The hidden dangers of investing in property
When it comes to investing in property, there are several things that can jeopardise the perfect sale to add to your portfolio.
While it's important to be aware of the risks, there are also a few hidden “dangers” that each buyer needs to feel out on an individual basis.
In order to make the best decisions, keep a lookout for these secret dangers in investing in property and how to properly manage them.
Buying in your local neighbourhood
Despite emotional attachment, investing in the neighbourhood you live in may not be the best idea for long-term capital growth.
If there are over 10,000 real estate markets across Australia, statistically speaking the odds are very low that the property for sale right next door is your best choice.
In order to make the best choices, it’s best to analyse and compare markets from all over the country to make the perfect pick and to minimise risk.
Relying on “friendly” real estate agents
While a lot of agents are there to guide you through the selling and buying process, it's easy to fall for a real estate agent’s charm.
Just remember, they are working for the vendor, and their best interest is maximum profit for their client.
The same goes for non-independent buyer’s agents who effectively are just sales agents for developers.
Do your own research and comparisons on any investment, or seek the help of a truly independent buyer’s agent to assist you in the process.
Not considering the risks in investment
Buying property is a risky game, as vacancy, bad tenants or even interest rate rises can throw a spanner in the works.
Engaging with professionals can help mitigate the risks, and help you be more aware of the harsh reality of investing.
It’s important to embrace these risks and learn how to reduce them, not shy away from them.
Short term vs. long term
Buyers, investors and estate agents can tend to be reactive to what is happening in the market right now, and focusing on short term gains.
The key to success in property is to take a long-term approach and ignore all the short-term noise.
Starting with a plan first, then actively seeking out properties that suit your investment criteria will move you away from just being another property speculator to a true investor.
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