A quick guide to the top complaints of a property investor, so you can avoid making the same mistakes.
Like everything we do in life, when we look in the rear view mirror we can most often see the error in our ways. The way we express these lessons is usually to complain and think about what we could’ve done better, if we had our time again. While that might not benefit the person complaining, it is important that those starting out in property investment take heed of others complaints, to avoid making the same mistakes.
Here are the top 5 complaints we hear from property investors:
5. “I tried to do it by myself”
The most successful investors surround themselves with a team that are available to coach and mentor them when required. Coaching and mentoring are key elements in any success stories and will assist you in getting over obstacles along the journey to a successful investment portfolio. When left to our own council, we often make informed decision and allow the unknown or fear to prevent ourselves from moving forward.
4. “I didn’t maximise my tax”
Ensuring your accountant is maximising your tax benefits that you are entitled to in regards to your investment portfolio.
3. “I thought I was getting advice but they were just trying to sell me something”
When you are seeking advice from experts, inquire into how they are being compensated for this advice. If compensation is in the form of a commission from a future sale, then potentially the advice is self-serving in favour of the individual giving the advice. Generally balanced advice is coming from an individual that is charging a hourly fee for the advice.
If the advice being given is focused around one strategy or idea, you are potentially be sold too, in addition to the individual possibly receiving a commission on a product you purchase. Mentoring should provide you with a more holistic investment strategy and present different options rather than focus on delivering only one solution.
2. “Cash flow suddenly became an issue”
Cash reserves are a form of insurance to cover any shortfall that may present itself in times where your investment income is lower than your outgoings. Anomalies and speed humps may present themselves in the most planned investment strategies, so insuring you can fund the investment during these challenges is a key to a long term strategy.
Some challenges that may present themselves on your journey can be covered by insurance policies. Talk to a financial planner in regards to this.
1. “I chose the wrong property”
Asset selection is integral to providing a positive wealth outcome. Often first time investors buy properties in areas they believe have shown strong growth in the past. Unfortunately, if they are not well informed on future growth areas, they may be investing in an area that will provide a lower capital growth than what was projected.
Quite often in these cases investors have overpaid for their properties, or approached the investment with the wrong strategy. For example, not understanding the length of time they will need to hold the property to achieve the capital gains they seek.
Ventura iD and Multi Living Developments offer a free consultation service so you can see if developing is an option for you. Call (08) 9241 1600.