Property investor mistakes to avoid

With so much to think about as an investor, it can be difficult to see where you may be making some common investing mistakes. From the ups and downs of property prices to interest rate changes, it’s important you remember a few key things to maximise the value you get from your investment properties. In this article, we share a few of the common mistakes you should avoid when it comes to property investment.

Leaving your property vacant due to high rent

Just a week of vacancy can undo any of the gains you might have seen through a lofty increase in your rental prices. Be smart about the prices you set for your rental properties and talk to your property manager for their recommendation. You’d rather have a tenant locked in quickly rather than having your property sit vacant and losing money.

Not prioritising your debt

There are some types of debt you should pay off as quickly as possible, such as credit card debt. Other types of debt may provide you with a tax deduction, such as loans taken out to repair or improve your investment property. It’s wise to pay down any debt that won’t contribute to a larger tax return quickly. You can then start paying off tax-deductible debt when you can. Make sure you speak to a financial adviser so they can assess your unique situation and help you decide the best order to pay down your debt.

Managing your own property

It can be tempting to think you can manage your investment property yourself. However, there are hundreds of little tasks and processes that go into efficiently managing a rental property. Leave the management of your property with a professional so you can focus on your investment strategy.

Forgetting to claim depreciation

A common area where property investors fall short at tax time is maximising their depreciation deductions. When done properly, maximising your depreciation claims can add thousands to your tax return. If you don’t have one already, make sure you get a depreciation schedule drawn up for your property to maximise your deductions.

Not increasing rents

Many property investors fall into the trap of no increasing the rental price when renewing a tenant’s lease. If you do this, you can end up in a situation where you need to increase your rent by at least $50 to catch up on past stagnant rent prices. When your leases come due for renewal, consider increasing the rent by $10 or $20. These small increases are more palatable tenants, and your rent will grow in line with market growth.

There are lots of things to remember when you’re a property investor. Being mindful of the pitfalls above can help you become a better investor and make sure you’re always prepared to capitalise on new market opportunities.

Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.

Related Articles & Videos

Downsizing? What To Expect.

July 21, 2021

After your kids move out, or in a scenario wherein the extra bedrooms are just not being used, a house that seems 'too big' may not be fun. This artic…

Read More >

Getting ready for tax time.

June 15, 2021

End of another financial year, we all know what that means: Tax time is coming. With everything you need to remember to get ready for tax time, it can…

Read More >

Join 30,000 local homeowners and investors.

Get our latest articles & videos straight to your inbox. It’s just easier that way.