4 Reasons property buyers fail to make a profit

Investing in any asset is a risk, and it can make even the steeliest of us feel uneasy especially if the cost of entry is high. Unlike shares, where you only need couple of hundred dollars to get started with a share portfolio, investing in property is a big undertaking as you need hundreds of thousands of dollars just to buy one property.

And because of this, there is so much planning and thought that goes into it, to the point that many of us feel exhausted before we’ve even committed to the purchase and signed a contract of sale!

If you go about it the right way, property ownership can be a smart and sustainable way to give yourself financial freedom and a more enjoyable lifestyle – but investments of any kind can also fail.

Here are the four key reasons why buyers may fail to succeed in the property game, and how you can avoid making the same mistakes.

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1. Failing to plan

Without proper planning in all aspects of an investment, you are almost guaranteed a failed investment.

Whether you’re investing in property for passive income or an uplift in property value, the first thing you need to do is examine your income and liabilities.

The most important thing when it comes to buying property is your ability to borrow the amount you need.

Use that as a starting point for your property investment plan so you can focus on finding properties you can afford, without putting yourself under financial pressure.

2. Being impatient

Those who rush into investing without taking the time to consider their options will fail, and quickly. Property investment can bring great success, but it doesn’t happen overnight.

Successful investing requires a smart mindset and a lot of patience, so go into your investment knowing that results will take time to achieve.

Market prices fluctuate, interest rates rise and fall, and new properties come on the market all the time.

If you are careful and precise, you’ll have a much better chance of enjoying your property investment journey.

3. Not engaging professionals

Buying a property involves a lot of money, and cutting corners in order to save couple of thousand dollars could end up costing you 10’s of thousands of dollars after your settle on the property.

Services like pre-purchase property inspectors who looks at your proposed purchase for defects or a conveyance/ solicitor who does relevant searches and discovers local council encumbrances on the land or applying for mortgage platform like loansHub, which provides personalised loan options from over 40 lenders are vital to your success.

4. Unreasonable expectations

It’s great to know what you want in your property, but if you hold out for the ‘perfect property’, you might never find it.

Investing a large sum of money into anything is nerve-wracking, so it’s no surprise that you want the end result to be perfect.

But there comes a point where you have to create a list of realistic criteria, so you can take action towards your property goals.

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This article via Your Investment Property does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.