If you are a first-time property investor, you should be aware of the potential pitfalls of buying residential property in Melbourne. M-City Apartments Melbourne has highlighted some of the most common pitfalls property investors should avoid. With their guidelines and tips, future property owners and landlords will make complicated and difficult investment decisions much easier.
One of the classic investment pitfalls many property investors often overlook is bargaining. When you buy a property, the only thing you think about is who you could rent it to. However, before you start looking for a tenant and buying the property, you should find out whether or not you could rent that particular property to someone. In order to become a successful landlord, you must buy property in a desired area. Also, if you purchase the wrong type of property, you may never be able to rent it. You must ensure you have bought a property in a good area. For example, you should ensure the property is not in a flood zone. No matter the price of the property, having a house in the flood zone is too risky in the long run. Also, homes located in the flood zone will be much more difficult and expensive to insure. You must carefully calculate everything, including your potential investment returns. For example, if you are renting a completely new apartment, you can increase your rent for up to 15%.
Consider Property an Investment and not a Potential Home
New landlords can often make a mistake and think about buying a property as buying a home. In order to be successful in this business, you must avoid personalizing the interior of the property. If you over-personalize it, the appeal of the property might be reduced. Also, if you are refurbishing the property before renting it, you don’t have to overspend money on bathrooms or kitchens. It is best to draw a tight budget and stick to it. Depending on the customers you are targeting, determine your budget. If you are renting a house or an apartment to a family, they will probably decorate the kitchen or the bathroom as they desire. However, if you are renting the property to students, everything should be in top order since students won’t be interested in investing in your property. When choosing a property, avoid expensive design because it will cost you more. Make sure the property has enough space for everything a tenant may need to live a normal life.
Beware of Ubiquity
It is not wise to invest in property development in large residential blocks where a high proportion of units are already owned by investors. If there are too many landlords in a particular area, in order to actually rent your property, you will have to significantly lower your price. This is usually the problem with large city center developments. Always have in mind why would a tenant choose your property above others. You must be convinced you can with the rental game if you decide to invest in competitive area.
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