5 Big Mistakes To Avoid When Reinvesting For First Time Home Buyers
Rentvesting is becoming very popular for an individual to create enough fortune for their retirement. This trend is picking up in Australia, where most millennials have been rentvesting to save money for their plans.
Rentvesting is a concept driven by affordability and lifestyle where individuals live in a rented flat in the city centre near their workplace but invest heavily in suburbs properties.
It is an easy source of money only if you have financial backup and are mentally prepared for any challenge. Many want to start investing without planning and preparations and end up with enormous debts on their heads.
This blog will help you understand the mistakes to avoid, especially if you are a first-time homebuyer.
1. Not Doing Enough Research Before Investing
Research is a major problem for all first-time home buyers when you’re investing in rental properties. The research will help you devise a better investment strategy plan, and failure of this can cause you loss.
Research should be done thoroughly on the property, including all aspects such as previous ownership, builder details, neighbour details, commercial sites, and many more.
You should also be aware of the permit issue and inspect the house thoroughly before investing.
2. Not An Optimal Location
The performance of the property depends heavily on the location of the property. You may buy a home to rent out in a particular suburb, but the local market does not require such a service.
This means that choosing the right suburb according to your needs is very important. Thus, to maximize your rental yield, you must see the location for yourself and understand the local market trends.
Also, you should monitor the migrating population from where you can get more benefits. Hence, buying your first rental property requires you to dedicate a lot of time to researching the right location for you.
3. Property Is Hard To Rent Out
Buying a home to rent out can yield from 3.3% to 5.8% in the major cities of Australia. However, finding a proper tenant is quite a task for all first time home buyers.
When you have invested heavily, you will be looking at the returns, and as a result, you will be desperate to rent out. A few problems that are faced include:
- Tenants not paying rent on time
- The house has been unoccupied for a long time
- Maintenance issues are there all time
Thus, before renting out to a tenant, you should do a background check so that you receive your rent on time.
4. Absence Of A Proper Investment Strategy
An investment strategy can help you make a fast decision to neutralize any problem you are facing. The investment strategy can be made by you or you can hire a consultant as well if you lack the expertise.
The strategy should be made in such a way that it should give the maximum return on investment. At Quarter Acre, we will analyze your financial goals and future needs and devise a strategy accordingly.
The investment strategy would largely depend upon your budget and financial backup. Therefore every individual has a different investment strategy from each other.
5. Not Consulting Property Experts
A property expert consultancy is always fruitful for your investment strategy, as they have the inside knowledge of real estate. Like what yield a property can generate, what is the vacancy rate, and many more?
They will be with you at every step, guiding you in doing the right thing. A property expert will come in handy when you are a first time home buyer and facing any problem.
You can use their expertise in solving the problem fast. The property experts will also help you understand the property investment opportunities in the current market. You can check one of our success stories to understand how consulting with property experts help.
Conclusion
Rental investing is very rewarding, but at the same time, it is known to carry certain risks as well. But QuarterAcre is helping you with all the assistance and expertise, especially if you are a first time home buyer.
