Property Investors: What Makes Them Tick?

Do you ever read journals like Australian Property Investor magazine and wonder to yourself Gee! How is it that these Mum and Dad investor types have the knowledge, confidence and skill to build a property portfolio so quickly? Theres got to be more in it than just a good magazine article here and there! Well, youd be right. There IS more to savvy investment than reading the right magazines (or blogs). Todays Max Ivanoff Max Performance blog looks at a few specific attitudes that divides professional property investors from hopeful want-to-bes. Good news is theyre all basic and achievable with a little elbow grease and thinking time.

• Research First

Aim before firing, and not the reverse. Property investment can reap substantial rewards if gone about in a measured way. The basis of being able to invest in a measured way comes down to time spent in research (or reconnaissance if youd prefer to feel more like James Bond!) As then-US Defence Secretary Donald Rumsfeld made famous in a baffling speech, all unknowns are unknown. So it is with property in an area you know nothing about you dont know what you dont know. Before purchasing, make sure to do your research with a fine toothcomb by looking at databases of past sales and rentals. The Real Estate Institute of Victoria and RP Data provide valuable local data for minimal subscription fees.

• Its An Investment

Too often, investors are irrationally inhibited when it comes to purchasing a good property because they cannot imagine themselves living in it. Perhaps they live in a large, modern family house in the outer suburbs and the idea of paying $450,000 for a one bedroom in East Melbourne seems illogical. Not illogical because of the strong rent return or potential capital growth. Illogical because they cant see the value in physically paying $450,000 for a property which is substantially smaller than their own home which may be worth a similar amount, but is further from the city. Take yourself as an occupier out of the situation and look at the raw numbers. Rental. Body Corporate Fees. Council Rates. Management Fees. Does it add up? Make a rational decision for your long-term financial security.

• Too Good To Be True? Probably Is.

Be cautious when a deal seems too sweet. Likelihood is, its being artificially sweetened to make the proposition irresistible in the short-term. Rental guarantees, serviced apartment leases these kinds of investments must be examined carefully to see if theyre worthwhile having in your portfolio. Things which are inexpensive are generally so for a good reason so undertake your due diligence now. Is this a property that a reasonable person could live in now? Could you sell the property now and at least break even? What kind of rent would the property receive if it did not have a rental guarantee in place? Are the body corporate fees here normal for this area and the amenities provided? As the adage goes good things come to those who wait. Like any good garden, strong growth takes a good season or two.

• Enlist The Professionals

You may be a savvy investor and a teacher, professor or farmer by trade but you might not have all the knowledge of an architect or town planner at your fingertips. If youre in any doubt about the structural integrity of a property, or you would like to double-check that you CAN knock it down and develop (if thats your plan)  make sure to invest in the services of a professional planner or Archicentre  surveyor. Look to the council the property falls within for zoning details and more. Clever investors dont do it all themselves!