Investing in property looks easy. It looks like all you have to do is save enough for a second property, you buy one you like and, hey presto, you’re rich!

Sadly, that’s not how it goes in reality. Property investment requires knowledge, discipline and practical thinking. It’s actually hard work – and we haven’t even got to the management part yet!

There are endless pitfalls when buying an investment property but, the good news is, this isn’t a reason to avoid property investment. All you have to do is learn what makes a great investment property and avoid properties that don’t tick the right boxes.

So, the property buying experts at Patrick Leo are here to outline the most common pitfalls in property investment:

Falling in love

You fell in love with your family home where you now live, so what’s wrong with falling in love with an investment property? Well, love is something we feel in our hearts; investing is something we do with our heads. We don’t mean to say that you can’t love a property, but the point is that we don’t base investment property choice on personal taste.

Remember: we’re not buying what appeals to us – we’re buying whatever will give us great returns (high yield), is in our budget (affordable) and is highly in-demand by renters (low vacancy).

Buying in a mining town

Mining towns – how could you go wrong? A mining company discovers resources in the middle of nowhere, they quickly need 5000 more workers there, houses get built and they have the potential to double or even triple in price over a period of two or three years. Sounds great, right?

Well, sadly, it isn’t. There’s a very simple reason why good investors won’t touch mining towns with a 100km pole: the resources on which they’re built eventually dry up. Sure, a house in a mining town can go from $300,000 to $400,000 in 6 months’ time – but when the mine closes (even if the mine has 20 years of life, they often don’t last half that long), that property will be worthless.

Diving and dithering

Dive into something headfirst, and you can be sure you’ve rushed the decision. Dither around, and you haven’t made an inch of progress. Property investing requires a combination of discipline and taking action when the time is right.

Flipping

You’ve seen the TV show on flipping property, and you’re ready to make some quick cash. Except that most flipping attempts end up with the buyer losing money. It’s not impossible to make money on flipping, but these days it only really makes sense if you’re a builder and can do the renovations on your own. It’s a short-term, high-risk game.

The list of pitfalls in property investment goes on. But don’t let this discourage you – the team at Patrick Leo are experts in buying investment properties, helping you acquire quality property which improves your financial position. We see people make mistakes in real estate every day; we want to help you avoid them. Consult our team of top-ranking property investment specialists and learn more today.