We see a lot of people trying to do weird things when investing in property. Don’t follow their bad habits.
1. Borrowing from only one bank
Having all properties with one bank is easy, but not that smart. Banks control the sales process, so if they have all of your properties it gives them absolute control around any sales proceeds.
2. Relying too much on rental income
Over time you may need to diversify your income. A good way to offset your property investment income is to build a strong cash flow business.
3. Holding poor performing properties too long
Tougher lending criteria means you need to be more disciplined about selling the properties that aren’t making you enough money.
4. Choosing poor quality advisers
Always make sure your advisers, like your broker, valuer and lawyer are independent – you don’t want information from people who have a vested interested in supporting the seller, the real estate agent or the bank.
5. Not building relationships
If you’re going to trade properties you need to be up front about it with your broker and with the bank. As you do more deals, and more complex ones, these relationships will become critical.
6. Having no plan
Before you start, make sure you have a really clear investment plan. It will help you buy the right house straight away. So many people go with their gut, then work out a plan later.
7. Not doing your homework
Make sure you look at the demographic market closely – you know what they say about assumptions.
8. Paying too much
The more properties you look at the easier it will be to spot the really good deals. Don’t jump on the first deal you see – chances are it won’t be the best one.