The Most Common Mistakes Investors Make

Some of the most common mistakes investors make the first one is that they tend to buy in areas that they know so often where they live this might not necessarily be the best investment strategy they put all their eggs in one basket and they might not buy the best property that they can afford in the market place but they feel comfortable doing that and more confident buying in areas that they know which is not necessarily a smart and wise investment strategy.

Secondly, they buy brand-new or off the plan often they pay premium price for this product it's basically involving developers margins and developers profits so sometimes the prices can be above market value and they like a new car they often buy a property that's overpriced and as soon as they bought it they have often got negative equity there just as you would when you buy a car and you drive it out of the driveway often that car is the appreciated value already.

Thirdly one of the biggest mistakes I see is investors say oh I'd like to live in that property one day I might want to live in that I might want to retire in it but they never usually do that but they tend to buy property with the motion rather than buy just for the investment strategy so that can be a very wrong decision to make because they often make decisions buy in the wrong areas that don't have the strongest growth and I've never wanted to live in any of my investment properties and they've all made me some very good capital growth and that's the most important thing is to make an unemotional investment decision.

The next mistake is one big one where I'd see people buy interstate because it is cheaper so if you're in the Melbourne and Sydney markets if you're buying in Perth or Brisbane or Tasmania the properties can seem really cheap and really affordable but they might really be over priced in the local markets because we're comparing them to the more expensive Melbourne and Sydney markets so we've often seen Sydney investors buying now in Melbourne and paying premium prices because they're used to Sydney prices and say you've got to be very careful to do your due diligence you you're buying into state and I'd recommend using a buyers advocate in those areas so that they can guide you make sure that you pay the right price.

The last mistake is investors don't buy owner-occupied type properties that will basically be resold to owner-occupiers so their properties like, service departments, student accommodation, studios, stratum and company share apartments, even regional properties that really don't appeal to the owner occupier market. They’re the market that will pay the premium for your property they'll pay with emotion and really pay a premium price these are the five main mistakes I see investors make when they're buying property it's very important to avoid these mistakes because these will cost you tens of thousands of dollars and will cost you the capital growth that a good investor will aim for in a property and also the great cash flow returns as well we look forward to seeing you next time for our investor tips if I can assist in your property