Investopoly 5 property investing mistakes I've seen over 20 years, and how to avoid them
One of the most interesting things I do is meet many investors every week (i.e., prospective clients). It is something that I have been doing regularly for almost 20 years, so I’ve literally spoken to thousands of investors.
It is interesting because it provides me with the opportunity to reflect on peoples past investment decisions with the benefit of hindsight. There are some common themes. People tend to make one of a handful of mistakes. I think past mistakes provide very valuable learnings.
Mistakes are predictable from the outset
I believe that all financial “mistakes” are completely avoidable. Virtually no financial mistakes (i.e., losses or underperformance) occur because of random bad luck.
They are avoidable if you follow an evidence-based approach. For example, if your share investing methodology involves buying highly speculative stocks, then you only have yourself to blame if you don’t make any money after several years, because the evidence shows that speculation has a very low probability of generating reasonable returns over the long run.
Therefore, based on my 20 years of experience, if you commit one of the mistakes below, there’s a very high probability that you’ll end up with a dud investment. Conversely, if you avoid all these mistakes, you maximise your chances of success.
I must remind readers that I am completely independent. We do not buy property on behalf of clients, so I have no vested interest in you following the below advice. I am merely sharing what I have observed over the past two decades.
(1) Buyers’ agents buying outside of their domicile State
It is becoming more common for buyers’ agents to buy property interstate for clients. For example, a Sydney-based buyers’ agent might buy property in Brisbane. In my view, this is a no-no.
One of the most important things I hope to benefit from when engaging the services of a buyers’ agent is their experience. I know that selecting the right property is part-art and part-science.
The science part incudes all the objective considerations such as past growth, location, land size, land value, zoning/restrictions and so on. The objective assessment is driven mostly by data and a lot of this data is now available for a small cost online. I probably don’t need to pay a professional to collate such data.
However, the art part of selecting a property is obsoletely critical. It requires lo
Do you have a question? Email: questions@investopoly.com.au or for a faster response, post a comment on the episode's video over on YouTube: https://www.youtube.com/@investopolypodcast/podcasts
If you're interested in working with my team and me, discover how we can work together here: https://prosolution.com.au/prospective-client/
If this episode resonated with you, please leave a rating on your favourite podcast platform.
Subscribe to my weekly blog: https://www.prosolution.com.au/stay-connected/
Buy a one of Stuart's books for ONLY $20 including delivery. Use the discount code blog: https://prosolution.com.au/books/
DOWNLOAD our 97-point financial health checklist here: https://prosolution.com.au/download-checklist/
IMPORTANT: This podcast provides general information about finance, taxes, and credit. This means that the content does not consider your specific objectives, financial situation, or needs. It is crucial for you to assess whether the information is suitable for your circumstances before taking any actions based on it. If you find yourself uncertain about the relevance or your specific needs, it is advisable to seek advice from a licensed and trustworthy professional.