We're all going to make mistakes – it's a part of life! You can always learn from the experience and move forward. The same applies to residential property investment in New Zealand. More and more people are seeing the value in growing their wealth through the property market, but you want to have all the facts before you jump on the investment ladder. Here are some of the most common mistakes that investors make, and how to avoid them.
Not doing your research
When the media reports surging house prices on an almost daily basis, it's easy to get carried away – but one of the biggest mistakes you can make as a property investor is not doing enough research. It's a logical process, but many investors can become totally overwhelmed with the emotional side of things. Instead, take a step back and look at the bigger picture. Examine long term data and trend cycles before signing on the dotted line. A boom suburb can be great if you're looking for a quick turnaround but, in reality, it could be at the end of its price growth cycle.
Chat with a real estate agent, explore and think about what kind of tenants you're likely to find.
Going in without a plan
Property investment can be bit like a game of chess. It's all about planning ahead and knowing your next move. Buying a home without first thinking about strategy can set you up for financial disaster. You'll need to figure out a plan and how a property can help support you in the future. It's not just about the numbers either. Your responsibilities and lifestyle will change over time, so your strategy should reflect and be adaptable to whatever crops up further down the line.
Before you start on the property hunt, make an effort to get property investment advice from an Authorised Financial Adviser, like us here at Goodlife. Our approach will fit your investment choices into the overall puzzle, helping you to select and manage a property to suit your goals.