10 Tips From 10 Years of Property Investing

10 Tips From 10 Years of Property Investing 

Reflecting on over a decade of property investing, I’m compelled to share the invaluable lessons I’ve gathered along the way. I purchased my first property in June 2013, over ten years ago, on the NSW Central Coast. A few years later, I purchased my second property, again on the Central Coast, less than 10km from the first. From then on, I continued to invest, finally gaining the confidence to venture outside my own backyard to other areas around the country. My portfolio now spans across New South Wales, Queensland, and South Australia, encompassing both residential and commercial properties. Through highs and lows, successes and challenges, these insights have become the guiding principles shaping my approach to property investment

1. Approach Property Investing as a Business:

Treating property investment as a business sets the foundation for success. Regular communication with property managers ensures proactive maintenance, while annual financial reviews guarantee optimal financial structures and competitive rates. Valuing your time is paramount; when considering renovations, weigh the benefits of DIY against professional assistance.

2. Recognise the Value of Reliable Tenants:

A symbiotic relationship with tenants fosters property longevity and profitability. Investing in tenants committed to long-term residency cultivates a sense of ownership, translating into proactive property upkeep. While rental adjustments reflect market trends, prioritising tenant satisfaction over immediate gains yields sustainable returns.

3. Target Properties Appealing to Owner-Occupiers:

Owner-occupiers dominate the real estate market, making properties tailored to their preferences more lucrative. Opt for suburbs with strong owner-occupier presence, emphasising factors like school zones, neighbourhood aesthetics and lifestyle amenities. Aligning with tenant and buyer demands ensures enduring market value.

4. Balance Yield and Growth Prospects:

Resist fixating solely on high yields without considering growth drivers. Prioritise properties with potential for capital appreciation and rental growth, ensuring sustained profitability beyond immediate returns. A balanced approach guards against short-term gains at the expense of long-term wealth accumulation. You can read more about what yield is here.

5. Acknowledge Diverse Property Markets:

Australia’s property landscape is multifaceted, characterised by regional variations and localised trends. Differentiate between mainstream media portrayals and on-ground realities, relying on firsthand insights to inform investment decisions. Informed market analysis enables strategic positioning amidst evolving market dynamics.

6. Embrace Individual Investment Trajectories:

Avoid succumbing to comparison, recognising the uniqueness of each investor’s journey. Define personal goals, formulate tailored strategies and remain steadfast amidst external noise. Cultivate resilience by focusing on individual progress.

7. Exercise Caution with Niche Properties:

Beware of niche properties promising high returns but lacking resale potential. Student accommodations and holiday units often pose risks due to limited demand and market volatility. Partner with mortgage brokers to assess lending feasibility, providing a benchmark for evaluating long-term investment viability. While it’s not impossible to profit from these types of investments, I am aware of instances where investors have suffered losses due to investing in properties with restricted resale potential, which links back to point two above.

8. Distinguish Price from Intrinsic Value:

Resist the allure of cheap properties, prioritising intrinsic value over superficial affordability. Analyse properties in terms of their underlying assets, focusing on long-term growth potential. Prioritise investments aligning with broader economic trends and demand dynamics.

9. Build Your Support Network:

Property investing thrives on collaborative efforts, necessitating a comprehensive support network. Engage with mortgage brokers, solicitors, property managers and other industry professionals to navigate complex investment landscapes. Cultivate relationships with local agents, enriching market insights and access to prime investment opportunities.

10. Choose your advice sources wisely:

Exercise caution when seeking advice in the realm of property investment. Property holds a significant place in Australia’s cultural fabric, often leading many to consider themselves experts. Casual conversations at social gatherings can inundate you with a plethora of opinions on what, where and how to buy. Well-intentioned advice from friends and acquaintances should be balanced with thorough research and due diligence. Professional advisors such as buyers agents offer invaluable assistance in navigating the complexities of property acquisition. However, should you choose to embark on the DIY path, commit to becoming well-versed in property investment principles and diversify your sources of information. Relying solely on a single source of advice may lead to skewed perspectives and uninformed decisions. ‘

Bonus Tip: Have A Plan:

Having a plan is essential in property investment. A well-defined plan provides clarity amid uncertainties, guiding each property acquisition strategically towards your goals. Avoid buying for the sake of it; every purchase should align with your overarching plan. For expert guidance in crafting a property plan, seek assistance from experienced and licensed professionals, like our team.

In conclusion, the past decade of property investing has taught me invaluable lessons that have shaped my approach to building a successful portfolio. From treating property investing as a business to seeking wise advice, these insights have guided me through the highs and lows of the market. As I continue on this journey, I remain committed to refining my strategies, staying informed and adapting to the ever-changing landscape of property investing. I hope that by sharing these insights, I can empower fellow investors to make informed decisions, navigate challenges, and achieve their own long-term wealth creation goals.

Thinking about your own investment property? It may be closer than you think. Reach out to our team today and let the journey to financial freedom begin.

Matt Sharp is the Founder and Director of Sharp Property Buyers. With Matt at the helm, Sharp Property Buyers continues to set new standards of excellence in the Central Coast real estate landscape, driven by a passion for innovation and client satisfaction.

Disclaimer:

This blog post is for informational purposes only and should not be relied upon as a substitute for professional advice. Always conduct thorough research and seek expert counsel to ensure informed decision-making.