Real estate is a lucrative investment opportunity, but it is not always an easy way to make money. There is a lot of thought, research, time, and effort involved in ensuring you get the highest return on investment possible. Therefore, you want to make an effort to avoid some of the common mistakes that can derail or hurt your earning opportunities.
Regularly Assess Your Property’s True Value
Many real estate investors only concentrate on their property’s net worth and cash flow, which only tells a small percentage of the overall story. You may be missing out on ways to capitalise on the property, or signs that you need to liquidate soon. You should be looking at all the different facets of the potential profit points, including appreciation, equity, taxes, maintenance costs, and more. By paying close attention to your balance sheet, you will have the full picture of how your property is performing, and its true value.
When reviewing your balance sheets, look to see if your property is losing money. If so, you may only need to make small renovations to improve the investment value, but sometime you will need to make the hard decision to sell before you lose more money. By regularly assessing your property, you will avoid unpleasant surprises that could lead to a loss of profits.
You can request an obligation free appraisal here.
Treat Your Property Investment as a Business
Many people get into the real estate business as a way to earn extra income on top of their regular job. This can lead to many mistakes that come from not spending the time or effort on the property to get the maximum return on investment.
To get the most out of your property, you need to have good tenants, reduce your vacancy gap, and keep the property well maintained. These actions take a lot of dedicated time, so you have to schedule the time to dedicate to running the business. If you do not want the hassle, then you should hire a property manager in Perth. Although this service costs you money, it will help you to have a higher return on investment in the long run because you will have experts to handle all the day-to-day running of the property.
Do Your Research
Finding the right real estate investment deals takes time and effort to ensure that you are getting a solid property with high rental rewards and good prospects for capital growth. Too often, novice investors will purchase real estate without doing the due diligence, including assessing the neighbourhood for long-term value. Just because an area is deemed up-and-coming or hot or simply because you like a property does not mean that it will be a solid investment. There are many different factors and considerations involved, including the average cost of rent, council rates, schools, crime, average vacancy rate, and more, that will impact your holding costs and its growth potential.
Rather than trying to complete all this research yourself, make sure you leverage our expertise and get our advice when considering your next property purchase.