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How to be a successful property investor

How to be a successful property investor

When an outdoor parking space measuring a mere 12m2 sells for $120,000 - what does that say about property investment?

This slab of concrete in the Sydney suburb of Kirribilli sold on auction last year and indicates the frenetic state of the Sydney property market. But what does the sale say about property investment itself - and how does one become a successful property investor?

To be successful, there are several golden rules and it's imperative to be disciplined and stick to your rules no matter how attractive a deal may seem at the time.

Rule # 1 Ignore the crowds

Successful investors don't copy others. They don't speculate and they don't get caught up in the hype and enthusiasm of others - they think for themselves.

Rule # 2 Define your investment strategy

A successful property investor will develop a clearly defined investment strategy and will retain their focus on achieving those financial goals. Nothing is done on impulse but rather decisions are made after setting tangible targets and taking into account all factors such as liquidity, risk, time-frames and returns.

Rule # 3 Educate yourself

Many of those who buy property are making an emotional purchase. They often buy a property in the place that they visit on holiday or where they hope to retire and then they wait in hope. A successful investor researches the property market thoroughly. Don't rely on the opinions of others - make sure you understand all the finer details about the market, the area you're considering investing in, the demographics, resale value and property history and get information from trusted sources who have property investment experience. Increasing your own knowledge, understanding and skills helps you to minimise your risk.

Rule # 4 Consider cash-flow

Successful property investors aim to make money through capital growth, but they also aim for sustainable cash-flow.

Rule # 5 It's all about the property

Successful investors choose the right property to buy. They know what the renter or the buyer wants and they will have done their homework as to what type of property will be in demand in the future and where that property will be. Successful investors don't make spontaneous, emotional decisions and they aren't swayed by glossy brochures or attractive financing options - but rather they make rational decisions in the context of their defined financial strategy.

Rule # 6 Do it differently

Smart investors look for extra upside through renovations and improvements to the property. Buying a property below its intrinsic value and then adding value by doing some clever renovations and upgrades should add additional capital growth.

Rule # 7 Treat your property as if it were a business

Your investment property is a major asset and should be treated as such. Successful property investors know the importance of ensuring that it is correctly structured, that it meets its financial targets, complies with all the necessary regulations and that it is well managed. And that's why successful property investors turn to professional property management companies to handle their property portfolios because they know how important it is for their 'business' to be expertly run.

Rule # 8 Invest for the long-term

And one final rule that successful investors never break - and that is that property is a long-term investment. The property market is cyclical and by holding an investment over the long-term, successful investors are able to ride the inevitable peaks and troughs.

If you have bought an investment property or are considering entering the market, it would be a wise move to contact a leader in property management in Perth, Time Conti Sheffield. We have been delivering personalised service in real estate and property management in Perth for over 60 years and have the skills, experience, integrity and commitment to help you realise your dreams of becoming a successful property investor. Call us on 08 9362 5333 or visit our website for more details on all aspects of property management in Perth.

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