Mistakes are a part of life, and property investment is no different – but would it be nice to know which mistakes you could avoid.
That’s why we’re producing this weekly series of short videos and the topic of today’s video comes from a question left on our website in response to a previous video.
Paula Lean Parkdale, Victoria left the following question:
“I’m keen to get into property investment, but I don’t want to make the same mistakes that other beginning investors make. What are the common errors I should avoid?”
Watch the video as Michael explains:
• You tend to read all the success stories in the magazine, but not about all the failures, and you can learn more from others mistakes than you can from their successes. They should write a book about all the property investor mistakes, but it probably wouldn’t be popular.
• Become educated – a lot of beginning investors get into the property market thinking they understand real estate because they’ve lived in a house - but that’s why so many investors fail. Knowing your local neighbourhood is not the same as understanding the property market or how property investment works. Learn about finance, tax, the economy, property cycles, investment principles. Get good mentors and avoid salespeople who have a vested interest.
• Be realistic in your expectations – don’t be impatient – you can’t buy 10 properties in 10 years – wealth creation is a slow process, but the magazines we read and the emails we receive make us believe that property investment is a get rich quick scheme.
• It takes up to 30 years to develop financial freedom through property.
• You can’t just buy any property – you must only buy investment grade properties. Any property can become an investment but very few are investment grade.
• Another big mistake of many would be investors is not to take action - procrastination.
With thanks to Michael Yardney's PropertyUpdate.com.au