According to CoreLogic’s Profile of the Australian Residential Property Investor, the value of people’s wealth held in real estate assets is worth more than superannuation funds and listed stocks. While the economy and property market are in an uncertain place, now is a better time than ever to review your investment strategy to ensure you’re on track to realise your long-term investing goals. Here, we share four property investment tips to strengthen your strategy.
Set emotions aside
Warren Buffett famously said, “If you cannot control your emotions, you cannot control your money.” This famous quote applies to all areas of money, from managing your household budget to property investing and planning for retirement. In all facets of your property investment portfolio, you need to set your emotions aside. For example, if you’re looking for a property in a new area, don’t get caught up on how you feel about a place. You need to focus on the numbers such as rental yields and growth potential. Sure, you can have an intuitive feeling about a place, but if the numbers don’t stack up too, that’s not reason enough to move ahead with a property.
Talk to qualified professionals
It helps to talk to a range of qualified professionals throughout your investing journey. Whether you’re looking to refinance or thinking about using the equity in one home to purchase your next, you need to seek specialised advice to ensure your decisions help you in realising your investment goals. Often, the fee to get advice from financial professionals will far outweigh the cost of making a poor investment decision.
Identify and address risks
Like any investment, property investing has its own set of risks that need to be managed and addressed. For an investment property, a lot of the financial risk will be associated with the unexpected such as natural disasters, large scale repairs and maintenance, and long vacancy periods. It’s important that you understand the likelihood of these risks and set aside adequate cash to address these risks should they materialise.
Be careful with hotspots
The next hotspot is always a popular topic in the property investing community. However, it doesn’t mean flocking to this area is going to make your strategy a success. Instead of being pulled to an area as a result of the latest tips and news floating around the media, take the time to do your research and identify the areas you’d like to keep an eye on. This process will also help you to ensure your suburb list and property research reflects your investing strategy.
Property investing isn’t always easy. You need to play the long game, and you can’t let the latest trend pull you off the path towards achieving your long-term wealth goals. Incorporate the approaches above into your research and analysis to ensure your strategy remains strong and consistent.
Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.