Michael Quinn 13 February 2017 News
They say, “we learn from our mistakes” and we need to make sure we do. Especially with property investing, as mistakes can be very costly. Not just in the loss of money and time, mistakes can, and do, stop investors from doing anything again.
So how do we minimise our risk and avoid mistakes?
There are two main ways that you will lose your money – being greedy and not doing your homework.
Let’s look at the 5 biggest mistakes that first time investors make and most importantly, what you can learn from them.
1. Not doing their homework.
Homework keeps you safe – understanding what is driving the area, employment, growth, existing infrastructure, transport, schools, shopping centres, rental demand, finance structure, builder, the type of property that will work best for you, cash flow etc.
2. Buying “around the corner” so you can see it.
This is often driven by emotion or what the “Mob” recommends, rather than learning what may work best for you from an affordability, cash flow and ability to then duplicate, perspective.
3. Having the incorrect finance structure.
If you have the incorrect finance structure this can place your home at risk, limit you ability to borrow and limit your ability to build a portfolio.
4. Do not bring it all back to the numbers.
Knowing the numbers is so important and at the end of the day we need them to work, knowing we need finance and bank valuations to work within acceptable margins. Having the numbers reviewed by a proven “A” team is a good move.
5. Doing nothing – paralysed by fear and procrastination.
Doing nothing is not a plan that works and before you know it, your income years and opportunities are gone. Work through your fears and concerns and focus on the facts and how this may work for you.
Having a commitment to learn and understand how and why property investing may or may not work for you can be a fantastic experience and is one best taken slowly with lots of questions.