tips on property investment

Avoiding mistakes on your first property investment

The combination of strong price growth and low interest rates has got more Victorians thinking about securing their long-term financial future through property investment.

Whilst there are a lot of good reasons that this type of investment is a great choice for many people, we have seen quite a few Victorians over the years that have not benefitted from this type of investment choice, and often for one common reason.

It’s important to keep in mind that every investment decision is an individual one, as it depends on your own circumstances, your long-term goals and your risk strategy. However, the general rule that far too many people make, particularly when making their first property investment, is selecting a property based on cash flow rather than capital growth.

Don’t get us wrong, cash flow is important. It enables you to pay the mortgage and other property-related costs. But it is capital growth that will enable you to make those lifestyle choices that you’ve been dreaming of down the track.

As anyone who really understands the property market will tell you, the properties with higher cash flow potential are almost always the properties with lower potential for capital gains. So be cautious about trying to have your cake and eat it too.

In making a decision to get into property investment you need to be thinking about the long-term game, not ‘making a quick buck’, and this approach applies to property improvements as well. You’ve probably seen lots of programs on ‘Reality TV’ showing you how to flip property and make a profit in a matter of months, but the simple fact is more people get burned by trying to do this than break even, because the costs are simply too high to make it work.

From our experience, the best start you can make in property investment is to make sure you get some experienced advice and help in sourcing the right properties by talking to someone with genuine hands-on knowledge and experience, not some who learned it all from Reality TV!

If you’d like some help in sourcing the right property investment in Victoria, including those off-market properties that aren’t available to the general public, we’d invite you to have a confidential chat with one of our Buyer Advocates by calling 9430 0000 today.