Buying property can be a great investment option so long as you put safeguards and initiatives in place to minimise your risk and maximise your return.

MARQ Property New Client Consultant Lucy Crouch said buyers should consider a raft of smart decisions when weighing up how to best invest in real estate to make the exercise as profitable and safe as possible.

At the end of the day, you will want to make sure you’re getting the best ‘bang for your buck’ while identifying and controlling any potential risks.

“Risk factors can be minimised by looking at where the property is located, particularly its proximity to amenities, transport and high traffic areas, before you buy,” Lucy said.

“These factors should be big considerations when you’re looking to buy real estate because it will ultimately help attract tenants.

“It’s also wise to look for a property that is well maintained both internally and externally to avoid having to pay out for extra maintenance, especially jobs you may not have budgeted for.

“A well-kept property will also help attract a high quality tenant and perhaps one that wants to stay in the property for a longer period of time.”

Lucy said ensuring you have a trustworthy agent who completes the necessary reference checks and recommends landlord’s insurance will also help to reduce any risks, as would diversifying your investment property portfolio.

Diversification helps to spread you risk across several investment types and essentially protect yourself from potential losses.

For example, owning several similar properties in the same area can be dangerous if a certain area or specific property doesn’t experience growth or isn’t a popular choice with tenants. If there is a decline in one area that loss may be offset by growth of another property in a different suburb.

“Mitigate your risk by diversifying your purchases and invest in a broad variety of real estate products,” Lucy said.

“Purchasing different properties in different locations with different rental markets will help promote growth and may offset any issues should one of the investments not go to plan.”