The Top 3 In Property Investing

If you were to ask 100 successful property investors to choose 3 keys to being successful in property investing, what do you think they would say?

Would it be:

Doing the numbers?

Employing a good team?

Having a watertight rental agreement?

They are all very important, but how about these 3:

Due Diligence

This is vital. You need to know everything about a potential property. From running the numbers, to median prices of properties in the neighbourhood and rental yield (to name a few). You need to know what the plans are for the area in the coming years. You need to know vacancy rates and the potential of being able to add value to your property. You need to understand the property cycle of not only the city as a whole, but of your local area, as often there are 'micro-cycles' which need to be considered too. Of course it's unlikely that you'll be able to digest all this information in a short space of time by yourself, so you may need to employ the services of some very knowledgeable people. Don't be scrooge and want to do it all yourself to save money, tapping into your knowledge base is likely to save you money (and most definitely time).

Taxes, Taxes, Taxes

As part of your very knowledgeable team, I'm sure you have a fantastic tax accountant. This person will be worth gold as they will be able to advise you on how to correctly structure your property to be tax friendly.

They no doubt will be talking to you about trusts, negative vs positive gearing, tax deductions, future capital gains etc. All these will impact the amount of tax that you are required to pay and how much money is left for you to use. So making nice with your tax accountant will be a very smart move.

Choose Wisely

To be successful you need a plan, a strategy. A strategy that you intend sticking with over the long-haul. This will save you a lot of heartache in the long run because you know which sort of property will fit with your plan, and therefore reduce the amount of of the due diligence you need to undertake. if all properties look good to you you may need to spend time and effort analysing 10 properties, as opposed to 2.

As a general rule it's a safe bet to invest in a property that: you can add value to, that is in a good location and there are positive future plans for the area.

So what would your top tips be when looking at investing in property?