Real estate is one of the steadiest and most reliable investment vehicles. Whereas there’ll be market corrections every once in a while and the occasional property crash, real estate is mostly a pretty good asset to invest in.
Nevertheless, there are risks and pitfalls of property investment that you should avoid when purchasing real estate in Port Macquarie (to see properties for sale in Port Macquarie, see sovereignhills.com.au/buy-in-port-macquarie/). The following tips will help you make the right property investment decisions and drastically lower the likelihood of buyer’s regret.
1. Have a Plan
The absence of a plan is the surest recipe for failure. Many real estate investors see buying property as little more than sinking cash in an asset that’s virtually guaranteed to appreciate in value. The logic goes that all you need to do is buy any real estate, and you’ll be well on your way to making money.
Unfortunately, many who have followed this path have eventually found themselves stuck with stagnant assets that have no meaningful income and are difficult to dispose of. To avoid becoming another sad statistic, have a rigorous plan. The plan should be underpinned by elaborate market research that includes understanding the opportunities in different parts of Port Macquarie and property prices.
2. Don’t Be a Lemming
If you regularly watch business and investment news, it often feels like one moment analysts are saying the real estate market is booming and a few days later, that the market is on the verge of a meltdown. So where does the truth lie? Contrary to the views of property pundits, there are no shortcuts – it’s up to you to do the legwork in finding out the when, where, and how of real estate investment.
If you base your decisions on popular opinion or prevailing sentiment, you’ll find your investment underwater faster than you know it. In any case, if everyone is rushing to put money in a specific real estate segment, that’s the perfect ingredient of a market bubble. Do your research, form an informed opinion and make the right decision.
3. Explore Alternate Strategies
Still on not following the crowd, you don’t have to grow your real estate portfolio in the same way everyone else is doing. For example, do you have to live in the same property you buy? Sometimes, where you want to live and where you can afford to live isn’t one and the same. Investing where you can afford can accelerate the realization of your investment goals.
Rent money isn’t always dead money. For example, if you live in a place you like and where your rental expenditure is much lower than what you would pay as a mortgage for the same property, you can then apply the ‘savings’ difference to property in an area with a smaller gap between rent and mortgage payments.
4. Actively Keep Track of Your Numbers
One of the reasons real estate is such a desirable investment is because it’s perceived as a relatively easy to manage source of passive income. But make no mistake, the income and asset value of your property will not grow magically. It takes a lot of work to ensure you are getting the optimal return on your investment.
You have to keep a close eye on your numbers at all times so you have an accurate picture of the position of your portfolio. That includes accurately capturing all costs of running the property. When you have a clear picture of your investment, you’ll know if and when to dispose of it.
5. Play the Long Game
Get rich schemes are never a good investment idea but that’s especially so when it comes to real estate. Never buy a property with the expectation of selling it a couple of months later. The Internet is replete with stories of people who made a fortune from buying dilapidated houses then refurbishing and selling them at a healthy profit less than a year later.
Whereas these stories may be true, they are the exception and not the rule. Whenever you contemplate buying real estate, think of its investment potential over a 10 or 20-year time frame.
Property is often the biggest investment most people will make in their lifetime. By following these tips, you can make sure your Port Macquarie investment will be worth it in the long run.