I was talking with a fellow property investor the other day when someone else joined our conversation, the mood quickly changed as they tried to explain that real estate investing ruined their life.
I was fascinated that such a powerful wealth building tool that has made millions of individuals millionaires, could possibly ruin someone’s life.
After digging deeper to understand the reasons, I learnt they purchased an off-the-plan apartment using a so-called property professional/spruiker. The reality was they had bought in the wrong location, paid well above market value and to make matters worse, this advisor hadn’t taken into account the property cycle. It was clear this location had entered a declining market phase of the property cycle or at best it was at the peak of the market when the purchase was completed.
The investor held onto this poor cash-flow property for several years with the hope of the real estate market improving, there was an unexpected change in life circumstances and the property was sold at a substantial loss. To this day the investor hasn’t financially recovered.
It would appear this rogue advisor had used a Dartboard to identify their hotspot, although I’m willing to bet the investment decision was based purely on kickbacks from the developer.
This real-life scenario drives home such an important lesson, investors need to be represented by a fully independent & unbiased buyer’s agent that uses Smart Research.
The best method to predict a great location is to firstly understand the real estate property cycles and then review the market trends. The property clock is a tool that can be used to indicate what times and regions are currently favourable for investing in property.
My advice is don’t buy in a location just because a suburb has been reported in the media as being the next big “hot spot”, as it is too late and I’d advise you to keep researching. At Worth Property Investing we take a helicopter view and remove all emotion. We review and analyse the data to ensure your investment decision is the right decision.
Things to make sure of before buying an investment property:
- Buy at the bottom of the property cycle or as the market starts to rise;
- Look for areas where high growth is expected, close to areas that have already increased so you can benefit from the ripple effect;
- Know what plans are in place for new infrastructure or upgrading of current infrastructure;
- Low vacancy rates are critical, there’s no point buying a great property if you can’t secure a tenant;
- Rental yield.
If you want to make the right investment decision and purchase a property at the right time and in the right location, send me an email and we’ll set up a time to chat.
“We would like to take the opportunity to thank you Simon for making the purchase of our investment property such a smooth and enjoyable experience. Your honesty and professionalism and advice was much appreciated.
Your attention to detail was exceptional in looking at various matters we would not have thought of and even to the point of following up on items after settlement. We would have no problems in recommending your service to any family or friends who are looking to buy a great investment property. Thank you again.”
Peter Carbone & Renee Kruger – Picnic Point, Sydney