Avoid the mistake of only investing in your backyard

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

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