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5 Common Mistakes To Avoid With Investment Properties In Sydney


21/09/2021

Property investment in Sydney is an art. While you may think that it is easy to determine whether a development will be profitable or not, in practice, it is much harder. As property developers, we can tell you that strategic investment into properties takes time, skill and experience. As a beginner, you will stumble, however, there are a few mistakes that we can warn you about. With any profession, there are common errors that can be made throughout the process. With time, the risk of you making these mistakes will reduce, however, it’s best if you remain wary of them.

As property developers, our team has a similar job to do. While we may depend on investors for financial backing, we also know that our development projects need to be economically and practically valuable. Many of the mistakes we identify in this article are relevant to up and coming property developers. Many of the same guidelines and criteria used to assess the investment value of a property are what an investor should also use.

1—Don’t let emotions cloud your judgement

While most people develop or invest in a new home with excitement, joy and a certain level of sentimentalism attached, you cannot do this in your professional capacity as an investor or developer. Economics and practicality must trump any attachment that you have to a site or development. Even though you may have some form of emotional attachment or hope for a site, you should base your professional decisions on demographic data, financial forecasts and infrastructure in order to secure a return on your investment.

2—Don’t be overly cautious or impulsive

Riding the line between being impulsive and overly cautious can be difficult, however, with time it will come naturally to you.  Being too keen or in a hurry to secure a development or piece of land can lead to a poorly informed decision. However, on the flip side, being apprehensive about a decision when you have thoroughly researched it can cause you to miss a profitable opportunity. You have to accept that you won’t know everything about a development, however, you also need to know that research is key to feeling comfortable and being calculated. 

You’ll always have something that could have gone better with a project. Every project is a learning experience. The key is channeling that experience into your next venture.

3—Understand the slow but rewarding nature of the industry

The property development industry is slow but rewarding. It can take months and sometimes years to reach a stage of comfortable profitability. The only people who make money quickly in our business are those who target short-term investments. Short-term investments are usually about speculation and will not get you major profits. However, strategically investing and developing is how you become established in your industry and earn major rewards in the long run.

4—Realise that you must plan for the future

On a similar wavelength, many people who enter our industry don’t realise how much research into the future is necessary for our field. Remember that we are investing and developing builds that should be profitable for decades after they are constructed. This requires significant research into what a particular suburb’s infrastructure, demographics and economy may look like. You may even have to look at immigration patterns or future federal and state legislation to understand how the population and their disposable income may change.

5—Be through with your research

Lastly, be thorough with your research. Don’t look at one study or one piece of data and think that it is sufficient. You need to spend a considerable amount of time finding patterns in your industry and searching for data that will make your ultimate decision more accurate. 

Investment properties are crucial in your career

Unlike many jobs, property investors have a financially, very risky career – especially in the beginning. We urge any beginner and even seasoned investors and developers to keep our advice in mind. Though you can expect some level of failure in your job (this happens in most careers), any oversight or neglect on your part with a high-value project can seriously set your career and financial security in reverse.

What suburbs do we recommend for investment and development?

Before we end this article, here are some of the suburbs that we recommend for investment and development. Bear in mind that while we view these as generally lucrative, a project’s value and return on investment are based on more than a location.

Here are our recommendations:

  • Narrabeen
  • Collaroy
  • Bardwell Park
  • Fairlight
  • Cronulla
  • Petersham
  • Bexley

If you’d like more industry insight and advice, reach out to the Cite Group team.

BACK TO POSTS

5 Common Mistakes To Avoid With Investment Properties In Sydney


21/09/2021

Property investment in Sydney is an art. While you may think that it is easy to determine whether a development will be profitable or not, in practice, it is much harder. As property developers, we can tell you that strategic investment into properties takes time, skill and experience. As a beginner, you will stumble, however, there are a few mistakes that we can warn you about. With any profession, there are common errors that can be made throughout the process. With time, the risk of you making these mistakes will reduce, however, it’s best if you remain wary of them.

As property developers, our team has a similar job to do. While we may depend on investors for financial backing, we also know that our development projects need to be economically and practically valuable. Many of the mistakes we identify in this article are relevant to up and coming property developers. Many of the same guidelines and criteria used to assess the investment value of a property are what an investor should also use.

1—Don’t let emotions cloud your judgement

While most people develop or invest in a new home with excitement, joy and a certain level of sentimentalism attached, you cannot do this in your professional capacity as an investor or developer. Economics and practicality must trump any attachment that you have to a site or development. Even though you may have some form of emotional attachment or hope for a site, you should base your professional decisions on demographic data, financial forecasts and infrastructure in order to secure a return on your investment.

2—Don’t be overly cautious or impulsive

Riding the line between being impulsive and overly cautious can be difficult, however, with time it will come naturally to you.  Being too keen or in a hurry to secure a development or piece of land can lead to a poorly informed decision. However, on the flip side, being apprehensive about a decision when you have thoroughly researched it can cause you to miss a profitable opportunity. You have to accept that you won’t know everything about a development, however, you also need to know that research is key to feeling comfortable and being calculated. 

You’ll always have something that could have gone better with a project. Every project is a learning experience. The key is channeling that experience into your next venture.

3—Understand the slow but rewarding nature of the industry

The property development industry is slow but rewarding. It can take months and sometimes years to reach a stage of comfortable profitability. The only people who make money quickly in our business are those who target short-term investments. Short-term investments are usually about speculation and will not get you major profits. However, strategically investing and developing is how you become established in your industry and earn major rewards in the long run.

4—Realise that you must plan for the future

On a similar wavelength, many people who enter our industry don’t realise how much research into the future is necessary for our field. Remember that we are investing and developing builds that should be profitable for decades after they are constructed. This requires significant research into what a particular suburb’s infrastructure, demographics and economy may look like. You may even have to look at immigration patterns or future federal and state legislation to understand how the population and their disposable income may change.

5—Be through with your research

Lastly, be thorough with your research. Don’t look at one study or one piece of data and think that it is sufficient. You need to spend a considerable amount of time finding patterns in your industry and searching for data that will make your ultimate decision more accurate. 

Investment properties are crucial in your career

Unlike many jobs, property investors have a financially, very risky career – especially in the beginning. We urge any beginner and even seasoned investors and developers to keep our advice in mind. Though you can expect some level of failure in your job (this happens in most careers), any oversight or neglect on your part with a high-value project can seriously set your career and financial security in reverse.

What suburbs do we recommend for investment and development?

Before we end this article, here are some of the suburbs that we recommend for investment and development. Bear in mind that while we view these as generally lucrative, a project’s value and return on investment are based on more than a location.

Here are our recommendations:

  • Narrabeen
  • Collaroy
  • Bardwell Park
  • Fairlight
  • Cronulla
  • Petersham
  • Bexley

If you’d like more industry insight and advice, reach out to the Cite Group team.

BACK TO POSTS