Most first-time property investor mistakes are not dramatic. Nobody loses everything in a week. They are quiet decisions that cost a little every year for twenty years. These are the ones that cost people most, and each can be avoided.
Buying the home you would want to live in
An investment property has to suit its tenants, not you. The kitchen you love may add nothing to the rent. The street you would never live in may let in a week.
Looking at the price, not the weekly cost
Two properties at the same price can cost their owners very different amounts each week. Rent, rates, insurance, management and the loan decide what you carry. That figure tells you more than the price.
Putting it in the wrong name
Ownership is set on the day you sign, and it follows the property to the day you sell. Changing it later is costly.
Leaving no buffer
A vacancy, a hot water system and a rate rise can arrive in the same quarter. Investors who sell in a hurry rarely chose a bad property. They ran out of room.
Buying the building, not the land
Real estate is the land. The building depreciates; it’s the land that grows. A unit in a large block with little land behind it behaves very differently from a house on its own lot.
Waiting for the perfect time
There is never a perfect time. Life always offers a reason why now is not a good one, and the decision stays yours.
Going it alone on the contract
Sunset dates, provisional sums, finance clauses. Each one is plain once explained and costly once missed. Our concierge turns contract language into plain words; legal advice comes from a solicitor.
Stopping at one
The first property is the hardest. The equity it builds is often what makes the second possible. Few could buy five properties at once. Owning several over time takes a plan, one property at a time.
Two investors bought similar homes in the same year. In year two, both had a six-week vacancy and a rate rise. Priya had $15,000 set aside and barely noticed. Tom had nothing spare, put the shortfall on a credit card, and sold eighteen months later, losing the costs of buying and selling.
Most of these mistakes are easier to avoid with someone beside you who has seen them made. If you want that before you commit, book a first conversation. It costs nothing.
Nicholas Lockhart