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Many thought 2020 was one of the most turbulent years yet, we continued to experience many unknowns in 2021, and when faced with some tough decisions it\u2019s no surprise many Australians have fallen victim to common property blunders this year.<\/p>\n
Many thought 2020 was one of the most turbulent years yet, we continued to experience many unknowns in 2021, and when faced with some tough decisions it\u2019s no surprise many Australians have fallen victim to common property blunders this year. With the start of a new year, and as we still navigate uncharted territory due to factors out of our control, Aussies should still be aware of the most common property mistakes and how to avoid them heading into what is hopefully a prosperous 2022. \u00a0<\/p>\n
Primarily considering capital city opportunities VS regional <\/strong><\/p>\n In 2020, quite a few Aussies flocked to regional towns to avoid tough restrictions, fulfil a sea or tree change dream or due to loss of income. We haven\u2019t seen the same level of activity in 2021 and I believe many have gone back to the age-old belief that you must buy in large city centres and are therefore ignoring growth opportunities in regional and coastal markets. Although a \u2018sea change\u2019 may no longer be relevant to your personal circumstances e.g. you are now physically required in the office, you can still consider these areas for an affordable investment opportunity, instead of sinking the majority of your money into a smaller place in a capital city. If you are looking to do this, look for national parks or undervalued beaches that are located in affordable capital areas.<\/p>\n Following the trends<\/strong><\/p>\n If you invest where everyone else does, you will see mediocre results. If you\u2019re hearing about it, it\u2019s probably too late! Your own individual strategy and goals are so important in property investment, so make sure you don\u2019t just follow what your friends or neighbours are doing. Evaluate your life and understand what you really want \u2013 is it a bigger backyard, a study, a balcony, proximity to cafes and restaurants? The pandemic has forced many people to realise what they truly want in their life and property. It\u2019s also important to do your own due diligence. Look at the facts and statistics available to you, some fantastic resources include Corelogic, Australian Bureau of Statistics, Real Estate Investar, sqm research. This allows you to take control of your own strategy, instead of relying on the \u2018trend\u2019.<\/p>\n Waiting to see if the market stabilises or drops<\/strong><\/p>\n At the beginning of COVID, experts predicted a major crash in the market, causing people to hold onto their deposit or batten down. Some economists predicted a mammoth 40% crash. Well as you know, this certainly didn\u2019t happen, with the ABS stating that residential property prices rose 6.7% in the June quarter 2021, the strongest quarterly growth since they began recording in 2003. The property market is very resilient and it\u2019s important to seek individual advice or expertise, as everyone\u2019s situations and goals differ. I\u2019m still finding people holding off now as it\u2019s \u2018too hot\u2019, but long-term investors\u00a0know that you can\u2019t time the market and when you\u2019re ready to buy, you buy!<\/p>\n Not considering non-traditional investment strategies e.g. duplexing, renovation, land subdivisions <\/strong><\/p>\n A buy and hold strategy, whilst popular, will not produce the same equity and results as other investment strategies. Consider duplexing – through duplexing, I created enough equity to leave my full-time job as a music teacher. I believe duplexing can become the new \u2018Great Australian Dream\u2019, as it\u2019s become so expensive for Aussies to own their quarter-acre block and big home. When you\u2019re creating these smaller units or smaller blocks, you\u2019re selling them to people who can afford to buy something smaller but can\u2019t afford the traditional home \u2014 at least not in their chosen location.<\/p>\n You can also consider subdivision. Subdividing a block in a desirable suburb can provide an instant increase in equity, and there are various strategies available to you. You could sell the land, build and hold, or build and sell. Whatever you choose, subdividing provides you with great flexibility depending on your investment or lifestyle goals.\u00a0<\/p>\n Buying a property that you\u2019re unable to add value to <\/strong><\/p>\n No matter the size of the renovation or your budget, you should always aim to achieve an \u2018equity uplift\u2019. A cosmetic renovation, not a major gut and overhaul, will increase the amount of rent you earn and add significant value. Every dollar you spend on renovation should return three dollars in value. Look at painting the property, replacing floor coverings, adding new blinds and of course bathrooms and kitchens are the money makers. If you\u2019re planning on living in the property for a significant period of time, there is no rush to add value, but this is a significant consideration for when you re-sell.<\/p>\n<\/p><\/div>\n