Eight Scenarios To Avoid As A Property Investor

1.  Impulse buying, no plan!
So many people in the twenty first century have fell to the marketing strategies of large corporations. As investors, you need to set out a short term and long term plan for your investment or you will learn the hard way of investing.

Design a 5 year, 10 year and 20 year plan for your wealth creation and ensure that you write down all flaws that can occur with this detailed plan.

For example. Many people tend to plan out a fixed base payment for 25 years, but if the government decides to increase interest rates over the next 10 years (which is likely to happen) then ensure that you have a back up of this increase or decrease in payments.

2.  I can do it all myself! Today we see so many DIY series on TV and therefore every home owner believes he/ she is able to design and implement a flawless renovation. This also occurs with Finances of your investment property.

I believe if you are going to consider "doing it all yourself", I believe you will need to guide yourself around professionals who can ensure that you wont end up in financial difficultly or renovation blunders.

3. Who needs Research?
Investors who don't research are not looking for financial freedom. We know that property markets and stock markets can turn quickly towards stressful times, so PLEASE research!!!!

4. What is your end result?
What is YOUR end result, why are you putting hundreds of thousands of dollars into this property. What do you want to accomplish as an investor and what is your goal?

5. I’m going to buy a property and make thousands!
Sure, but you need to make sure you regularly check your property portfolio. Are the properties you have going to keep up with the cycles that occur over the decades.
 
6. I’m looking for a bargain!
Sure you make your money when you buy your property, but you set yourself up for property investment success by buying the right property, not a cheap property.

7. Slap of paint and the price will go through the roof!
You can’t buy a property, do minimal work and then sell it at a profit, because stamp duty, buying and selling costs and tax eat away at your profits. On the other hand, buy renovate and hold in the long term is a great investment strategy.

8. What is Risks? Bring on the profits!

Some investors don’t understand the risks associated with property investment and therefore don’t manage them correctly.
Wise investors don’t only buy properties; they buy time by having financial buffers in place to not only cover their negative gearing, but to see them through the down times like we experienced in the last few years.
Another way smart property investors protect their assets is to buy them in the correct ownership structures to legally minimise their tax and protect their assets. Most wealthy property investors own nothing in their own names, but control their assets through companies or trusts.