When entering into a market that's in a constant state of flux, it can be difficult to know which approach to take. The property market in Sydney and the Central Coast can see you win big or lose hard, and it all comes down to understanding and planning. Luckily, we've put together a decisive list of do's and don'ts of a successful property investor so you can focus on the finer details of property investment.
Do's:
Build vs buy?
This can be a sticking point when deciding to invest in a property. There are perks to building, such as building a property to fit the market requirements. You can create a single or dual-occupancy property and customise your investment property to be cost-effective and desirable. While buying an established property may save you in short-term costs, you will then be restricted by the existing building's constraints and can only extend as far as land size will allow. In the long-run, building can maximise your returns.
Remember to be flexible
There are many emotions at play when making decisions about your dream property. Remember that it's a number's game and sometimes your vision doesn't quite end up being the most viable option. Knowing when to be flexible with your plans will help make your investment a success on the market. If you need to walk away from what seems like your dream property, it's best to do so. You will find one that works for your budget, your vision and the market.
Get the right investment property loan
A key element of a successful property investment is ensuring you secure the lowest interest rate for your investment property loan. Not only is the interest rate important, but also the loan structure to ensure you aren’t hit with fees and charges or a facility that doesn’t allow you to increase the repayment amount when the rent increases. Working with an experienced Sydney and Central Coast mortgage broker like Mint Equity will ensure you get the structure right from the beginning. Talk to the team at Mint Equity on 02 4340 4847 before you start your property investment journey.
Short term vs long term
The property market in Sydney and the Central Coast is ever-changing and has made short-term investment a tricky game. To ensure you will reach the investment goals you've set, keep them realistic and keep your eye on changes in the market over the long term. This is where you're likely to get those worthwhile returns.
Don'ts:
Don’t have eyes too big for your wallet
While you may have big ideas for your investment property, its important to keep yourself in check. Be realistic about your budget, even when you're thinking that you're over-extending yourself to make the most of returns later on, those returns may take more time than you have bargained for. The growth in the Sydney and Central Coast market isn't at a point where you can rely on such large returns to validate the big spending at the beginning.
Don't base the numbers on rent guarantees
It can be tempting to include an idea of how much rent your property will bring you into your budgeting when buying/building/renovating your property. Instead of keeping those numbers so tight, take into account that rent value promises don't always work to your advantage. Rent value surprises may pop up, so keep this in mind when you are budgeting. Try to get an independent rental assessment for agencies that don't also sell properties, as they will understand your expectations and will be able to work to get you the best outcome.
Don’t panic
While you might see short-term changes in the property market that alarm you, the long-term game continues to show positive growth. When you follow these tips, keep a level head and avoid over-extending when purchasing your investment property, you'll be in a position to wait it out and reap the rewards in the long run.