by Nick Gente on
Article appears under: About Property Investment,
I spoke with the local newspaper about property and they asked for some tips for new investors. Here is my list...
1. You are getting into the business of providing decent accommodation. This is a service and your tenants are your customers. Treat them as you would expect to be treated at any business; charge a fair price, fix problems quickly.
2. Invest for cash flow and let capital gain take care of itself.
3. You will go as far as your team takes you. Work with experienced and specialist accountants, lawyers, selling and buying agents, mortgage and insurance brokers, property managers etc. You get what you pay for, always, and this is a relationship business.
4. Spend time at the start of your journey to set a goal and make a plan. This isn't easy to do, but if you skip it you are trusting to luck instead, which is risky. Your team (see rule #3) will help you here.
5. If you are not willing to read the residential tenancy act and implement professional vetting, letting, inspection, arrears and maintenance procedures then consider handing the keys over to a property manager.
6. Your home is probably not going to become a good rental. You are almost always better off selling it and buying a rental following proper investment criteria.
7. Enjoy the journey. Life is too short to be angry so make sure you don't sweat the small stuff... and compared with long term growth and cashflow almost everything is small stuff.
8. For every generation, people find that it is hard to start investing at the time and then in hindsight it was easy. People look back at the GFC and think "gosh houses were cheap", forgetting that the global financial system was collapsing around us. You're just going to have to find a way.
9. People will say nasty stuff about being a landlord all the time and even more so in an election year. Just make sure you are happy that you are providing quality accommodation and ignore them. Don't read the comments section.
10. Like in any business there will be tough times. Have something bigger than money that motivates you to keep going.
11. You will succeed from building a portfolio, not from landing one great deal and wasting an eternity looking. Good enough is good enough.
12. Most investors are regular working kiwis who are getting on in life and not high rollers walking around in suits. Join the local Property Investors Association to mix with like-minded people who are open, friendly and happy to share. Completely new investors are always welcome.
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