Here’s my question:
How come you don’t get told at seminars what NOT TO DO when buying a property?
Is it that obvious?
If it was then I definitely missed the memo.
Here’s a quick list of things NOT TO DO (and yes a more than a few I’ve committed as sins myself!)
1. Paying Retail when the property has no IMMEDIATE UPSIDE.
If there is no IMMEDIATE UPLIFT IN VALUE or INBUILT PROFIT then why buy the property?
Because of POTENTIAL capital gain??
Good luck I say, because you’ll need it.
2. Renting out properties yourself – especially when you have no management experience.
I learnt this the hard way, the price I paid was tragic – trashed house, trashed my confidence too.
I thought that because I could buy and house and the bank lent me money that I was superman… wrong!!!
3. Buying Problem Properties Because They’re Cheap.
I thought only Asians bought things cheap, obviously I was/am wrong.
I see it all the time – properties next to train lines, main roads, structural damage that’s not worth fixing, under flight paths, flooded properties….and the list goes on.
You can tell a hot market when the C-grade property gets snapped up when they would normally sit on the market for 3-6 months.
4. Buying Property just because everyone else is.
You know what I do when everyone else is buying???
I accumulate, and then sell some.
Yes I sell the stock I don’t want or can’t generate income from – like vacant land.
Interest rates can’t stay this low forever boys and girls so be sure to have an exit strategy.
5. Buying development sites that you “think” will make a profit.
Developing can be one of the most dangerous things around when you don’t know what you’re doing.
Even when you think you know what you’re doing you can be wrong part of the time.
Having said that what used to take me 12 months to do can now be done in 6 weeks.
Property markets change so quickly these days that 12 months is actually a long time.
Recently I heard of a developer who took 2 years to get an approval then build 4 townhouses.
He was so lucky that it has been a rising market, otherwise he’d be on the chopping block like many were in 2008/2009.
Forewarned is forearmed!
Til next time,