weather.

South East Queensland is a property gold mine – and there are most definitely locations with will give you very strong growth in your investment property.

Our clients live all over Australia, and all have bought their investment properties in South East Queensland.

Our thorough research and due diligence helps us identify the best locations for our clients to purchase their investment properties, and safely and easily grow their property portfolio.

That way you’ll have the peace of mind - that you’re receiving professional advice, to help you make informed decisions, in other words, we hold your hand and guide you through the process easily, with a minimum of stress.  

Wishing you and your loved ones a happy, healthy and prosperous life and future.