Scott O'Neill

You've just got to be careful with that.

It's just something that people can get unstuck if they get too fixated on it.

The first thing we do is check the numbers.

Now, I know that sounds extremely basic, but there's a bit more to it than one would think.

The rental rates.

Making sure the rental rate is fair.

So let's say you're buying a property and it's renting for $150 a square meter.

You can then compare what all your neighbors are renting.

And if they're all paying $160, $170, $150, $180, you can start to form an opinion that maybe the rent's kind of a little bit under because everyone else is averaging about $160.

So that's good.

That's a tick.

That means your rent's not overinflated.

Second part of checking the numbers is making sure the outgoings are what the agent or the owner has stated.

Because there's no point buying a property if your outgoings were meant to be 20 grand a year, but really they're 40,000.

Because that extra 20 grand in outgoings over underestimated could actually destroy the return on the investment.

So that would mean you overpaid for it if you didn't get your head around what the true outgoings were on the property.

And another part of checking the numbers is just checking the tenant has been paying the amount promised.

So imagine you've bought a property and it's paying 100 grand a year, but really the tenant had missed six months of payments.

Then the numbers don't stack up.

The numbers are about quantifying and qualifying exactly the true net return annually.