The biggest mistakes made by property investors

But with dedication to a goal and a long-term view in mind, the pair believe that “amazing things are possible”.

And while there are a number of things prospective property investors must consider before picking up the keys to their first property, there is also a long list of things to avoid that could make a difference between success and failure.

The golden list of what not to do as a property investor includes: 

• Listening to media hype
• Buying a property close to home (so they can drive past)
• Self-managing tenants
• Buying at auction
• Buying older properties (without potential to add real value)
• Buying based on the look or feel of a place
• Asking a real estate agent for advice
• Overcapitalising
• Selling for profit (when they should refinance and save the tax)
• Paying off debt (when they should create a redraw facility or use an offset account)
• Selling property to transfer into self-managed super funds (to purchase property)
• Not including a finance clause in the contract
• Cancelling a contract under the ‘cooling off’ option rather than the finance clause
• Failing to get an expert to review the contract
• Buying in regional or rural areas
• Not having a strategy for mitigating risk
• Waiting for the deal of a lifetime
• Buying for ‘future development upside’ on the open market
• Chasing the lowest interest rate option
• Not having the correct ownership or financial structures in place
• Not allowing for all purchase costs (stamp duty, mortgage registration, lender’s mortgage insurance)
• Taking an approved finance limit as an unconditional commitment from the bank
• Selling property to finance lifestyle

And while the pair believe that education and research are keys to smart investing, they warn of analysis paralysis.

“If you spend all your time trying to find the deal of a lifetime, you may pass up good investment opportunities along the way and end up missing out in the long term. Do your research and then take the plunge.

“Enjoy the rush that comes from taking action.”