Hotspot expert's top 10 traits of a successful 2024 property investor

Plenty of Australians invest in property, but less than 1 per cent do it in such a way that they will successfully build a portfolio.

Even people with very little property knowledge can buy one investment property, but it’s only by buying multiple properties and building a portfolio that you can generate the level of return you need to effectively replace your income or achieve your desired retirement.

Plenty start out with the objective of building a portfolio, but few do. Australian Bureau of Statistics figures show that of the 2.2 million Australians who own an investment property less than 1 per cent own five or more.

One of the big mistakes I see from property investors make right from the start is they don’t treat investing like a business.

That doesn’t mean you need to be chained to your desk from 9 to 5 every day, but successful investors don’t treat it like a hobby, they do the hard work and research and seek advice from experts.

The most important thing is to be buying high performance properties and if you get the first one wrong it makes it harder to get finance to buy the next one.

Property investing is a skill, which can be learned like any skill.

Ten traits all successful investors share

Know your risk

Think long and hard about how much risk you are prepared to take and what your risk profile is. This will guide the type of investment you will make. Understand your borrowing capacity and your monthly budget so you don’t bite off more than you can chew. Make sure you have clear long-term goals before you buy.

Understand volatility

Property markets can be volatile but understand as a residential property investor, it’s often just an on-paper loss. You should be in it for the long run, so don’t panic sell at the first sign of a downturn.

Be decisive

Plenty of people want to invest but become paralysed when it is time to make a move. The best way to overcome this fear is through educating yourself about the market. Successful investors act, if you continue to wait for the right time, you will waste your entire life, and nothing will happen

Be actively passive

While it’s important to be across everything when you are looking to buy and in the due diligence stage, once you make an investment you can set and forget. You are paying experts, like property managers, to look after your property for you, so let them do the work.

Question everything

If you are paying for professional advice, make sure you get it. Ask plenty of questions and also make sure the team you select to help you invest in property have personal investment experience as well.

Avoid speculation

Speculation is for those who jump in and out of the market and is not a good way to invest in property. Time in the market is what is important. It is one of the truisms about property investment that the longer you hold an asset the more likely it is to increase in value. Buying and selling too often will lead to high levels of transaction costs that will eat away at profits.

Don’t get emotional

Property investment is a business decision – treat it like one. Don’t select assets with your heart; use your head to weigh up the pros and cons. This allows you to have the confidence to move quickly when others are fearful.

Be a realist

Good investors have learned to shut out the noise emanating from media and commentators, and they calmly evaluate investment avenues based purely on what data and logic says about a situation.

Diversify

Just like in the stock market, good investors diversify. Don’t buy all your properties in one state. Property markets are cyclical, so if you have your assets spread out, you’ll be assured that at any one time some of your assets are in markets that are performing well.

Build a team

I can’t stress this enough; you need a team of experts you can rely on. You need to build a partnership with your experts. The biggest mistake I see is that most investors are not willing to spend a little money on advice (which is tax deductable) to make money.