Where Do Many Property Investors Err?
There are innumerable (I am taking literary liberty) property investors in Australia but how many of them manage to get their portfolio past 2 properties. And if they fail, what might be the reason for their failure?
Where do the property investors miss the trick?
I think, among other things, their inability to read the trends and failure to conduct continuous portfolio reviews account for their lacklustre performance. It is sad that many investors do not have a property strategy to boot home. The story is simple: close to you there will be a few people following all the right steps-and diligently so-and in the process reaping rich rewards. In the same vein, there will be many close to you who will be spending a good part of this summer uttering invective directed at the property market. Which group you want to be in?
It is important to address your goals and your limitations first. Let us say you have enough in the kitty to survive and keep paying your mortgage dues. In such an event, you can negatively gear your properties and look for capital growth to your heart’s content. Similarly, if you do not want to pay mortgage on your properties out of your pocket, gear them positively by searching the right set of tenants and charging smart rent. This is how you address your limitations.
In the same way, goals need to be addressed, too. Where do you want to take your portfolio? Are you looking to diversify your asset base further and dive into global equities, bonds and shares or are you looking to gain access into the millionaires’ club purely through your properties?
Reviewing your portfolio from time to time is crucial. How have the properties been performing overall? Which ones have bought you capital gains? Has a particular neighbourhood managed to buck the property cycle? So on and so forth……
Investment is an art and a science; do not mistakenly assume it as pure commerce.
What mistakes have you made in the past and what have they cost you?