The more you know about the most common mistakes that investors make, the better your likelihood of building lasting wealth.
In this series of short 5 minute videos, I discuss the common mistakes I’ve seen investors make.
Today we discuss why it’s not a good idea to only invest in your backyard.
It’s important to get out of your comfort zone when choosing an investment area.
Watch Michael explain:
• Most investors start by buying in their backyard – in their comfort zone - where they live or where they want to retire or where they want to holiday – all emotional reasons.
• They think they know the property market because they live there – Knowing your local neighbourhood is not the same as understanding the property market or how property investment works.
• Look what happened to all the investors who bought in Perth – property values have fallen for 4 years in a row
• Of the over 300,000 properties on the market at any one time, less than 5% are investment grade.
• If you live in the right suburbs in the right capital cities by all means become a local expert, but if not hire someone else to be your expert on the ground. Be careful who you hire – not an enthusiastic amateur, but a local area expert to a fly in fly out expert.
• It’s arrogant to think that you can gain the same expertise that a professional buyers agent has acquired through hundreds of purchases.
• You can research on the internet – but you can’t gain perspective or experience
• I’m not saying don’t invest in your back yard – I’m suggesting that don’t only invest in your back yard
• Avoid Fly In Fly Out buyers agents – they don’t have the on the ground knowledge - the local agents love them
With thanks to Michael Yardney's PropertyUpdate.com.au