Spend a lit­tle to save a lot long term

Pur­su­ing cheap prop­er­ties can be­come an ex­pen­sive en­deav­our while me­dian-priced in­vest­ments in blue-chip lo­ca­tions have a proven track record of suc­cess.

Mt Druitt - St Mary's Standard (East) - - REALESTATE -

EV­ERY­ONE wants a bar­gain prop­erty in­vest­ment, but bar­gains are of­ten a false econ­omy.

Most “bar­gains” are less de­sir­able prop­er­ties in less de­sir­able lo­ca­tions that are not in great de­mand.

An in­vestor might add some ini­tial value by ren­o­vat­ing, but a less de­sir­able prop­erty is less likely to grow in value as much as higher de­mand prop­er­ties in bet­ter, blue chip lo­ca­tions.

I be­lieve the best pos­si­ble in­vest­ment for peo­ple look­ing to build real wealth with the least risk is me­dian-priced prop­erty in an in­ner ur­ban lo­ca­tion.

These prop­er­ties are more likely to be priced at or slightly more than mar­ket value but are more likely to hold their value re­gard­less of mar­ket con­di­tions.

Re­gard­ing the lo­ca­tion of an in­vest­ment prop­erty, peo­ple love the idea of be­ing op­po­site the wa­ter, but it might pay in the long run to choose a prop­erty one street back from the wa­ter.

Coastal prop­er­ties gen­er­ally have more wear and tear, and salt spray is a killer when it comes to con­crete can­cer.

Once the in­vest­ment prop­erty has been se­lected, there are many sim­ple things that may cost a bit more up­front, but are guar­an­teed to save money in the long term. In­stall a smoke alarm Smoke alarms are not ex­pen­sive, but a fire can cost a for­tune and put the lives of ten­ants at risk.

In many cases, in­sur­ance poli­cies may be void for fir­ere­lated ac­ci­dents if the smoke alarm has not been checked in the past 12 months. Don’t ig­nore mould Mould might seem like a small prob­lem that is easily fixed, but if it is left for too long it can end up cost­ing a lot of money.

Try to avoid south-fac­ing prop­er­ties that are poorly ven­ti­lated. Make it se­cure By not in­stalling small things such as win­dow se­cu­rity bars, ten­ants are at un­nec­es­sary risk of harm and theft. The prop­erty dam­age from some­one break­ing in through a win­dow can of­ten be much more ex­pen­sive than the cost of a few sim­ple se­cu­rity mea­sures. Get a good prop­erty man­ager If you have a poor prop­erty man­ager or never check the prop­erty, you are un­likely to know about mi­nor re­pairs or main­te­nance that is needed.

Mi­nor re­pairs can quickly turn into ma­jor, very ex­pen­sive jobs if left unat­tended, and can be detri­men­tal to the build­ing and ten­ant’s health. Don’t skimp on trades­men Af­ter pur­chase, there can be a lot of up­front ex­penses, es­pe­cially if ren­o­va­tions are needed, so it can be tempt­ing to let a friend who does some plumb­ing on the side to redo the bath­room at a cheaper cost.

But this can end up cost­ing much more in fu­ture when you need a pro­fes­sional to fix the er­rors they have made.

Ren­o­va­tions re­quire time and skill. I al­ways out­source to a pro­fes­sional who can man­age ev­ery­thing, and will get the job done to a very high stan­dard very quickly. — Chris Gray is host of

on Sky News Busi­ness chan­nel and CEO of buy­ers’ agency Em­pire

To avoid big fu­ture costs, it pays to hire pro­fes­sion­als for ren­o­va­tions.

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