Like any forms of investing, property investment does come with its own risks and challenges, and for some, with it comes doubts about whether it’s something they should venture into. Well, think of the old adage, nothing ventured, nothing gained.

Whether its money for kids education or wanting to retire early, property has helped many people reach their financial goals – and you could be one of them. The key to successful property investing is knowing the challenges you face and working out how to overcome them.

Here are our suggestions of how to tackle some common property challenges:

Challenge 1: Raising the capital

This is always top of the property investor challenge list, particularly for people who are venturing into investment property for the first time.

If you have a regular income and/or equity in your residential property talk to a financial expert.

Although you may think you haven’t enough equity in your own home, or your deposit is too small, talk to a mortgage broker who has contacts with a huge range of financial institutions. Then do some number crunching.

If you aren’t in an immediate position to buy a property, work out how you can get into the position you want to be in. This may mean changing your lifestyle or taking a second job for a while.

Challenge 2: Buying the right property

Just about everyone will have a bit of self-doubt at some point and wonder if there is a better property about to come on the market.

It’s important at this stage your mind set is right; view property as a business and with any business, do your homework. Read the articles about investing in property, speak to a property specialist or knowledgeable friend or colleague who will tell you what type of property to look for and suggest locations.

Challenge 3: Getting the right tenants

We all hear about the horror stories of bad tenants in the media and internet, but we don’t hear about the majority of tenants who pay their rent on time, look after and generally treat their rental property as their home.

Using a property manager is the best way to overcome this challenge; a good property manager will advertise your property in all the right places, and use many screening tools, such as employment verification, contacting previous landlords, credit checks and using a tenant database to ensure you get a good, reliable tenant.

Plus they will continue to communicate with the tenant, make regular inspections and update you with reports, giving you peace of mind your property is being properly cared for.

Challenge 4: Change in financial situation

Life is full of uncertainties, so plan for the worst-case scenario by reducing your risk. Some banks and financial institutions are still offering interest only loans on investment properties and this may help keep payments manageable.

The golden rule here is don’t stretch yourself too far; many people work on a conservative loan to valuation ratio of a maximum of 80%. Look at all opportunities and be open-minded; there is always a property that will come on the market that will suit your financial situation and it may not necessarily be in the location or be the type of property you originally thought you would buy.

If you want to know more about property investing, would like to talk to us about your concerns and some of the challenges you’re facing, or even ask whether a property you’ve seen is suitable for rental, our experienced team would love to help. We can give you lots of information to help you make informed decisions on your property investment journey.

Simply give us a ring on 02 4956 9777, send us an email to mail@newcastlepropertymanagement.com.au or pop into our Cardiff office for a chat.

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