Buying an investment property in Wellington is a great way of generating regular income and accumulating wealth. However, it is easy for beginners in the real estate investment market to make costly mistakes. So you don’t fall into that category – take note of the following 5 common mistakes to avoid when buying an investment property in Wellington, New Zealand.
1. Adopting a short-sighted view
Wellington rental property management experts see this problem all too often. Many beginners rush into the real estate market wanting to make a quick buck overnight. There is a lot of money to be made by investing in Wellington rental property. However, it takes patience and persistence to build wealth through a robust real estate investment portfolio.
The best rental managers in Wellington place an emphasis on buying property that grows in value and appreciates with time. It is best to purchase below market value and plan for capital gains over time, rather than seeking an overnight killing.
2. Failing to seek expert financial advice
Financing a real estate investment is a complex matter which requires professional advice. There are many things to take into account including property taxes and mortgage rates. You can save a lot of time and money by letting experts set up the finance for you. The majority of property managers in Wellington advise their investors to seek financial advice to avoid setting up the wrong financial structure that may obliterate any gains or even leave you in debt.
3. Buying the wrong property
Many beginners buy the wrong property, especially when they neglect to do their due diligence. This can be avoided by being very thorough during the entire process. Firstly, have the home inspected to ensure there are no defects or pest infestations. Secondly, buy in the right location and target the right demographic. For example, buying a one bedroom home in an area that attracts families is a mistake. Understand the market and target your tenants accordingly, so you enjoy maximum returns from your Wellington rental property investment.
4. Forgetting to do your homework
It takes a lot of research to understand market trends and investment choices. Before buying any property, check out the neighbourhood, available amenities, crime rates, foreclosure rates and average rents. Would-be renters are interested in these factors when deciding where to live. Doing the same will guide you in choosing the ideal Wellington rental property that will have a high occupancy rate and consistent rental income.
5. Making an emotional buying decision
Buying an investment property is very different from buying a home you plan to spend your life in. The rental property must be selected from your tenants’ perspective. Many beginners buy property they fall in love with, instead of analysing its investment potential and its ability to generate rental income. Keep a level head and avoid making emotional decisions that will weaken your investment portfolio.
If you are a beginner in the property investment market, speak to an experienced Wellington property management firm. Manage My Rental NZ is well-respected for having expert rental managers in Wellington, who can help maximize your investment returns and minimise your tenancy risks.
Let the skilled Wellington property management experts save you time and money. Visit www.managemyrental.co.nz to begin or add to your investment property portfolio.