Don’t Go It Alone When Investing In Property!
It’s dangerous to dive in to anything without a plan and investing in property is certainly no different.
You have seen stories on TV about people who have become millionaires from investing in property. Their portfolio includes 20 properties, millions of dollars in equity, they have so much positive income flooding in and to top it off they are only 24 years old! Or a friend has recommended a book to read that gets you really excited about you own future. Its really easy to get carried away in the excitement of starting your own property empire that you jump straight in without doing your homework and hope that everything goes to plan. But what happens when it doesn’t?
With such a big financial decision it really makes sense to go out there and gather as much information as you can from as many industry professionals as possible. Hope is definitely not a strategy!
When buying a home your heart can easily overrule your head. You get caught up in all the memories you will make raising your family. It’s your sanctuary after all. When buying your investment property having your heart rule your head can get you into some serious trouble. It’s very easy to let your emotions cloud your judgement so you over capitalise rather than negotiate the best possible price for your investment goal. You don’t want to pay top dollar for a property that in 10 years time, when you want to sell is now worth less than the price you paid so you now make a loss.
You also need to ask yourself what your goals are for now and the future. When it comes to income, do you want to hold the property for the long term for capital growth or are you chasing short term yields? How best do you manage your cashflow whilst holding another property or two or three? If you want to create wealth through real estate successfully you need to know your end goal and create a plan to succeed!
Take your time! Most budding real estate moguls think they have to have it all yesterday. They say patience is a virtue and its true! Don’t ever rush into major financial decisions. You hear so many horror stories of families losing everything because they jumped right into the property market with little or no knowledge whatsoever. They didn’t think they needed to ask anyone for advice. They thought they knew it all and it wouldn’t go wrong for them, that only happens to other people. Don’t risk financial ruin, it’s really not worth it!
Our advice to you is get advice. Seek out the industry professionals that you trust to get the right advice early in the process before you decide which way to go. Get your budgets in order to see if you can afford an investment property, speak to your accountant about the best structure for house ownership and tax deduction, speak to your bank or broker for the best interest rate and loan structure, speak to investors who are active in the market and decide what is right for you. The best advice would be do not do it on your own!! Build your team of people who you trust that can point you in the right direction from the very beginning. Don’t trust your neighbour with such an important decision. Seek and learn for yourself before jumping in!
One of the worst things to discover in 5 years time is that you didn’t get the right advice from the right people and that you didn’t have the discussions with a long term view of your future. What if you had to sell your properties and start again? Selling at the wrong time can be incredibly risky. What if the property is not worth as much because the market is in a downturn? Will you be forced to sell at a loss because you didn’t do your research? Always do your research and speak with the people in the know, the professionals that you trust!
Above all else get a building inspection as it’s best to know about problems firsthand rather than cripple your cashflow at a later time!
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