We’re not talking about classic mistakes such as not doing your research before buying.
In fact, it’s in doing the research that could cost you the biggest financial pain.
That’s because this is where a lot of investors commit their biggest missteps.
Therefore, becoming aware of these mistakes is important if you want to avoid losing your hard-earned cash.
So here are the 4 deadly property investment mistakes you must avoid at all costs.
Investment mistake #1: Making a strategy fit an area
Having a strategy is important if you want to succeed as an investor.
However, rigidly sticking with the strategy rather than focusing on the result can have costly consequences.
For example, if you’re pursuing a renovate for-profit strategy and are looking to invest in Moreton Bay in Queensland, you’re likely to be targeting 30 years old unrenovated homes.
But this type of property isn’t what the demographics of that area want.
These people have dual-income, high-paying jobs.
They want a 4-bedroom, 2-bathroom, double lock-up garage house.
They want a relatively brand new or up to five-years-old property, not a renovated 30 years old property.
Therefore, it’s crucial to really understand the demographics of an area and what’s in demand to ensure you’re buying the right product.
Investment mistake #2: Becoming emotionally attached to an area or property type
It happens to many of us.
You come across a property expert extolling the big profit potential of an area and we jump onto the bandwagon.
For example, if an expert recommends Moreton Bay and suggests looking at units or townhouses, you’d probably want to target them too.
So you go into the area has already developed a personal preference towards townhouses or units because you’ve been told of its potential.
But based on research on the demographics of the area, it shows that a 2-bedroom unit will be a death sentence.
The demographics aren’t keen on this type of property.
They want a relatively new, 4-bedroom, 2-bathroom, double lock-up garage.
To ensure you avoid this mistake, look at what’s in demand in the area and understand your potential buyers and renters, not blindly following an expert’s recommendation.
Investment mistake #3: Relying on partial advice
It’s human nature.
When it comes down to choosing between paying more for something better and getting a cheaper but lesser version, most of us will opt for the latter.
Although we know instinctively that you get what you pay for, we’re still attracted to short-term “savings”.
This is especially true with property investment advice.
Unfortunately, trying to save money by relying on cheaper but incomplete advice could cost you more over the long term.
That’s because you end up filling the gaps with your personal preferences, emotions, or skills and you’ll get it completely wrong.
If you have to rely on a report or recommendation, make sure that it gives you all the information you need to make an informed investment decision and leaves you filling in the blanks.
Investment mistake #4: Following the crowd
There might be safety in numbers, but when it comes to investing in property, more investors in an area don’t always spell profits.
Granted that there are benefits of banding together such as the ability to buy at a lower price, there’s equally a huge risk with this strategy.
Joining the herd creates a lot of competition in that market.
A lot of investors in an area mean higher competition for renters and for buyers when it’s time to sell.
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