Expert Advice: by Lindy Lear
Introduction by Ian Hosking Richards
To win the Readers Choice award as ‘Property Advisor of the Year’ for the third time is a testament to Lindy’s passion for all things property. Her drive to share the information that led her to become a successful investor , has helped many others by giving them the tools and confidence to get started or grow their existing portfolios. Her ongoing support and guidance takes much of the stress out of a process that can be both daunting and overwhelming. She should be very proud of this award and what it represents. Well done Lindy!
Think Before You Buy
Most property investors would agree that researching a property before you buy is most important. I suggest the motto ‘ think before you buy’ could also give you much better results . Many investors make bad investment decisions on what to buy and where to buy when they focus on only one thing in their research.
Is Cashflow king?
I speak with many investors whose focus is only on researching positively geared property. Their focus is on a property that pays for itself no matter what. Their first question is always ‘what is the rental yield?’ as though this is the only important criteria. They are looking for 8% - 10% gross rental yield only and will not consider anything less as worthy of investment. When they find and buy a property based on this one criteria they often come undone. The gross rental yield does not tell the whole story and the supposed cash flow can evaporate with unexpected maintenance bills, high costs and high vacancy rates for their property.
Is Capital growth king?
Other investors only want capital growth, so they research the best growth suburbs and areas over the last 5 years and focus on buying in these suburbs. Others see and feel the hype of a boom area and jump into the market for fear of missing out. Both scenarios can bring you undone as you may be buying at the peak of the property cycle and may face years of correction before the market grows again. Whilst capital growth is what all investors want, we also need to consider property cycles, best time to buy, holding costs of the property rather than just research on one criteria.
Houses Vs Units?
Some investors focus their research on one particular type of property and exclude others. They refuse to look at apartments because they do not want to pay any strata or body corporate fees, and others only look at houses because they believe that the land is the only thing that appreciates in value. By focussing on just one criteria like individual expenses or particular type of property, it could mean missing out on opportunities in the market that could add diversity to your growing portfolio.
Local Vs Interstate
When looking for an investment property, many investors narrow their search to look at current availabilities in their local area. They want a property they can see, touch and drive past as they know their area well and feel safer investing locally. This narrow focus could mean they fail to find opportunities in other areas or states with more investment potential, better affordability & drivers for capital growth, better rental yields and lower vacancy rates. To grow a balanced low risk portfolio and avoid having all your eggs in one basket thinking about diversity before you buy could give you greater success in the long term.
Think before Buying
When an investor focusses on narrow criteria for buying it can lead to a bad decision that may affect portfolio growth for many years, despite doing all the research in the world. One of the biggest benefits of having a property advisor and mentor is that they have the experience to balance the criteria for choosing a property. They can expand your focus from local to national, from chasing just cash flow or capital growth to finding a property with both, to buying a diversity of investment types that will give you a more balanced and low risk portfolio. The best advice I can give you is to think before you buy!
Lindy Lear is a successful property investor who had a late start into investing, yet has grown her portfolio to eight properties in three years. She is a qualified property advisor and general manager of Rocket Property Group, and she won the Reader’s Choice Award in 2009, 2012 & 2013 for Property Investment Advisor of the Year. Lindy is passionate about helping others realise their goals through investing in property, and can be contacted on 1300 850 038 or visit www.rocketpropertygroup.com.au
To read more Expert Advice articles by Lindy, click here
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
Do you have more than $120k in your super fund? You could use your super to buy property - Find out how
Top Suburbs :