Top Five Investment Mistakes to Avoid

Document Sample
Top Five Investment Mistakes to Avoid Powered By Docstoc
					PROPERTY INVESTOR NEWSLETTER                                                             JANUARY – FEBRUARY 2008
This newsletter has been designed to keep you updated on what is happening within the industry and our Real Estate Office



  From the desk of the                                    Top Five Investment
  Asset Manager
                                                          Mistakes to Avoid
                                                          Everybody makes mistakes, even         How much money          can   you
                                                          property investors. This article       actually borrow?”
                                                          focuses on some of the biggest
  Sales Appraisal                                         mistakes property investors make,
  Would you like an update on                             and more importantly, how to
  the value of your investment                            avoid them.
  property?
                                                          Mistake 1: Falling in love with the
  A quick call to our office and                          property – If you inspect a property
  we can arrange for one of our                           and care what the curtains look
  experienced     and     friendly                        like, whether the kitchen has
  salespeople to give you an                              stainless-steel appliances and
  appraisal. No obligations!                              what the colour scheme is, you’re
                                                          probably making this mistake. You
                                                          need to remember that the
                                                          property is for someone else to live   Mistake 3: Not having a risk
                                                          in “the tenant”. The best thing to     mitigation strategy – Many
                                                          do is consult with your local          investors fail to ask themselves
                                                          property manager to find out about     questions     such    as:    What
                                                          what features are desirable for        happens if the property remains
                                                          tenants in a given area, rather than   vacant for an extended period of
                                                          you guessing what you feel would       time?     What happens if the
  Valentine’s Day                                         be desirable for them. If you are      property burns down?         What
                                                          looking for a property in a family     happens if interest rates go up?
  Reminder                                                targeted area, then dishwashers,       What happens if there is a
  Don’t forget the 14th February!
                                                          fenced yards and safety around         change in our circumstances?
  Gift suggestions: A card with a
                                                          the home should be a priority.         What is your back-up plan if
  personal note or poem, pamper
                                                                                                 something goes wrong? A risk
  package, jewellery, perfume,                            Mistake 2: Not seeking expert          mitigation strategy will give you
  balloons, tie, cufflinks, work                          advice – Investors who sign on         peace of mind today and
  shirt, chocolates or flowers.                           the dotted line without consulting     tomorrow.
                                                          their accountants, solicitors or
  Inspirational Tip                                       finance brokers are playing with       You should consider insurance
  It’s not what you are that holds                        fire. What is the impact of that       cover, back-up savings plans,
  you back. It's what you think                           property purchase on your              and fixed or split interest rates.
  you’re not.                                             taxable income?                                           Continue P.T.O.

 IMPORTANT: This is not advice. Clients should not        IN THIS ISSUE
 act solely on the basis of the material contained in
 this newsletter. Items herein are general comments
 only and do not constitute or convey advice per se.      • Top Five Investment Mistakes
 The newsletter is issued as a helpful guide to clients
 and is for their private information. Every effort is      to Avoid
 made to ensure the contents are accurate at the time
 of publication. We take no responsibility for any        • What do Tenants Really Want?
 subsequent action that may arise from the use of this
 newsletter. Published by THE PPM GROUP -                 • Properties Recently Rented
 www.ppmsystem.com
Mistake 4: Not performing due
diligence – “Due diligence” is the      What do Tenants Investment of the
research you should undertake
prior to making the purchase to
                                        Really Want?    Month…
ascertain if the property is a good     Are you meeting their needs?
buy or not. It is often common for
investors talk to the selling agent,
ask a few questions and then
make their decision. You should
take into consideration how far
away schools, shopping centres,
medical facilities and transport are;                                         FERNTREE GULLY
what council’s plans for the area                                             $298,000
are; what capital growth the area                                             Contact: 9800 0700
has seen; and what the vacancy                                                **Wide street frontage
rate is, to name a few. You need                                              **Great 1st home or investment
to do your homework to ensure                                                 **3 bedrooms built in robes to 2
that you really are buying a great                                            **Approx 29m frontage suit boat, truck
property.                                                                     STCA
                                                                              **Kitchen/meals looks to back yard
Mistake 5: Not crunching the            Value for money: How does the         **Gas heating and cooking
numbers – Most investors rely on        rent    compare  with  similar        **Approx 300m to Wattleview Primary
                                        properties?                           School
guesstimates rather than sitting
                                                                              **Approx 500m to Arboretum, bike
down and doing the hard numbers         Security:   Security   screens,       track, tennis, bus
related to their purchases.             deadlocks and window locks rate       **Plenty parking, single garage
                                        highly.
For     example,     an    investor                                           Properties
purchased a negatively geared           Good location: Public transport,
property in a major capital city        natural light, peace and quiet.       Recently Rented
thinking   that   it    would   be      Cool temperature: Reverse-cycle       Keeping you updated on the
(negatively geared) by $100 a           air-conditioning, ceiling fans,       local rental market
week. On proper analysis of the         central heating.
numbers, the investor discovered                                              HOUSES
that the property was costing           Cleanliness: Clean       properties   Sanctuary Close, Rowville-$390pw
closer to $260 a week (out of           attract clean tenants.                UNITS
pocket expenses).                       Equal-sized bedrooms: This is         Newton St, Ferntree Gully-$285pw
                                        common feedback from the              Mint Street Ferntree Gully-$250pw
For those investors who don’t feel      majority of tenants.                  TOWNHOUSES
confident    about    doing     the                                           Boronia Road, Boronia-$310pw
calculations on paper, we strongly      Everything working: Tenants will      COMMERCIAL
recommend that you seek advice          test taps, water pressure, sliding
                                        doors, even the oven.                 Ferntree Gully Road, FTG-$222pw
from a professional accountant.
                                        Low     maintenance:       Timber/
When purchasing an investment           ceramic floors and easy to care for
property take your time, don’t get      lawns and gardens.
emotionally attached to the
property, do your research, have a      Cabling: Wired for Foxtel/Austar,
back-up plan and always seek            extra power points, data cabling
professional advice from your           Car parking: Ability to protect and
building inspector, pest inspector      house their car ■
and accountant or financial
advisors.

                                                                              Staff / local area
                                                                              update
                                                                              Welcome Back to All, we hope you
                                                                              had a great Christmas & New
                                                                              Year.
                                                                                                                  2

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:14
posted:4/21/2010
language:English
pages:2
Description: Top Five Investment Mistakes to Avoid