Last month we introduced the concept of Duplex properties as a means for investors to improve their income position for finance. Following along with our DIY theme for this month, let’s explore the subject a little further using this new aspect.
Let’s start by saying that it’s perfectly understandable that investors want to get the best results they can, in fact we believe it’s their responsibility to do that. What we want to be clear about is the difference between a DIY strategy and one that is supported by a Professional Property Advisor. By that we mean professional, as in someone who is paid to help.
Clearly, there are thousands of properties for sale around the country at any one time and logically there must be at least one that suits each investor’s situation. Well, what are investors looking for when they begin searching for properties by themselves? We have all heard of the phrase, location, location, location and there is no doubt that suitably located properties perform well. How do you find the methodology needed to target a suitable location that fits your budget? More importantly, where would you start?
Obviously, you could start with price. That measurement would definitely ensure that each property is one that you know you can buy, as long as you know your price range to start with. Of course, using such a wide search parameter means you would be comparing properties from all over the country and you would need to have some knowledge of the areas you want to buy in to make a decision. You can see then, that this would mean a lot of research.
To make it easier you could subscribe to some of the property websites available that promote their ability to predict property values around the country. Some even have a selection of charts of suburbs that are doing well based on specific criteria. The downside of these sorts of lists is that, in the past, a lot of mining towns were highlighted as places to buy based on statistics. From our point of view, despite what the growth rates were indicating, we never advocated these areas to our clients.
Surprisingly, personal bias can also play a part in selecting property using a DIY strategy. Sometimes it can be difficult separating performance from prejudice when it comes to property or even location. For instance, when we first proposed Point Cook as an investment opportunity there was a lot of scepticism around the location however this suburb has since proven to be very successful despite the initial negativity.
Do you search endlessly for what you want? Selecting a property can be confusing so some inexperienced investors start out buying their first investment property close to where they live. The reasoning is usually so they can always drive past it to make sure everything is all right. Plus, they feel they know the area well because they live there and a tenant should like it too. DIY strategies usually contain anomalies like that.
Fixed fundamentals for investing are often not adhered to stringently with DIY strategies, which can undermine the potential of their portfolio. Research can be a time consuming and frustrating activity.
Knowing where to start and what factors should be considered are usually learnt by experience. Of course you can gain experience by making mistakes but property purchases are expensive and a mistake can cost a considerable amount of money.
So how can an investor avoid mistakes?
Well, unsurprisingly the answer is quite simple. Discussing a DIY strategy with a Property Advisor can provide some certainty. Combining the best elements from your DIY plan and tweaking it with advice from a professional can be the solution you are searching for.
Using a professional Property Adviser can cut down the time it takes to sort through the available options because rather than trying to find a specific property, an Advisor can ask pertinent questions to determine what you are actually trying to achieve. This type of information is far more important than a mere postcode because it will match your goals with your budget. The Advisor can then focus in on where to buy, from an investment perspective, to achieve these goals.
Coupling the Property Advisor skill set with a Finance expert and a Financial Planner all in the one meeting creates enormous efficiency. We have found this reduces a lot of leg work and aligns the purpose of these areas of advice.
So, why not take some time this weekend to sit down and really get clear on what you want from a property. Make a list of the points you think are important in a property investment and also the things you want to steer away from. Believe it or not, knowing what you don’t want is just as enlightening as knowing what you do want. Actions like these help to clarify what you want and you’ll find the information extremely valuable when it comes to talking to an adviser.
A DIY strategy can work though we feel that using a professional property advisory service to give it some “weight” makes more sense in the long term.
To discuss your strategy, make an appointment with one of our experienced Property Advisors today.