Time to read : 4 Minutes

When I first started investing in property, I was living in inner-city Sydney, where it was almost impossible to afford anything. I was hesitant to look outside my local area, but I eventually started exploring regional areas.  

I soon realised that I could buy properties in these areas for much less, often at around $200,000 to $300,000. This provided one of my first big lessons: don’t limit yourself to buying property only in your backyard. 

Many people feel like they need to be able to see and touch their investment properties. But, in reality, as long as you have the right systems in place – such as a good property manager and a trusted valuer – you don’t need to physically be there. 

By opening up your search to other areas, you’ll have access to more opportunities, better prices and perhaps higher growth potential. If I had stuck to only buying in Sydney, I would have missed out on some fantastic investment opportunities in other markets.

Sticking to the areas you know best is understandable, but this is usually your own backyard and the neighbouring suburbs where you went to school or currently work. 

This only represents a small market within multiple markets within thousands of markets in Australia. And if you’re looking at achieving the highest results, you need the highest number of options to start with. 

Why it can pay to think outside the box when investing in property

An analogy I’d use is fishing. You could either use one rod and hope you catch one fish, or you could go out on a boat and use a net to potentially catch hundreds of fish (responsibly, of course). Then, you could pick the one you want to keep and throw the rest back. Chances are, you’ll have a better fish at the end of the day. 

Buying real estate is easy (relatively speaking), but buying the right property is difficult. This is an aspect that’s often overlooked, especially when you’re on social media and you see lots of people outlining how easy it was for them to buy multiple properties. 

Perhaps they were lucky on one or two of their properties, or maybe the Bank of Mum and Dad helped, and those initial properties gave them the bulk of their growth. 

But you don’t want to rely on luck when it comes to allocating hundreds of thousands – if not millions – of dollars and debt to your property portfolio. 

What you do need to rely on is research, hard numbers, and reliable data to do well.

Get a good team behind you

Going through the process is difficult. You need to do the work and having the right assistance can make it seamless. If possible, it’s even better if your advisors are all in the same team. 

Imagine your solicitor or conveyancer speaking with your accountant to get the documents they need, and then forwarding on those documents to your mortgage broker, who eventually gets you the financing. Your broker then communicates to your solicitor for settlement. 

This ‘workflow’ reduces delays, and finishes with you being introduced to a property manager who can help you market the property for lease and eventually get the property tenanted to grow your cash flow. 

This is the kind of streamlining some buyer’s agencies can offer but, as with anything, make sure you do your research and compare options before committing.

Be aware of teething issues

Buying your first property is exciting but can also raise questions and issues. This is natural, and you’ll likely see most of these in the first 12 to 18 months. I have numerous properties that I’ve held for almost a decade now, and I’ve always had more issues in the first 18 months than I did in the following eight to nine years. 

Note: once the strong foundation is built for your first property, the property manager and your tenant, you’ll be off to a great start.

From there, it’s a game of rinsing and repeating. You need a repeatable system that you can then scale up to build your property portfolio. To do this, consider having multiple flows of oil to fuel your machine. 

The more you put into the machine in the first 5 to 10 years, the more the machine will give in your return on investment in the following 5 to 10 years. 

Be aware: every situation is unique so your experience could very well be different to mine.

Bottom line

Investing in property can be exciting especially once you start exploring the opportunities beyond your local area. But don’t get too carried away.  Remember, thorough research is key to your success, and having a strong team working with you will make the investment process a seamless one. 

Be patient… as you start to gain more experience, your confidence will grow, and that can potentially lead to better returns on your investments.

Edited extract from Retire filthy rich with real estate: Your step-by-step guide to building wealth through property (Wiley $29.95) by Ravi Sharma.

Financial disclaimer

The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.