How to be a property investor

Improving market conditions, historically low interest rates and poor returns on cash have started to generate would-be property investors.

Many are old hat at the game. They can sniff out a deal and run the numbers to know when something will stack up.

But the current economic conditions are such that a newer, more inexperienced, property investor is beginning to emerge, trying to emulate the success of their family or friends, or looking for somewhere to put their cash.

Luxe Commercial managing director Chris Sales said a successful investor did more than simply buy a property based on low interest rates and loan approval.

Time, research and understanding what level of risk an investor could handle were key to buying successfully.

“You need to ask yourself how long you want to hold a property, what you plan to do with it and if it’s going to be a short-, medium- or long-term proposition for you,” he said.

“Investors should always run the numbers. Focus on an area, know what you’re looking for and go in with a definitive plan.”

Establishing an understanding of what level of risk you’re prepared to take on is also essential for a successful investment. 

Mr Sales recommends looking at all areas of your life to determine whether you love, and can afford, to take a big risk and take responsibility for whatever might occur. 

Many people however will be conservative and prefer to act with caution. This will determine what kind of property you can and should be buying.”

“In this case patience is a virtue. You can not go into something emotionally with all guns blazing. Results often don’t happen immediately and as soon as an investor understands this the better.”

Mr Sales recommends obtaining as much expert advice as possible. Seeking assistance from trusted and experienced sources was key to knowing where to look, how much to spend and whether you’re being a champ or a chump.

“Just because you work in an office, or have worked from a shop or shed doesn’t mean you’re suddenly an expert in the commercial property industry,” he said.

“Getting advice will help reassure you and assist you in forming a reliable strategy that meets all your needs. Changing your mind, getting cold feet or making rash decisions can seriously impeded any chance of success.”

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