Pitfall 8: Failing to plan for the worst-case scenario
Yes, this should be an exciting step, but you do need to be prepared for the worst, just in case. It makes good business sense to think about what kind of backup you're going to need. And that doesn't mean just insuring your property investment.
"You can't just think, 'she'll be right,'" John says. "you need to cover all your bases. That means looking at personal protection for loss of income or death too, as well as ensuring you have a good financial buffer in the bank."
Pitfall 9: Assuming apartments are a wiser investment
It's a misconception that units are the best option for budding property investors. They might seem like a good idea because they can be a bit more affordable and perhaps more central, but John says purchasing land and building a new home to rent on it makes more sense in the long run.
"There's more worth locked up in land," he says. "You can't duplicate it. Once it's gone, it's gone. There's minimal growth potential in apartments. And if you invest in one in a big complex with 600 units across three buildings, when you go to sell it, there's inevitably going to be someone else selling the same thing."
Pitfall 10: Overlooking the benefits of building new
When you buy a home and land package with a company like Metricon, you're purchasing into decades of experience and a Lifetime Structural Guarantee*. If you invest in an existing property that's been around for a while, there can be nasty surprises hidden behind the walls. But that's not the only pitfall you should be aware of.
"Property investment is a business, and one of the benefits of running a business is the deductions that entitles you to at tax time," John says. "You'll lose a lot of the depreciation benefits if you buy old."
Speak to your accountant about tax benefits that apply to your personal situation. We’ve also compiled a guide to depreciation and how it may be able to help you.
Make sure you seek financial advice
While we've tried to be as helpful as possible, this article should not be considered professional financial advice. It contains general information only, and you should seek out independent, professional advice on your personal situation before making any financial decisions.
If your financial adviser thinks an investment property is a good idea, based on your current financial situation, then talk to one of Invest by Metricon's friendly experts today.
If you feel ready to start your property investment journey, learn more about Invest by Metricon today. Invest by Metricon offers an end-to-end process that allows you to obtain a rent-ready, premium home in one of Australia’s leading estates, simplifying your investment journey. With new build investment opportunities across Victoria and Queensland, you're sure to find something that suits your investment strategy, no matter where you live.