Embarking on the journey of property investment opens up diverse avenues to potentially build wealth. However, recent figures from the Australian Taxation Office reveal that a quarter of the nation's property investments are held by just 1% of taxpayers, predominantly aged over 50.
If you find yourself outside this fortunate group, there's no need to despair! You can still strategically approach property investment by adhering to these five common rules followed by successful property investors.
1. Plan Strategically
Successful property investors possess a clear understanding of their investment strategy and long-term goals.
They assess their risk tolerance, aiding in deciding the type of property investment that aligns with their objectives.
Understanding borrowing capacity, adhering to budgets, and planning for contingencies are crucial steps to avoid financial strain.
2. Understand Volatility
Panic at the first sign of a downturn or market change is not the trait of experienced property investors.
These investors comprehend that the best gains often come over the long term, requiring resilience during market fluctuations.
Diversification is key, involving buying in different states or territories to mitigate risk, as seen in the varying home value growth rates across capital cities in 2023.
3. Avoid Procrastination
Waiting for the perfect investment moment may lead to missed opportunities.
Savvy property investors conduct thorough research, positioning themselves to act promptly when opportunities arise.
Having pre-approved finances ensures readiness to seize opportunities when they present themselves.
4. Keep Emotions Out
Successful property investment is a rational decision-making process, focusing on data and long-term returns rather than personal preferences.
It's crucial to buy with your head, not your heart, understanding that tenants will make a home of the property, not the investor.
Thriving property investors approach investments with a business mindset, making decisions based on solid, evidence-based information.
5. Rely on Specialists
Acknowledging the limits of self-education, successful property investors understand the value of specialists.
Mortgage brokers, real estate agents, financial planners, accountants, conveyancers, buyers' agents, and property managers provide essential guidance.
Aspiring to invest in 2024? Whether a novice or looking to expand your portfolio, we're here to support you.
Talk to us about pre-approved financing to kickstart your successful property investment journey in 2024. Contact us today.
References:
Yardney, Michael – 5 golden rules for property investment success, 28 September 2021.