Professionals Real Estate 
Only a tiny proportion of individuals ever to go on to build a successful property portfolio as revealed by Australian Tax Office (ATO) figures according to Shane Kempton, CEO of Professionals Real Estate Group.
“ATO figures show that 72.8% of individuals who owned an investment property owned just one while 18.9% of individuals owned two. Only 0.9% individuals or less than one in a hundred owned six properties or more.”
“The main reason why so many individuals fail to own several properties is that they make mistakes with their very first property purchase. This then prevents them from moving on to buying additional properties. However, individuals who do make the correct decisions at the start off stage in property investment can go on to amass a highly successful property portfolio which will help fund a comfortable retirement. This is why is it critical to undertake extensive research before buying your first investment property to avoid simple mistakes that can undermine a long term strategy of creating wealth through property investment.”
“Property still remains one of the best ways for mum and dad investors to create wealth and this has been proven over many years with Perth real estate achieving high level of capital growth consistently over several decades,” he said.
Many first time investors never buy more than one investment property because they make simple mistakes which include:
- Buying an investment property they would like to live in without thoroughly looking at capital growth and rental return potential.
- Deciding to buy an investment property close to their owner occupier home rather than looking at investment opportunities throughout WA or indeed Australia.
- Selecting a property based upon advice of friends or family rather than seeking independent information.
- Buying into an area that is heavily marketed rather than focusing on overlooked suburbs that might present better long term capital growth – i.e. sleeper suburbs.
- Not undertaking a full assessment of the true cost of buying and holding the property. For example, if the property an apartment, there are additional cost issues compared to buying a stand alone house such as strata fees.
- Selecting the wrong home loan i.e. principal and interest rather than interest only which will help increase cash flow.
- Buying a property in a location which is not attractive to tenants i.e. not close to amenities such as shops or transport.
- Purchasing a property in an area where there is an oversupply of properties meaning rents will be low and capital growth rates limited.
- Trying to select the tenant themselves rather than using the services of a number of reliable property management companies.
- Buying an investment property with the view to a quick return rather than viewing it as a long term investment and stepping ladder to purchasing a portfolio of properties that will fund their retirement.
