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Top 5 Property Investment Mistakes

INVESTING  Top 5 Property Investment Mistakes

In the real estate market, everyone seems to be a guru. Property investment, cited as a sure thing has little to do with it.

The attitude towards that million rand investment has more to do with the domino effect.

 

1st time buyers, are often left with a tattered portfolio because of mistakes they made. Supply diminishes, value follows suit, and the masses who follow, do so too late, to take advantage of a buyer’s investment wonderland.urprisingly, high-end home buyers spend more time choosing a plasma screen than a house.

 

Fortunately, it’s possible to learn from other people’s mistakes.

Here are the Top 5 property investment mistakes:

Diversification

  • You’d diversify your stocks and commodities.
  • So why not your property portfolio?
  • Probably because you’ve failed to understand the meaning of diversification.
  • Green investors add an expansive range of properties and investment classes.
  • To reduce loss on investment.
  • What they should be doing is diversifying risk profiles.
  • If you’re wealthy enough to collect a clutch of properties.
  • Gather high & low risk real estate.
  • So that opposing profiles reduce risk and increase returns.

Betting on History

  • Because industrial property rental growth was strong in 2013.
  • Doesn’t mean that it will be the same this year.
  • Trend analysts can forecast one certainty in real estate: that things will change.
  • It pays to scour the data offered by trend analysts.
  • But it’s more profitable to draw up a methodical, mathematical plan, spanning the life of your investment.
  • Anything less is called ‘gambling.’

Believing in Magic

  • Experts will share tactics for buying property, without deposits and guaranteed returns, at a price.
  • The “secret trick” in question here is, exotic property investment portfolios.
  • Such as derivatives, futures and options.
  • A Yale economics thesis, labels these as high risk property investments on the market.
  • You can’t buy a R1,00,000 return with R1000 advice.

The Lone Ranger Loses Again

  • As a beginner, you should leave complex property investment deals to experts.
  • Or hire a big gun for advice, or a team of them, for that matter.
  • A team would consists of a realtor, home inspector, attorney, and insurance rep.
  • A property investment adviser cuts out sales rhetoric, and objectively manages complex facets of land selection and diversification.
  • As well as tactical design with an eye towards one goal, adding cash to his pocket and consequently yours.

Over-weighing Appreciation

  • Property is high risk in terms of returns.
  • Whether your are interested in townhouse development or security-complex houses.
  • These are all examples of freehold ownerships.
  • Which come loaded with uncertainty.
  • By making a simple change in thinking, you can turn it around.

Instead of focusing on the fact that you are investing in property, think of it as investing in cash flow.

This bread-and-butter emphasis can bring you a passive income through a security-complex home. Which you can fill regardless of your intentions to sell it for profit in the near future.

 

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