Whether you’re a first-time investor or a property mogul, there are a few things you should consider before dipping your toe into real estate.

Australia’s love affair with property is nothing new. Hark back 200 years and you’ll find stories of settlers lured across the ocean by the promise of land ownership. Vast tracts of land were snapped up by savvy investors in the 1900s. And the 00s brought a boom in property development across our cities. Today we’re more likely to abide in an 80 square metre apartment than the quarter acre block so popular with our grandparents; nonetheless Australians’ passion for home ownership and property investment has never waned.

While the price of smashed avocado and whether millennials will ever be able to own a home makes for great dinner party fodder, the real question around Aussie real estate is when and how to invest. Whilst there is no crystal ball that will divine the next hot spot, there are a few hard and fast rules you should consider if you’re planning to take the plunge.

Begin with residential property
Whilst commercial property may be alluring, if you’re new to the property investment market it’s best to start with residential property. If you already own your home, then you will have some experience of both the mortgage process and the maintenance costs of running a residential property. Thus, it makes for a great place to start your property investment journey. Plus, you can usually employ the service of an agent to help you manage the property and lighten your administrative duties.

Look for that quarter acre block
Whilst a vacant lot in the inner city is probably unheard of these days, it pays to keep an eye out for a home with land attached. Generally, the more land, the greater the value of the property. While homes that are freestanding offer better value for money than a semi-detached or terraced house. It’s not so much the bricks and mortar as the land they stand upon that decides much of a property’s value.

Diversify your property locations
Don’t invest in property in the same location as your home. Why? If there’s a downturn in the market in your suburb, you will be doubly affected. And whilst we’re on the subject of diversifying, consider different types of property in your portfolio.

Are you a flipper?
The prospect of flipping a property for a massive return is the siren song of real estate but the realities of flipping don’t often match the hype. Successfully flipping a fixer-up-er requires speed and skill. Unless a big profit is predicted it can also be difficult to make money as you will be subject to capital gains. Consider the cost of renovations versus potential sale price and taxes before taking this route.

Negative gearing: yes or no
Everyone’s heard of negative gearing, but negative gearing means ‘losing’ money on an annual basis, which can make sense for some investors, especially those on high incomes. If you’re not on a high income, neutrally geared or positively geared property may better provide you with what you want from property investment.

Location! Location! Location!
When it comes to property there’s an old adage that nothing can beat Location! Location! Location! There is another homily that suggests you should buy the worst house in the best street. Both of these adages hold true. When looking for property investments, do your homework. Check council minutes for redevelopment plans, look for areas where new schools and hospitals may be built – they are great indicators of up and coming areas. And by all mean, do look for the worst house in the best street!