The wonderful thing about property investing is that it opens your world up to different ways to potentially build your wealth.
However, Australian Taxation Office figures released last June showed that a quarter of Australia’s property investments are held by 1% of taxpayers. The majority of those investors are over the age of 50.
If you don’t fit into this category, all hope isn’t lost! You can still approach property investment strategically now by following these 5 common rules successful property investors abide by.
1. They plan strategically
Successful property investors have a clear understanding of their investment strategy and long-term goals.
They know how much risk they are prepared to take on and this helps them to decide on the type of property investment that’s right for them.
They understand their borrowing capacity, stick to their budget and plan for contingencies (like major repairs) to avoid overstretching financially.
2. They understand volatility
As a property investor, it’s important not to panic at the first sign of a downturn or change in the market.
Experienced property investors understand that often the best gains are made over the long-term. Sometimes it pays to ride out the storm and prioritise sustainable growth over quick gains.
Knowledgeable investors also diversify. That might mean buying in different states or territories in order to mix things up and mitigate risk.
In 2023, we saw why diversification was so important, with the rate of home value growth varying greatly across the capital cities. Values rose at more than 1% each month on average across Perth, Adelaide and Brisbane after May, while in Melbourne and Sydney the pace of growth slowed sharply after the June cash rate hike.
3. They don’t procrastinate
If you wait and wait until the perfect time to invest, you may end up missing the boat.
Savvy property investors do their research and set their cards up, so that when an opportunity arises, they are ready to act. Having your finance pre-approved and ready to go is a great place to start.
4. They keep emotions out of their decisions
Property investment is about buying with your head, not your heart. Successful property investment requires a strategic approach, focusing on data and long-term returns rather than personal preferences. Remember, it’s your tenants who will make a home of the property, not you.
Investors who thrive in the property market are those who approach their investments with the acumen of a businessperson, focusing on the numbers and potential for growth.
This approach includes staying informed yet discerning, filtering through the noise of speculative media narratives to focus on solid, evidence-based decision-making.
5. They rely on specialists
Successful property investors know there’s only so far self-education can take them. You can listen to property investment podcasts and learn as much as you can from property investment books, but you’ll still need the right specialists to guide you through your property investment journey.
Mortgage brokers, real estate agents, financial planners, accountants, conveyancers, buyers’ agents, property managers – all of these professionals may help you make better, considered informed decisions.
Looking to invest in 2024?
Whether you’re new to property investing or want to grow your existing portfolio, we’re here to support you.
Talk to us about getting pre-approved on your finance so that you’re ready to start 2024 on a high – with an investment property purchase. Get in touch today.
