When it comes to property investment, everyone seems to have an opinion or advice to offer. However, not all advice is created equal. In this article, we have compiled the top five popular pieces of advice that you should ignore as a property investor. By avoiding these common misconceptions, you can make more informed decisions and increase your chances of success.
Risky Tip # 1: Buy in one area only
Contrary to popular belief, buying properties in one area only is rarely the best approach. A diversified portfolio can add stability and reduce risk. By investing in different locations, you can capitalise on the best opportunities available at the time of purchase. Conduct thorough research to identify areas with strong growth potential and invest accordingly. Diversify Your Investments instead.
Risky Tip # 2: Purchase an investment property because it “looks good”:
Making a property investment solely based on its visual appeal is a mistake. Instead, your decision should be backed by extensive independent research. Don’t be swayed by advertisements or open homes. Determine the type of property that aligns with your investment goals and suits your needs. Consider factors such as potential for growth, rental demand, and long-term profitability. Don’t Rely on Appearances, know your strategy and stick to it.
Risky Tip # 3: Listening to someone who has never invested in property:
While friends and family may mean well, their lack of property investment experience can lead to biased advice or unfounded fears. It’s crucial to consult professionals who have a deep understanding of the market and can provide objective guidance. Engage with financial advisors, property consultants, and a good property strategist to make informed investment decisions. Seek Professional Advice
Risky Tip # 4: Buy property in an area where there is a one main draw-card or feature:
Avoid the temptation of buying property in an area solely based on a single draw-card or feature, such as a new shopping center. While these developments may generate short-term interest gains, sustainable long-term growth requires a broader perspective. Look for areas with multiple income sources and infrastructure projects, such as planned railway lines, freeways, or other facilities. Ask yourself the question, where is population growth and jobgrowth going to come from? The combined effect of these projects can significantly enhance an area’s potential for long-term growth and increase property values. Consider the Big Picture.
Risky Tip # 5: Buy into a hotel or serviced apartment complex in a holiday area:
Investing in hotels or serviced apartments in popular holiday areas may seem attractive due to potential personal benefits. However, such properties often have poor growth records despite offering seemingly decent yields. Typically the body corporate, rates and other special cost are reducing the gross yields to a large extend. A desirable holiday destination does not always translate into a lucrative investment location. Evaluate properties based on their long-term growth and capital gain potential, rental demand outside of peak seasons, and overall market stability. Beware of Holiday Investments
By disregarding these common misconceptions and focusing on informed decision-making, Australian property investors can increase their chances of success. Remember to conduct thorough research, seek professional advice, diversify your portfolio, consider long-term growth factors, and evaluate investments beyond superficial appearances.
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Property Friends is a specialist Property Investment Strategist that provides solutions for people aspiring to financial independence, choices in retirement, or leaving a legacy. www.propertyfriends.com.au (03) 9758 5331