Buying with your heart
The majority of self-managed investors buy in the area that they live in because they like where they live or they feel safer buying next door. This does not mean that the area is a good place to invest.
Check the vacancy rate for the area. Look at the forecast figures for population and infrastructure growth for the region. What is the local or regional economy doing and what is forecasted for its future?
Buy with your heart every time you are buying your place of residence, but buy with your head when you buy to invest.
Having no plan
A strategic plan gives you guidelines and sets goals. It tells you what is achievable and in what time.
A good strategic plan will tell you how to pay off your mortgage faster and in how many years, it will also let you know when you can purchase another property to increase your portfolio and passive income.
A strategic plan sets out what you need to do to achieve more financial freedom and should be your financial path for the duration of your working life.
Not keeping your vision on the long-term
Surround yourself with like-minded people who are investing in their future. Distractions and quick money investments can lead to bad short-term decisions. The most successful decisions have a long-term vision which steers you clear from panic buying or selling.
There are ups and downs to every market, having a long-term vision cuts out all the negative chatter around you.
Managing the property yourself
Property management is a specialised business and good property managers can save you a lot of stress.
They will advertise for tenants, interview them asking the right questions, do the proper background and financial checks, keep on top of rent payments, adjust the rent every 6 or 12 months, carry out quarterly inspections and provide a report, maintain the property, organise smoke alarm inspections, even pay your rates for you from the rent.
Our property managers will also take over the handover process at the end of your build and organise everything from the final defects inspection to picking up the keys.
Thinking you can buy and forget
Setting up a successful portfolio takes time and constant vigilance, but many people become comfortable and think they can ignore their properties.
Your property managers will look after your property and ensure you have the right tenants, but you still need to keep on eye on your bank.
Check your mortgage rates, talk to your property consultant about keeping on path with your strategic plan and he will talk with your finance broker, between them, they can save you potentially hundreds of thousands of dollars on mortgage payments.