It’s time. You’re finally ready to build that lucrative property portfolio that’s going to yield your financial freedom…
But wait! Here are some common mistakes made by property investors that you are going to want to keep in mind.
It is advised to not…
1. Follow your heart
This may be your home, your sanctuary but it’s vital that you remember to always base your decision on analytical research over emotion.
When you let emotions taint your buying decisions, you risk over-capitalization and losing the best possible outcome for your investment.
To avoid this common and human mistake, refer to this list of questions to consider when looking for property investments.
2. Drive without a destination
Too often do beginner investors make a loss by jumping into projects without necessary planning.
Success here requires you to set goals, determine where you want to end up, and then devise a cohesive plan to get there. You need to focus on both the short and long term to ensure your investment decisions gel with your overall strategy.
With your income, what is it that you want to achieve and how can you best manage your cash flow?
Need a map? Our agents can help with that.
3. Neglect your cashflow management
It’s great to dream big about your riches but you must keep your eyes wide open to all the expenses that may come along the way.
Understanding how to acquire property and how to hold property are two different things. You must figure out how much income your investment will generate and will it be enough to cover your outgoings. If it doesn’t, can you manage the shortfall?
4. Get ahead of yourself
Reality check - a short term investment goal does not mean a quick fix. You are not going to become a millionaire overnight. Not only are there costs involved but selling real estate takes time.
However, with patience you will discover the power of compounding and its ability to help you build and add to your portfolio.
5. Be a superhero
Congrats - you’ve done it! You’ve secured the perfect property investment. Now what happens next can go two ways. Many investors feel that opting to self manage their portfolio, they will save and make a greater profit.
Although this may seem feasible, think about it… Property management is a full time job.
With multiple properties they will help take on rent responsibilities, tenant responsibilities, issues with maintenance and repairs and all other responsibilities that come with managing a property.
We suggest that you don’t try to"be a superhero" and try to do it all. Get the help you need to give you the freedom to do your job right and still have a well managed property.
They say the best way to succeed is to learn from other people's mistakes.
Now that you know the 5 Top Mistakes investors make, you are one step closer to achieving your investment goals.