Property investing has definitely got its upsides and its downsides. Talk to any property investor and they will say that there is as much opportunity as there are pitfalls.
Marion Mays, founder of the property investing mentoring firm Thalia Stanley Group has 23 years of banking and finance experience, and has spent two decades as an avid property investor.
During this time she has interviewed countless property investors in order to find out just what are the key things to successful property investing and what are the pitfalls to avoid.
“The most common words of wisdom heard from those that do well with their investments are; buy with your head, not your heart; and the profit is in the purchase,” Mays said.
“This is where most investors - and especially those new to property investing - go wrong. Most tend to treat buying an investment property just like buying their home, which translates to an emotional buy. When it comes to buying right, this is where most go about it the wrong way, too."
Mays said we commonly tend to look at agents’ windows, websites and the big property portals for suitable properties as an investment. However, there are other ways to go about it if buyers want the added value of either having fast capital gain, scope for improvement, sub-division or even development potential.
Ultimately, she said when we want to buy any other product at the best price, we look at ways to buy from those that need to sell; how we can get it at a reduced price; buy it at wholesale or direct from the producer. Come to property, most investors look only at the retail end, which in most cases means that they are paying a premium price to begin with.
‘The biggest profit is made at the point of purchase’, I have been told too many times from successful investors to ignore," she said.
Mays views property investment mentors like a personal trainer at the gym, or a professional coach for career development. They are there to help people understand and navigate the ins and outs of property investing, work out the best strategy for one's circumstances and goals, and support structuring and buying right when a purchase is ready to be made.
“It surprises me how many new investors make some of the most common mistakes and all too often, costly ones. Mostly, when they buy.
While there is a myriad of resources and information available in the market to identify the best areas and spots to invest in, many newer investors tend not to know how to use this information in the best way, how to buy right, and often end up making unnecessary mistakes," Mays said.
Always look for strong growth opportunity areas where the property is located in close proximity to public transport, work centres, shopping, good infrastructure and education
Get pre-approval of your finance, allow for some flexibility and don’t over-extend yourself
For an investment, let the numbers do the buying (head), not the heart (emotions)
Speak with a professional versed in property investing about how best to structure your investment, i.e. buying it in a trust or entity rather than your own name, using your superannuation/SMSF etc.
Do thorough due diligence and look at growth patterns and history before you buy, making your decision based on facts rather than word of mouth
“Too often I find people are buying investments based on hear-say and second-hand news, which often means that there is a lack of facts and thorough research or they are buying in areas that are already ‘old news’ in which case they are likely to pay a higher price and already diminish their investment’s gain right from the start,” Mays said.
“Buying right, does make all the difference. It is important to remember that wherever you buy, even when you are buying off-the-plan, that ultimately the agent is selling for the vendor/developer and the aim is not to help investors to buy right, but to sell them a property.
"Many investors forget that this is the underlying principle when they start looking at properties. That is why it is so important to be selective to ‘who’ and ‘what’ you are listening to.
"There are plenty of investing seminars out there and stock to be found, but it is advisable to look for an experienced property investing coach before you rush out and buy something, especially if you are new or inexperienced to property investing or don’t know the area you are looking to invest in."
Marion Mays has 27 years of experience in banking, lending, debt and asset recovery, financial planning and real estate. She holds qualifications in marketing/commerce, financial planning, professional coaching and real estate. She has been an avid investor in commercial and residential property for over 20 years.
