3 Things That Trip Up Property Investors (And How to Avoid Them)

14 May

Whether you're actively in the market or still weighing up your next move, there's a good chance one of these three things is slowing you down. I see them come up again and again with clients, and honestly, I've been caught by them too.

Here's what to watch out for.

1. Don't Walk Away Over $10k (It Only Costs a Coffee a Week)

I have watched clients lose a cashflow positive deal over a $10k difference on purchase price.

I get it. Because I've done the same in my early days.

But here’s the math. An extra $10k on an interest only mortgage is the cost of one coffee a week in interest.

In ten years you won’t remember whether you paid $420k or $430k. You will remember whether you bought the property or not.

If the numbers work, the numbers work.

Do not lose the opportunity to buy a long-term cashflowing investment over the price of a soy latte.

2. Getting Hung Up on CVs and Online Estimates

CVs, homes.co.nz figures - these are algorithms. They were never designed to value individual properties for purchase decisions, and they certainly do not know how to gauge relative interior condition.

Agents should also not be your guide on post-reno valuations. They have an incentive to sell you the property you are standing in (or to get the listing for one).

The only professional you should listen to is a registered valuer.

This is a strategy in itself. If you want to know how much equity uplift is in a deal, you can ask a valuer to give you an "as-is" and "post-renovation" value.

Based on these figures (as long as you know your reno budget) you can work out how much equity you can make on the deal before you go unconditional.

As a rough guide, you can also look at recent comparable sales. Same suburb. Same property type and quality. Sold in the last few months.

If the deal meets your goals, ignore the algorithm.

3. There Is No Perfect Time to Buy. There Never Will Be.

There will always be headwinds. There will always be tailwinds.

The market does not reward perfect timing. It rewards action when the numbers work. If you have run the analysis, stress-tested the deal, and it stacks - that is your green light.

Not the next OCR decision. Not another month of watching the market.

If you are doing it right, the cashflow is high enough that it can weather all types of storms.

The investors I see building real portfolios are not the ones who timed the market perfectly. They are the ones who did the analysis, trusted the method, and acted. Time in the market has only made these deals stronger.