Investing in property is a popular form of long-term investment and a viable option to diversify your portfolio. Although many investors have the desire of making it a business, some doubt this decision.
Property news is no longer all good and the many mixed messages in the media are leading to procrastination and lack of action as fear increases.
1. Only listen to those who truly know about property investments
Everybody has an opinion about real estate but, do they really know what they are talking about? How many properties do they own?
It is wise to listen only to people who have property investment runs on the board and have already achieved what you want to achieve, rather than to those who have never really invested and may not have the same desire as you.
2. Understand that the media’s intention is to create sensational headlines
These sensational and exaggerated headlines sell newspapers and magazines. That’s the media’s job. Furthermore, the news you see might be written by journalists that are not financial or real estate experts.
It is suggested to only read media stories written by a specialist and experienced journalists who understand the economy and property investment.
3. You don’t need to know everything before you get started
Do not expect to know everything to get started as you will learn more along the way.
It is also likely to make many mistakes but you can minimise them by getting a good team of experts around you that can give you property investment advice to invest in a property market you are not familiar with.
4. Protect yourself with risk management
It is important to have risk mitigation strategies to hold and grow your property portfolio over the long term and also bear up against the ups and downs of the property cycle. These strategies include:
- Having cash flow buffers. Make sure that you can afford to hold onto any property you buy and do not forget to account for any contingencies.
- Fixing the interest on a portion of the loan to minimise the risk of rising interest rates.
- Protecting yourself with life and income protection insurance.
- Taking out landlord insurance to cover for damage to the property or unpaid rent.
5. Understand that inaction is the biggest risk
If you do not take any action, you will never achieve financial freedom. You can choose to overcome your fears and take your financial future into your own hands.
To achieve this, you need to set yourself some goals and follow a strategy that’s known, proven and trusted. Also, listen and learn from different people. Then you grow your property investment businesses one property at a time.
Investing in property may be a good way to grow your assets. Sure, your feeling of fear is real, but it doesn’t have to be paralysing.
Sources
[1] ASIC’s Money Smart (2018), Property Investment, https://www.moneysmart.gov.au/investing/property
[2] Property Update (2018), How to overcome the biggest investment fears of many beginning property investors, https://propertyupdate.com.au/how-to-overcome-the-biggest-investment-fears-of-many-beginning-property-investors-2/
