Investors have been surging into real estate. What are your top three tips for would-be property investors?

Oh, property! How do I love thee! Let me count the ways. What! Just three tips investing in property?

Property investment can be a beautiful thing. But let’s be clear: plenty of people lose plenty of dough on property. Or, nearly as bad, don’t make any money. Largely because they buy the wrong stuff.

Tip one: Understand property’s golden rule – land appreciates, buildings depreciate. Land has scarcity value. It is what underpins the value of any property.

The land on which the building sits appreciates in value with demand. Buildings, over time, fall apart (depreciate), or require considerable dollars to maintain.

Don’t get sucked in by slick sales pitches to buy high-rise units, or houses in “next big thing” towns, based on cashflow promises or some big mining development.

Buy property in the “middle ring” of the major state capitals – they have more constant demand for rental and sales, but you’ll still be able to buy houses with land.

Two: Get your financing right. If you’re looking to build a property portfolio, you need a good lending partner. Start with a mortgage broker, who will be able to match your situation and property ambitions with the right lender.

Three: Understand property’s time frame. Essentially, it’s a forever investment. In your noggin when you buy, you must be thinking a minimum of 10 years.

That’s partly because of property’s transaction costs – around 4-5 per cent in stamp duties to purchase and around 3 to 3.5 per cent in selling costs.

But it’s also about the gearing. Any gearing strategy demands longer time frames to be able to ride cycles.

Bruce Brammall is the principal adviser with Bruce Brammall Financial (www.brucebrammallfinancial.com.au) and author of Mortgages Made Easy.