These are easy to avoid with the right investment plan.
We see these mistakes a lot as we try to help our clients fix them and get back on track.
- Buying what you love not what you need
We recently had an influx of investors needing our help to get out of investment properties they purchased during the lockdown.
As we dug a little deeper, we found out that most of these property purchases were more connected to emotional outcomes, not financial ones.
The lockdown was a great time to do research and to dream of other places to live, but these investors didn’t factor in interest rate rises and no gains in equity. The figures looked great at the get-go but didn’t stack up when it came to rental costs and returns.
Buying property where you one day want to live is a great idea – if the figures stack up.
It’s all about ensuring you have a property investment plan for your first purchase and for the next two consecutive ones. This way you can clearly see your path to building wealth and paying off your home sooner. A plan will help you achieve your goals sooner, giving you the freedom to buy the perfect house in the perfect location.
- Not having a long-term goal.
Having a long-term goal helps you stay focused on your finances now, and how best they can serve you going forward. A goal is what will set you apart from a person who buys an investment property, to someone who has created wealth from a property portfolio.
Financial freedom is a wonderful goal to have. This can be broken down into two separate goals.
- Paying your home off within a set timeframe, and
- Setting an amount for a yearly passive rental income.
You can achieve your goals by having a plan that factors in your next 10 years and how you can financially navigate them. It’s important your plan considers the highs and the lows. Two incomes now and may become one income then. It will also factor in how often you can purchase a property and how soon you can be debt free.
- Cutting out the experts
To be great at anything you need a team that can help get you there. Learning and leveraging from experts will get you to your goals faster.
We often see people trying to navigate property investment on their own believing they are getting a short-term gain.
Property investment is a long-term game, as is wealth creation and wealthy retirement.
As we mentioned early, we often get calls for help from people who purchased what looked like good buys. Only to find out they didn’t factor in unexpected costs and low returns.
More importantly, experts will be here for the long game and want to see you thrive.
Picking the right ones will also fill you with confidence and see you achieve your goals much sooner.
