We are currently experiencing some favourable property investing conditions, with interest rate cuts, motivated vendors and discounted properties helping to make this a buyer’s market.
But don’t rush in without being aware of these common mistakes that can hamper your chances of success.
1) Not having a property investing strategy
A lack of a property investing strategy or buying rules is probably the biggest mistake that new investors make.
Many investors will take the plunge and buy a property, and then try and figure out what their strategy is afterwards. This is doing things in reverse. To give yourself the best possible chance of success, you need to pick a strategy and decide what your long-term goals are, then find a property or properties to match.
There are many different types of strategies that can be employed by real estate investors and their relevance always depends on the investor’s individual circumstances, income and time of life. They include:
- The Renovation Strategy – This is a strategy used by real estate investors who buy properties, add value through renovations, and on sell them quickly.
- Capital Growth Strategy – Investors who buy properties in areas with high rates of projected capital growth to provide equity in the future – e.g as a retirement plan.
- High Cash Flow Strategy – This is a strategy often used by investors who want to use their income from real estate investments to fund their lifestyles.
2) Lack of market research
Too many investors dive in without doing enough research on the suburb that the target property resides in. Here are some of the things you need to consider;
- Suburb / postcode performance trends – are prices going up or down where you intend to buy, what is the make up of mortgage holders vs renters?
- How long properties are taking to sell in your suburb – so you can get a idea of the level of demand
- The median price for similar properties in the area - so you can tell (broadly speaking) whether your target property is priced competitively
- Study the area on the council website – so you can ascertain if there are planned developments / infrastructure improvements etc locally which can increase prices in the future
3) Paying too much
Probably the biggest reason why investors don’t make money is also the most obvious, paying too much for the property.
Often the cause for this is relying on third party advice, and it’s easy to see why this may happen when the bank, valuer, vendor etc will all have a different opinion on what a property is worth.
In a market like the one we are currently experiencing (motivated vendors and discounted properties a plenty) there is no real excuse for the savvy investors amongst us not to pick up properties at a discount and get that instant equity that is every investors best friend. So how can you do this?
- Make up your own mind on what the property is worth, and do it using the very latest data.
- As a minimum, find out the sales history of the property, the on-the-market history and what comparable properties have sold for recently.
The more information you can get hold of using the latest, reliable data, the better informed you are going to be when making an offer.
4) Going it alone
It is the common mistake of first-time real estate investor to take a DIY approach.
Consider the benefits of having a team of expert professionals in place before making serious decisions about properties to add to your investment portfolio. If you can, get this team together to be called upon when you need them;
- Contractors such as plumbers, painters, cleaners, pest controllers
- Solicitor
- Valuer
- Property manager
- Financier / mortgage broker
- Accountant
- Building / pest inspector
- Real estate agent
Forge long-standing relationships with people you trust very early on in the piece and seek advice before you start making conditional offers on properties.
Choosing the right experts will reduce your investment risk right from the start, and no doubt save you money and mistakes in the long run.
5) Missing out on opportunities because others have got there first
Most investors can tell you a story of an amazing deal that they just missed out on, the one that got away.
Hardly surprising when the traditional way to find property investments has been scouring classifieds or trawling through property listings websites, whilst there are over 1 million other property investors out there in the market.
Well, times and technology have moved on and there is no longer any reason for investors to make these common mistakes.
How Real Estate Investor can help!
Real Estate Investor develops and provides revolutionary real estate software and tools for property investors – which can help you avoid the common pitfalls that dent many investors’ chances of success.
The forthcoming exclusive webinar demonstrations and Fast-track to Property Profits Live Workshops will show you:
- How our search engine can find just the properties that match your investing strategy, from the hundreds of thousands that are currently on the market, helping you beat the rest of the market to the best deals
- How you can quickly and easily get information about a suburb’s performance to complete your due diligence
- How you can estimate the value of unlimited properties online using the platform the banks, agents and valuers use
- The simple way to find discounted and positive cash flow properties
- How to manage and optimise your portfolio to maximise your profits
To register for a free, Real Estate Investor, no-obligation webinar demonstration, please click here.
Or you can attend a free, Fast-track to Property Profits Live Workshop, by clicking here.
Attendees to both will receive a free ‘Top 200 Highest Yielding Suburbs in Australia” Report valued at $199.
Good luck with your investing!



