First Time Investors
As a first time investor, there are a myriad of traps you can fall into if you don’t follow the correct process to ensure you invest in the right property and have the right structure around you to ensure success.
At IFP Advisory, we are here with our wealth of experience and industry contacts to help set you up for success right from the start. You don’t need to run the gauntlet and learn from mistakes – just skip that step right now!
If you are planning on making your millions from investing in real estate, here are the mistakes that we will help you avoid:
- Investing With Your Heart Over Your Head: Purchasing an investment property is a vastly different decision making process than purchasing a home to live in. Allowing your emotions to cloud your judgement could set you up with a property that is not suited for rental, or you may overcapitalise on the investment in the heat of the moment. You should only buy an investment property if it meets all of your investment criteria and goals based on the research done around it’s returns. (Luckily, we do this for you and provide you with a short list of properties that each meet the predetermined criteria we set at the start!)
- Failing to Plan: As per the first point, successful property investment requires you to set goals, both short term and long term to ensure each investment decision you make is working towards your end goal. (Never fear, we will help you establish what your end goal is, and then work back through short and longer term goals to ensure you are on the road to success)
- Being Too Impulsive Or A Procrastinator: Both ends of this scale can result in a failed investment property career! If you act too impulsively or expect to be a millionaire overnight, you are bound to make a mistake with the properties you choose. Conversely, if you are so over cautious that you can never sign on the dotted line, your chances for success are also limited. You need to find the happy medium to ensure you are well informed and comfortable about your decisions, but not expecting to know it all, as there is always more to learn (By using IFP Advisory to help you, you can have all the knowledge you need at your fingertips and get a start on your investment portfolio surprisingly quickly)
- Poor Money Management: There is a lot to understand around all the costs involved in acquiring and holding property. It’s not only about paying the loan, but also around upkeep, insurance, regular outgoings, unforeseen expenses…..How much income will your investment generate and will it be enough to cover your outgoings? Have you got enough in reserve to manage any shortfall or contingencies such as extended vacancy periods or unexpected maintenance costs? (This is an area that you certainly need expert advice and experience to ensure your investment works for you and not against you and with experienced and qualified accountants, IFP Advisory can do with their eyes shut!)
- Getting Your Financing Wrong: There are a plethora of financing options out there and if you choose to go it alone, not only will it be time consuming to wade through all of your options, but if you get it wrong it could cost you thousands in the long run. Setting up an incorrect financial structure will be just as detrimental to your investment success as purchasing the wrong type of property. (IFP Advisory have accredited, experienced loan agents on hand who will walk you through this process to ensure it is smooth, hassle free and right for your needs)
- Property Self-Management: Many investors think they can save money by self-managing their portfolio – this means finding their own tenants and acting as their own property manager in terms of collecting rent, auctioning maintenance etc. In the short term it sounds feasible, but if your goal is to own multiple properties this will become a full time job in itself. Taking advantage of a qualified property manager will ensure you have qualified suitable tenants, knowledge of the laws pertaining to renting, regular inspections, rent collection, representation at the tribunal should something go wrong, and 24/7 contact for your tenants. You can then put your time to building your portfolio, not managing it! (We can point you in the right direction here too)