TOP TIPS

3rd July 2006

Many investors place too much emphasis on looking rich rather than becoming rich, and make the mistake of buying properties based on cosmetic appeal instead of growth potential.

Buying a property just because it's pretty could mean you end up with an under-performing investment.

Some key factors to consider when weighing up aesthetic appeal versus potential growth include:

" Just because a property looks impressive or is well maintained does not automatically mean it will perform well in the growth stakes. Growth should be your number one priority at all times. It is always better to select a property with superior growth potential than one which simply "looks nice."

" Be a visionary. Less attractive properties are often overlooked because most people can't see their potential. This is where clever investors can make money by picking up properties which have great growth prospects, but with a lower price tag.

" Remember, you can come out on top by spending a little to prettify your "ugly duckling" investment. While homes with cosmetic appeal attract a pricey premium, an ugly duckling may cost less. Those savings will usually more than cover cosmetic improvements that can turn your property into a lucrative swan.

" You don't have to get your hands dirty. Many buyers say they don't want, or don't have the time, to repaint or recarpet their new investment - but you don't have to do it yourself! When considering buying one of these properties, simply factor in the cost of hiring someone to do the work; there are professionals who offer this service.

" Cosmetic improvements may help boost your rental return. Snapping up the right property in the right location, and then beautifying it can increase your rental return above that of more expensive, already-attractive properties.

" Don't forget - you can improve the look of a property, but you can't convert a low-growth property to high-growth one with just a lick of paint. This means staying focused on securing properties with key growth drivers, such as proximity to lifestyle attractions or the ocean.