The 13 Biggest Mistakes Made by Property Investors
Did you know that almost half of those who invest in property end up selling within the first five years? And most of those who stay in the market never end up buying their second investment property. However, some investors do very well.
To help you succeed in property investing, here are the 13 biggest mistakes that property investors make, so you can avoid falling into the same trap.
- Buying a property close to home (so they can drive past)
- Self-managing tenants
- Buying at auction
- Buying older properties (with no potential to add real value)
- Buying based on the look or feel of a place
- Overcapitalising
- Selling to realise a profit (when they should refinance and save the tax)
- Paying off debt (when they should create a redraw facility)
- Waiting for a downturn in the market
- Waiting for the deal of a lifetime
- Not having the correct ownership or financial structures in place
- Not allowing for all purchase costs (stamp duty, mortgage registration, LMI)
- Selling property to finance lifestyle
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The 7 Biggest Mistakes Property Investors Make (And How To Avoid Them)
Are you Investing or Gambling?
Property Investment is never about luck or emotional buying. On many occasions, we see consumers hopping from different new project show units just to find “the Right One”. But how exactly will this “Right one” presents itself in the face of consumers?
If you had answered “Ambience” and “Feel” of the unit, you are emotional buying. Many times, these feelings have clouded the analytical skills of the consumers, making them overlook other critical aspects such as the land appreciation, location, sensitive pricing/discounts and market sentiments. By the time when the consumers are prospecting for new house, they will themselves in situation where their current property is not fetching the desired price and they have missed the opportune time to enter the market.
Real investors are clear with their goals and what they want out of their property investments. They do not rely on hope that the market will one day, change in their favour. Rather, they are aware of the cycle and when to make the “Right move”.
So, are you an investor or gambler? If you are determined to be a savvy investor, you will definitely be interested in the following.
How do you Determine the Right Cycle, the Right Time and Right Price to Enter?
At the first, second and even third glance, you may not be able to figure out all the information which this chart is trying to convey. However, if you study in detail or with some guidance, you will be able to mark out a certain trend that is brewing in the market.
Based on this cycle, you can also identify the best opportune time and price to enter the market.
So the Question now is:
Is This the Right Time to Buy in Today’s Market?
Just understanding the cycle is not sufficient.
Here are the 5 Essential Elements which you Must Know in order to build Successful Investment Portfolio in CCR Segment:
1. What are the Impacts of the Latest Announcement of the Reduction in Government Land Sale?
2. Supply vs Demand
Should we buy when the supply is plenty in the market?
3. Location vs Entry Price
Which is more important? Many always think that buying a good location near MRT is the safest bet as it is easier to rent out. However, is that really true?
4. New Launch vs Resale Property
Are you aware which one is likely to drive higher profit margin?
5. How can we secure the First Mover Advantage?