MUST READ for potential investors. When you should put on your skeptical face.

Quick but important lessons. MUST READ for potential investors. When you should put on your skeptical face.

Here are things we see constantly omitted when listing profit/developments (that do not paint the full picture)

1. Holding costs (somebody is paying for the land while you are building)
2. DA application costs (somebody has to put in those forms and deal with the council)
3. Compulsory Contribution (a lot of developments will get hit during the DA process)
4. Stating equity is profit. Market valuation does not indicate what goes into your pocket
5. Paying zero attention to serviceability. Yes, there is creative way to get loans, no, its not a good way to be able to ‘live’ while paying off loans. Living at home on noodles isn’t for everyone
6. Rental estimations that have no correlation to normal rentals in that suburb

There are lots and lots of people that make money in property investment. There are less that make ‘good’ money via passive income (rent) from portfolios. There is a very very small amount of people that make money under three years. Everything is possible, but you should always be skeptical of anything that is too good to be true.

Hopefully the above helps, and gives you some questions to ask. Tag friends that are investing so they have a head start!

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