In any type of investment lies inherent risk. But in property, the risks can be a little more difficult to navigate, because people often confuse problems that can be mitigated for as errors of judgment.
Prolonged vacancy rates, cashflow droughts and even tenants damaging your asset can all be acknowledged and addressed within your planning. You can confront these potential hiccups before they arise, preparing for them within a carefully considered strategy.
It’s the things you fail to do that will create stumbling blocks on your road to investment success. And for some, the following three obstacles in particular can prove to be the insurmountable downfall of a budding financial future fund.
- Failing to do anything
Paralysis by analysis is a common symptom in today’s vast world of real time information. Market data is delivered to consumers on a daily basis, so keeping up with the highs, lows and everything in between of multiple housing markets can be daunting.
Many would-be investors feel compelled to do their homework before diving in – a wise decision indeed. But when your research becomes so time consuming, you forget the end goal of actually purchasing an asset, then what’s the point of all that time spent researching in the first instance?
Knowledge can be power if you wield it wisely. When information begins to overwhelm you into a state of inertia however, your smallest insecurities will be your undoing.
- Failing to research
On the flipside of too much is too little. Indeed, getting the balance between market knowledge and market confusion just right can border on impossible in our fast paced, information driven world of technology.
But the fact is you need to understand a few basic principles that determine the long-term fortitude of most bricks and mortar assets.
Some investors, believing they know best, fail to undertake thorough analysis of a suburb’s performance over time. They don’t ask questions of local property experts and often dive in on the back of advice from Great Uncle Ned.
I’m genuinely baffled by the short degree of time many investors will spend when it comes to outlaying hundreds of thousands of dollars on a property, compared to how long they’ll take to test drive and research their next motor vehicle acquisition.
Optimal selection and structuring of your property purchase is essential to the longevity of your property portfolio. This is not the time for impulse decisions or emotional buying. It’s about head over heart and facts over frivolity. Or you risk failure.
- Failing to consult the right experts
Or getting suckered by property spruikers, is another common mistake many beginner investors make. Real estate is a highly lucrative industry for top performers; so it’s not surprising that it also attracts those looking to make a quick buck from unsuspecting and uneducated consumers.
Worse than acting on the advice of a self proclaimed property expert whose only experience of bricks and mortar has been buying their own home in the burbs, is acting on the paid advice of someone with a self-motivated agenda.
Always qualify the person you turn to for guidance, ensuring they’re professional, accredited wherever possible and unbiased in that they don’t have a product to sell. Importantly, ask questions to determine how experienced they are with property investment specifically.
If you’d like to speak with someone who knows a thing or two about the right way to invest in high performing property assets with the best possible finance structure, why not connect with the team at Trilogy Funding?
Click here now to leverage our extensive industry knowledge and networks, and get a boost up the property ladder.