Avoid these mistakes:

To succeed as a property investor, you need to avoid certain pitfalls

Mistakes made by some new landlords include:

Treating it as a hobby

The best investors remain unemotional about their properties. If you drive past each week to check the roses, perhaps you need to consciously distance yourself from the property.

Making friends with tenants

It’s not easy to serve an arrears notice on someone with whom you have a close relationship. The same applies to rent increases and bond claims.

Thinking of it as home

Good investment opportunities can be missed if investors judge properties by their own needs. For example, you may choose not to live in a home with no parking, but one close to shopping and schools may be a great investment.

Neglecting the property

Improvements such as a coat of paint or necessary repairs can make a big difference to the value of your property and increase the rental yield substantially.

Not having a depreciation schedule

A depreciation schedule is the inventory of items that can be depreciated to claim a tax deduction. By investing a few hundred dollars to have a schedule prepared you can save thousands of dollars in tax.

Not increasing rents regularly

A small, regular rent increase is much better than a large, infrequent one that shocks the tenant so much they move out. As long as the increase is reasonable you should have no problems with your tenant.

Forgetting the bigger picture

In the excitement of buying your rst property, you may forget the bigger picture of building a portfolio. Remember, the greater your equity and rental returns, generally the more you can borrow towards that portfolio.

Paying down in the wrong order

It can be tax effective to pay down non-tax deductible debts (such as home loans) before a tax deductible investment debt. Most investors have their investment properties in interest only loans until they eliminate non-tax deductable debt.

Using the wrong accountant

Good accountants who understand property are worth their weight in gold. Such an accountant can advise you as to how to structure your property portfolio around your plans.

Failing to use an experienced Property Manager

For a couple of dollars a day a Property Manager can save you thousands by ensuring your vacancy rate is low and your property obtains the highest possible rent.